By February 2017, Italy, Malta, Portugal: “U.S. Natural Gas Exports and Re-Exports by Country,” U.S. Energy Information Administration, https://www.eia.gov/dnav/ng/ng_move_expc_s1_m.htm.
A report from Columbia University: Jason Bordoff and Trevor Hauser, “Amerian Gas to the Rescue? The Impact of US LNG Exports on European Security and Russian Foreign Policy,” Columbia SIPA Center on Global Energy Policy, September 2014, 29, http://energypolicy.columbia.edu/sites/default/files/energy/CGEP_American%20Gas%20to%20the%20Rescue%3F.pdf.
Moreover, Gazprom is not a static player: Thierry Bros, “Putting a Price on Gas or Putin’s Gas Price?” Research Centre for Energy Management (RCEN), June 2, 2014, www.rcem.eu/posts/2014/june/02/putting-a-price-on-gas-or-putin%E2%80%99s-gas-price.aspx.
In 2016, one consultancy projected: Anna Shiryaevskaya, “More than Half of U.S. LNG Is Destined for Europe, WoodMac Says,” Bloomberg, January 15, 2016, www.bloomberg.com/news/articles/2016-01-15/more-than-half-of-u-s-lng-is-destined-for-europe-woodmac-says.
Releasing another report at the same time: Kantchev, “With U.S. Gas, Europe Seeks Escape from Russia’s Energy Grip.”
In 2013, Europe was only utilizing: Guy Chazan, “Europe Seeks Alternative Gas Supplies,” Financial Times, April 26, 2014, www.ft.com/intl/cms/s/0/b943b2c4-b8ed-11e3-98c5-00144feabdc0.html#axzz3HBrbAjsU; www.ft.com/intl/cms/s/0/b943b2c4-b8ed-11e3-98c5-00144feabdc0.html#axzz3HBrbAjsU; King & Spalding, LNG in Europe: An Overview of European Import Terminals in 2015, 4, https://kslawemail.com/77/574/uploads/lng-in-europe---v5.pdf.
At the time, a third of Europe’s: In 2014, Europe’s regasification capacity was 201 bcm or 7 tcf, which was equivalent to 40 percent of Europe’s demand for gas. Ibid., 4, 10.
Asian consumers, particularly after Japan: The trajectory of European LNG imports was in fact down from 8.7 tcf a year in 2010 to 4.3 tcf a year in 2014. “Chapter 3. Natural Gas,” International Energy Outlook 2016, May 11, 2016, https://www.eia.gov/outlooks/ieo/nat_gas.cfm.
Had it, one can be sure: “Regional Price Spreads: Predicting the Future of LNG,” S&P Global Platts, August 26, 2014, http://blogs.platts.com/2014/08/26/lng-price-spreads/.http://blogs.platts.com/2014/08/26/lng-price-spreads/.
The shale boom has both directly: See Chapter Three for a fuller discussion of these developments.
In the end, Lithuania received: “Lithuania to Pay More for Norwegian LNC than Russian Gas,” Reuters, November 13, 2014, www.reuters.com/article/lithuania-lng-idUSL6N0T268X20141113.
Despite insisting publicly that maintaining: Tatiana Mitrova, “The Geopolitics of Russian Natural Gas,” Belfer Center for Science and International Affairs, Kennedy School of Government, Harvard University, February 21, 2014, 61–62, http://www.belfercenter.org/sites/default/files/files/publication/CES-pub-GeoGasRussia-022114.pdf.
Although the population of Europe: Oystein Noreng, “The Global Dimension of EU Energy Policy,” in Energy Union: Europe’s New Liberal Mercantilism? ed. Svein S. Andersen, Andreas Goldthau, and Nick Sitter (London: Palgrave, 2017), 65.
As of 2014, natural gas prices: Ibid., 69.
In allowing greater access: Thomas Raines and Shane Tomlinson, Europe’s Energy Union: Foreign Policy Implications for Energy Security, Climate, and Competitiveness (London: Chatham House) March 2016, 21, https://www.chathamhouse.org/sites/files/chathamhouse/publications/research/2016-03-31-europe-energy-union-raines-tomlinson.pdf.
