RusEnergy

MOSCOW. (RIA Novosti economic commentator Nina Kulikova) - Disputes between Russia and the West in the energy sector are getting worse, as the two sides are showing different approaches to energy security. Russia's G8 partners are mainly energy importers, and they view the problem as consumers, while Russia is compelled to protect its rights as a producer and supplier. All this brings about a lot of disagreement. The EU countries are expressing their doubts about the reliability of current energy supplies, and they are trying to diversify energy supply sources and delivery routes. Russia, in turn, is trying to protect its own economic interests and has unveiled plans to step up energy supplies to the Asia-Pacific region. Russian Presidential Aide Igor Shuvalov says that Russia must be certain that it will be able to sell its product. He believes that the diversification of supplies should be a two-way street open to both consumers and producers. Russia and its G8 partners are also looking at energy market liberalization from a different perspective. The West is complaining that Russia's tough laws serve as barriers to foreign investment, and is insisting that Russia should grant foreigners access to its energy sector. Karen Harbert, Assistant Secretary for Policy and International Affairs at the U.S. Department of Energy, stressed that in the U.S.'s view, the Russian energy sector is experiencing a shortage of foreign investment due to the current legislative restrictions. The Russian authorities, in turn, are reproaching their partners for their unwillingness to allow Russian companies access to their own markets. "At present we do not feel that G8 countries and companies are ready to amend their own legislation so as to enable Russian companies to make investments in the West," said Shuvalov. Another stumbling block between Russia and the European G8 members is the ratification of the Energy Charter. According to Marc Franco, head of the European Commission delegation to Moscow, the best way to ensure energy security is to ratify the Charter, which provides access to reserves and infrastructure, creates a competitive environment and raises efficiency. But Moscow insists on the need to modify the document before ratifying it, since the Energy Charter's transit protocol does not take into account Russian interests and is not suited to the current market conditions. It's small wonder that Russia and the West have different interpretations of the term 'energy security'. But according to Vladislav Surkov, Deputy Chief of the Presidential Administration, while Russia's partners view energy security as having full control over Russian pipelines and its mineral wealth, Russia has a different understanding. The Russian authorities underscore that Moscow has always respected the interests of Europe as a hydrocarbon consumer. Russian gas has been delivered to Europe for more than 40 years. As Russian President Vladimir Putin has said, despite its own political and economic turmoil in the early and mid-nineties, Russia has never allowed any disruptions in energy supplies. That is why Moscow seems to expect that its interests as an energy supplier should also be respected. So far, energy security has been understood by many as the energy independence of a country. Such an approach has intensified global competition for resources and given rise to many conflicts. Meanwhile the great number of threats to energy security, which have become global a long time ago, should have made the parties start formulating a global concept of it. Global demand for energy resources is growing at a faster rate than investment in the energy sector, primarily because of the high growth rates sustained by developing countries (China, India, and others), which are becoming more dependent on energy imports. According to the estimates of the International Energy Agency (IEA), in the next 25 years energy consumption will grow by 65%, with an annual growth rate of 1.7 %. The problem of energy poverty is also being exacerbated. According to OPEC, at present about 2 billion people do not have sufficient access to energy, and the need to combat energy poverty is becoming more pressing. In addition to this, instability in the Middle East, environmental problems, terrorism, climate changes and depletion of resources may only intensify the challenges posed by energy security. That is why the need to create a global energy system that would minimize the risks of growing threats is evident. Russia, in the framework of its G8 presidency, is advocating the position that energy security is not only the protection of the consumer against the supplier: it is the protection of mutual interests, which provides for stable cooperation between the parties. According to the Russian president, Russia wants to pool the efforts of the international community to tackle a whole range of energy issues. Among them are overcoming the imbalance between demand and supply, making general commitments in the energy sector with voluntary sharing of profits and risks, and building a global energy network to prevent conflicts. Global energy security should be based on the principles of long-term, reliable, environmentally-friendly energy supplies at reasonable and economically viable prices, according to Putin. When there are favorable political conditions and we all understand that our security requires mutual involvement in the process, we will make appropriate amendments to our laws without trying to secure national priorities. Instead, we will give each other the chance to invest in each other's economies, says Shuvalov. He adds that we should build a system where all players, both suppliers and consumers, have their own commercial interests but are also interested in their partners' success. The question of whether all these arguments are acceptable to Russia's G8 partners is still open, but there is a chance that the leaders of the world's foremost economies will at least listen to them. First, there is a growing trend towards integration in the global energy system, where Russia is objectively one of the leaders because it has one of the world's largest reserves of fuel and other energy resources. This will enable Russia to commit itself to providing global energy security. Second, the feature of Russian economic development is such that the country is balancing between the desire to pursue a great-power economic policy and the danger of turning into an underdeveloped supplier of commodities to the developed world. Though Russia has not yet become the latter, this danger is still realistic. Russia is not yet an industrially developed country, though it has all the conditions necessary to one day be one. That is why, on the one hand, Russia well understands the characteristics of a commodities-based economy and does not wish to turn into one, while, on the other hand, it can clearly see all the challenges and opportunities presented by strong economic growth and is able to come up with realistic proposals for global energy security.