■"A New OPEC in the Pipeline?" op-ed by Artem Agoulnik, Washington Post, 20 October 2004, p. A27.
Good think-ahead piece on a phenom I've been tracking for years with interest, but not much fear, despite my past life as a Soviet expert: the rising influence of Russia in natural gas markets around the world but especially along its vast borders (I mean, the only places Russia does not border is Africa and Latin America, otherwise it's everywhere!).
Natural gas is "the fastest-growing source of primary energy, with global consumption projected to rise by over 2 percent annually through 2025" (and that's probably low given the much-desired switchover from coal to gas to generate electricity and the reality that—at first at least—most of the hydrogen we tap for the embryonic hydrogen economy will start from natural gas). US use alone is projected to rise almost 40% by 2025.
The piece is a bit alarmist: I'm not sure we need to hear that the "Kremlin has emerged, virtually unchallenged, as the dominant global player in natural gas," for example. I mean, geez, Russia actually has the world's biggest supply, so what exactly are we supposed to challenge about that? So Russia sees a good thing in the making and is doing it's damnedest to set up all sorts of pipelines in every direction possible. What exactly is so bad about that. As I have written before in US Government pubs: "good pipelines make good neighbors." Agoulnik may imagine one-sided dominance, but I see mutually-assured dependence.
Can you believe Russia is now trying to organize the world's biggest producers of natural gas so they can sell at the "highest price possible"? Imagine that! We tell them to become capitalists and they start acting like they should charge us the highest price possible for stuff they have and we want to buy more of over time?
Russia really is in the Core: it's well-educated, wonderfully secular in its government, can police it's own territory without outside help, and seems well on the path of rotating its leadership regularly. Is it close to a one-party state? Yes. Is the police and government role in political life too much? For my tastes, yes. But how much change do you expect in 15 years after seven decades of communism following centuries of absolutist monarchies?
I would trade Russia's gap OPEC for Saudi Arabia's oil OPEC any day. Yes, the Sovs did fund terrorism for many years, but they are out of that business now (a key criteria for joining the Core). The House of Saud, meanwhile . . ..
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