Nine: Russia—More Petulant, Less Powerful
A podgy academic from Moscow: It is worth noting, however, that Gaidar’s grandfather was a Bolshevik revolutionary.
As the chief architect of Russia’s: Andrew E. Kramer, “Russia’s Market Reform Architect Dies at 53,” New York Times, December 16, 2009, http://www.nytimes.com/2009/12/17/world/europe/17gaidar.html.
Before his death, Gaidar wrote: See Yegor Gaidar, Collapse of an Empire: Lessons for Modern Russia (Washington, DC: Brookings Institution Press, 2010).
Some have suggested that economic calamity: See Nikolay Petrov, “Putin’s Downfall: The Coming Crisis of the Russian Regime,” European Council on Foreign Relations, April 19, 2016, www.ecfr.eu/publications/summary/putins_downfall_the_coming_crisis_of_the_russian_regime7006.
One expert, Dmitri Trenin: See Dmitri Trenin, “Russia Needs a Plan C,” Carnegie Moscow Center, December 15, 2015, http://carnegie.ru/commentary/2015/12/15/russia-needs-plan-c/in4j.
Other analysts see the plunge: For instance, see Matt O’Brian, “Sorry, Putin. Russia’s Economy Is Doomed,” Washington Post, December 15, 2014, https://www.washingtonpost.com/news/wonk/wp/2014/12/15/russias-economy-is-doomed-its-that-simple/.
Optimistic commentators see the period: See Daniel Treisman, “Oil and Democracy in Russia” (Working Paper 15667, The National Bureau of Economic Research, Cambridge, MA, January 2010), http://www.nber.org/papers/w15667; Anders Åslund, “What Falling Oil Prices Mean for Russia and Ukraine,” Atlantic Council, January 22, 2016, www.atlanticcouncil.org/blogs/ukrainealert/what-the-falling-oil-price-means-for-russia-and-ukraine.
Yekaterina, from the Siberian city: For a full transcript of the broadcast, see “Direct Line with Vladimir Putin,” President of Russia, April 14, 2016, http://en.special.kremlin.ru/events/president/transcripts/51716.
Over the course of the next four hours: Ibid.
The questioner responded: Ibid.
By the time of the broadcast: “Russia, Annual data and forecast,” The Economist Intelligence Unit, July 19, 2016, country.eiu.com/article.aspx?articleid=294438413&Country=Russia&topic=Economy&subtopic=Charts+and+tables&subsubtopic=Annual+data+and+forecast.
The economy had shrunk by 3.6: “GDP growth (annual %),” The World Bank, data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=RU.
Gross national income per capita: “Russian Federation,” The World Bank, 2016, http://data.worldbank.org/country/russian-federation.
The number of Russians living in poverty: Ibid.
But sanctions are estimated: See Robin Emmott, “Sanctions Impact on Russia to Be Longer Term, U.S. Says,” Reuters, January 12, 2016, www.reuters.com/article/us-ukraine-crisis-sanctions-idUSKCN0UQ1ML20160112. For more on the impact of sanctions on Russian economic growth, see “IMF Survey: Cheaper Oil And Sanctions Weigh On Russia’s Growth Outlook,” The International Monetary Fund, August 3, 2015, www.imf.org/external/pubs/ft/survey/so/2015/car080315b.htm.
Russian finance minister Anton Siluanov: Andrey Gurkov, “Sanctions Aren’t the Key Source of Russia’s Woes,” Deutsche Welle, January 30, 2015, www.dw.com/en/sanctions-arent-the-key-source-of-russias-woes/a-18225289.
he estimated that Russia loses: Olga Tanas, “Russia Sees $140 Billion Annual Loss from Oil, Sanctions,” Bloomberg, November 24, 2014, www.bloomberg.com/news/articles/2014-11-24/russia-sees-140-billion-annual-loss-from-oil-sanctions.
In 2015, the energy sector accounted: A. A. Makarov et al., ed. Global and Russian Energy Outlook 2016 (Moscow: The Energy Research Institute of the Russian Academy of Science [ERI RAS] and Analytical Center of the Government of the Russian Federation [ACRF], 2016), 172, https://www.eriras.ru/files/forecast_2016.pdf.
Energy sales and taxes provided: Russia’s export revenue and approximately half of the revenues feeding the total federal budget came from energy in 2013. The total federal budget in 2014 was $432 billion. U.S. Energy Information Administration, Annual Energy Outlook 2015: With Projections to 2040 (Washington, DC: U.S. Department of Energy, 2015), www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
Few economies outside the Gulf Cooperation Council: On average, hydrocarbon-related revenues make up 46 percent of the GDP of GCC countries and 75 percent of their total export revenues. Nicolas Parasie, “GCC Countries Still Too Reliant on Oil and Gas Revenues, S&P Says,” Wall Street Journal, June 30, 2014, http://blogs.wsj.com/middleeast/2014/06/30/gcc-countries-still-too-reliant-on-oil-and-gas-revenues-sp-says/.
According to Russian economist Tatiana Mitrova: Tatiana Mitrova, in-person conversation with author, Moscow, Russia, May 26,
2014.
In 1999, when Putin first became: Putin was appointed to be “acting president” by President Boris Yeltsin in December 1999; he was first elected to the office in March 2000. The GDP per capita data used in the text are in current US dollars. “GDP per capita, PPP (current international $),” The World Bank, 2016, http://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD; “GDP per capita (current US$),” The World Bank, 2016, http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=RU.
Without the propeller of steadily rising prices: Russian GDP growth was 0.7 percent in 2014 and 1.3 percent in 2013. “GDP Growth (Annual %),” The World Bank, 2016, http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=RU.
Had the unconventional energy revolution: An American Petroleum Institute study conducted in October 2014 in collaboration with the consultancy ICF International found “that international Brent crude oil prices would have averaged $122 to $150 per barrel in 2013 without U.S. HMSHF crude oil and condensate production increases.” HMSHF stands for horizontal multi-stage hydraulic fracturing, or fracking as it is better known. “U.S. Oil Impacts: The Impacts of Horizontal Multi-stage Hydraulic Fracturing Technologies on Historical Oil Production, International Oil Costs, and Consumer Petroleum Product Costs,” ICF International, Presentation to The American Petroleum Institute, October 30, 2014, Fairfax, VA, www.api.org/~/media/Files/Policy/Hydraulic_Fracturing/ICF-Hydraulic-Fracturing-Oil-Impacts.pdf; “Europe Brent Spot Price FOB,” U.S. Energy Information Administration, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rbrte&f=a.
Russia had several advantages: See “Russian Federation: Overview,” The World Bank, October 6, 2016, www.worldbank.org/en/country/russia/overview.
First, Russia had the ability to increase: In a 2016 interview, Putin acknowledged, “We suffer dangerous revenue losses in our export of oil and gas.” Nicolaus Blome and Kai Diekmann, “Putin—The Interview: ‘For Me, It Is Not Borders That Matter,’ ” Bild, November 1, 2016, www.bild.de/politik/ausland/wladimir-putin/russian-president-vladimir-putin-the-interview-44092656.bild.html.
Developing Russia’s own vast unconventional: By all accounts, Russia’s own unconventional oil deposits are the largest in the world, estimated by the EIA to be 75 billion barrels. See James Henderson, “Tight Oil Developments in Russia,” (WPM 52, Oxford Institute for Energy Studies, University of Oxford, U.K., October 2013), www.oxfordenergy.org/wpcms/wp-content/uploads/2013/10/WPM-52.pdf.
it would require the lifting of sanctions: Experts point out that Russia’s unconventional fields—such as the Bazhenov formation in Siberia—lack the clean “wedding cake” structure found in the American Bakken fields and elsewhere. Walter Russell Mead quoted in Patrice Hill, “Siberian Shale Find Fuels Russia’s Fracking Future,” Washington Times, February 18, 2014, www.washingtontimes.com/news/2014/feb/18/siberian-shale-find-fuels-russias-fracking-future/?page=all. In 2013, Russian energy minister Alexander Novak estimated that, even with incentives from the government for exploration and production, tight oil would eventually add only 300,000 to 400,000 barrels per day—or less than 4 percent of Russia’s overall 2013 oil production. “Russia Shuns OPEC, Plans Increased Oil Production,” Moscow Times, December 3, 2013, www.themoscowtimes.com/news/article/russia-shuns-opec-plans-increased-oil-production/490833.html.
One of the successor accounts: In 2008, this $157 billion fund was split into the Reserve Fund and the National Welfare Fund. “Economic policy: Stabilisation Fund will be split into two funds in 2008,” The Economist Intelligence Unit, September 1, 2007.
Its size dropped: The fund fell from a 2014 high of $92 billion to $16 billion in April 2017. “Sovereign wealth fund declines sharply in December,” The Economist Intelligence Unit, January 11, 2017.
Finally, and most importantly, the government: Dmitry Dokuchaev, “Why a Free-Floating Ruble Is Not in Freefall,” Russia Direct, November 18, 2015, www.russia-direct.org/analysis/why-free-floating-ruble-not-freefall.
Almost instantly, the ruble weakened: The weakened ruble also makes imported goods more expensive, having the effect of making Russians relatively “poorer.” Vladimir Kuznetsov, “Ruble Drops to Record in Worst Month in Five Years as Bonds Fail,” Bloomberg, November 28, 2014, https://www.bloomberg.com/amp/news/articles/2014-11-28/ruble-heads-for-weakest-month-in-five-years-after-oil-slump.
In January 2016, Finance Minister: Olga Tanas, Anna Andrianova, and Ryan Chilcote, “Russia on War Path Leaves Siluanov to Scrape By as Funds Ebb,” Bloomberg, January 13, 2016, https://www.bloomberg.com/news/articles/2016-01-13/russia-seeks-20-billion-budget-boost-as-siluanov-warns-on-oil.
He warned that a failure to do so: Ibid.
Putin, speaking in December 2015: James Marson and Andrey Ostroukh, “Vladimir Putin Says Russia’s Economic Crisis Has Peaked,” Wall Street Journal, December 17, 2015, https://www.wsj.com/articles/vladimir-putin-warns-government-may-adjust-budget-over-oil-price-fall-1450346139.
However, as Andrey Movchan: Andrey Movchan, in-person conversation with author, Moscow, Russia, October 21, 2016.
Such moves could buy Putin: One independent analyst sought to estimate the price of oil Russia would need to balance its economy in 2017. He found $68 to be the magic number, in contrast to $82 cited by the Russian finance minister in January 2016. See Jacob Shapiro, “Here’s Where Oil Needs to be for Russia to Break Even,” Business Insider, December 28, 2016, http://www.businessinsider.com/russia-needs-higher-oil-prices-to-break-even-2016-12.
The publication asked dozens of American: “Will the Putin Regime Crumble? Foreign Affairs’ Brain Trust Weighs In,” Foreign Affairs, April 17, 2016, https://www.foreignaffairs.com/articles/russian-federation/2016-04-17/will-putin-regime-crumble.
At the Pushkin Café: Dmitri Trenin, in-person conversation with author, Moscow, Russia, October 21, 2016.
According to Forbes magazine, the number: Kerry A. Dolan and Luisa Kroll, “Inside the 2014 Forbes Billionaires List: Facts and Figures,” Forbes, March 3, 2014, http://www.forbes.com/sites/luisakroll/2014/03/03/inside-the-2014-forbes-billionaires-list-facts-and-figures/; Katie Sola, “The 25 Countries With The Most Billionaires,” Forbes, March 09, 2016, http://www.forbes.com/sites/katiesola/2016/03/08/the-25-countries-with-the-most-billionaires/6/#1bd5e6dd461b.
Over dinner at Moscow’s: Western journalist, in-person conversation with author, Moscow, Russia, May 28, 2014.
According to David Szakonyi: David Szakonyi, “Putin Is Still Standing: The Elites That Keep the President in Power,” Foreign Affairs, July 26, 2016, https://www.foreignaffairs.com/articles/russian-federation/2016-07-26/putin-still-standing.
The execution of import substitution: Two contracts were reportedly awarded to the company of Arkady Rotenberg: one valued at $285 million to build a railway and the other, valued at $4 billion, to build a bridge to Crimea. See “Putin’s Judo Partner Awarded $285M Contract For Crimea Railway,” Moscow Times, January 16, 2017, https://themoscowtimes.com/news/putins-friend-to-construct-russo-crimean-railway-56826.
Stephen Kotkin of Princeton University: “Will the Putin Regime Crumble? Foreign Affairs’ Brain Trust Weighs In,” Foreign Affairs. Brezhnev had several strokes and heart attacks from 1974 to 1976. Although he was clinically dead after his 1976 stroke, his inner circle allegedly revived him and, for six years until his death in 1982, kept him in power although he had no cognitive ability to govern. For more details, see Stephen Kotkin, Armageddon Averted: The Soviet Collapse, 1970–2000 (Oxford: Oxford University Press, 2001), 49–50.
Spanning eleven time zones, Russia is composed: Russia has forty-six provinces, 21 republics, 9 territories, 4 autonomous districts, an autonomous province, and 2 federal cities. The Republic of Crimea and the federal city of Sevastopol are still internationally recognized as part of Ukraine.
A very important source of budget revenues: Thomas F. Remington, “Here’s how Alexander Hamilton would understand Russia’s regional debt crisis,” Washington Post, March 24, 2016, https://www.washingtonpost
.com/news/monkey-cage/wp/2016/03/24/heres-how-alexander-hamilton-would-understand-russias-regional-debt-crisis/.
Now, with less largesse to distribute: Moscow is aware of the challenge and debating measures to help deeply indebted federal entities. See Olga Tanas, “Time Expiring for Russian Regions to Fix Budgets, Fitch Says,” Bloomberg, April 28, 2016, http://www.bloomberg.com/news/articles/2016-04-28/fitch-ticks-off-the-time-for-russian-regions-to-find-budget-fix.
These limitations could result: Ariel Cohen, “A Threat to the West: The Rise of Islamist Insurgency in the Northern Caucasus and Russia’s Inadequate Response,” The Heritage Foundation, March 26, 2012, www.heritage.org/research/reports/2012/03/a-threat-to-the-west-the-rise-of-islamist-insurgency-in-the-northern-caucasus.
A sampling of Russian experts: Holly Ellyatt, “Why Russia Must Reform its Energy Sector,” CNBC, June 21, 2013, http://www.cnbc.com/id/100834136.
In the final months of that year: Novatek was given permission to export LNG from its Yamal project to Asia. “Russia: Putin Approves LNG Exports for Novatek and Rosneft,” LNG World News, December 3, 2013, https://www.lngworldnews.com/russia-putin-approves-lng-exports-for-novatek-and-rosneft/.
On a sweltering Moscow day: Advisor to the Russian government, in-person conversation with author, Moscow, Russia, May 28, 2014.
Reportedly, previous ministers submitted plans: Kathrin Hille, “Kudrin’s Resurrection Fails to Damp Doubts on Russian Reforms,” Financial Times, May 8, 2016, https://next.ft.com/content/7f30cba8-13ae-11e6-91da-096d89bd2173.
“The proposals Kudrin has advocated”: Ibid.
In the Moscow Times, Rogov wrote: Kirill Rogov, “Putin’s Economist: Why Kudrin Tapped to Write New Reforms Plan,” Moscow Times, April 20, 2016, https://themoscowtimes.com/articles/putins-economist-why-kudrin-tapped-to-write-new-reforms-plan-op-ed-52621.
Similarly, at the end of 2004: For perceptions of a slowing economy at the end of 2004, see Gérard Roland, “The Russian Economy in the Year 2005,” University of Berkeley, 2006, 3–6, http://eml.berkeley.edu/~groland/pubs/The_Russian_Economy_in_the_Year_2005.pdf.
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