Putin to play energy card at G8 talks
In Vladimir Putin's Russia there is no divide between business and politics, and when he hosts G8 leaders for their annual summit this week he will be playing two roles: President of Russia and chief executive of Russia Inc.
Douglas Busvine, Monday, July 10, 2006
In his quest to rebuild a strong Russia out of the ruins of the Soviet Union, Putin has developed his own brand of Kremlin capitalism, defined by state control over oil and gas and the use of energy to project power, analysts say.
January's gas crisis, in which Russian gas monopoly Gazprom cut exports to Ukraine, shocked Europeans who suffered the first disruptions to supplies of Siberian gas in 40 years.
The gas pricing row hit perceptions in the West in a way not seen since the Chernobyl nuclear disaster of 1986, says Alexander Rahr, a German foreign policy expert who argues the Kremlin is still learning how to use Russia's energy clout.
"In its childhood years Russia was economically and financially dependent on the West," said Rahr, a biographer of Putin. "Today, the 15-year-old post- Soviet Russia is flexing its muscles and trying to reverse that relationship of dependency."
Russia has stage-managed the summit buildup to demonstrate its new economic prowess: eight years after its humiliating currency devaluation and debt default, Moscow has agreed to repay all the foreign debts it assumed from the Soviet Union.
It has abolished capital controls in its quest to turn the rouble into a first- rate convertible currency. And, on the eve of the July 15-17 summit, it will float state oil firm Rosneft, seeking to raise over US$11 billion (HK$85.8 billion) in Russia's largest-ever stock market listing.
With Gazprom and Rosneft, Putin will be able to boast two world-class energy companies. But, say experts, parlaying their status as oil and gas majors into global influence will be hard.
"Russia does appear to want to use energy to project power. The problem is that energy itself cannot easily be used directly as an instrument of power," said Clifford Gaddy, a Russia expert at the Brookings Institution in Washington.
"The energy instrument must necessarily be backed up by hard power - military force or the threat of force. In fact, oil and gas work better as instruments of soft power," argues Gaddy, who has researched the evolution of Putin's economic credo.
Critics lambaste the Kremlin for stripping assets out of oil major Yukos, and jailing its politically ambitious owner Mikhail Khodorkovsky, to build Rosneft into the world's 11th-largest oil company by reserves.
Andrei Illarionov, a former Putin adviser and now a fierce critic, has denounced the Rosneft privatization as "a crime against the Russian people."
He said the deal, masterminded by Kremlin insiders, should be revoked by a future government.
Although Putin has put energy security at the top of his summit agenda, analysts see little chance of progress after US Vice President Dick Cheney accused Moscow in May of using energy to intimidate and blackmail its neighbors.
Europe has taken a twin-track approach of seeking energy alternatives while trying to bind Russia into the International Energy Charter - a rulebook which requires open access to pipelines and energy fields.
Russia, meanwhile, considers its energy interests to be best served by what it calls "security of demand."
Gazprom is pushing for greater access to European markets by acquiring distribution assets in Germany, Britain and Italy.
The Kremlin robustly defends its position, seeing no reason why Russia should surrender control of its energy resources and infrastructure at the behest of the West.
"I have the impression that if cannibals came to power in Moscow and gave away something, these cannibals would be regarded as terribly democratic," said Vladislav Surkov, the Kremlin's top political strategist.
Despite the slim prospects for an understanding, sky-high oil prices will keep energy on the front burner going into next year's German G8 presidency.
G8 leaders might want to take a few tips from the oil industry on how best to build a successful relationship with Russia: Go easy on the rhetoric, stay engaged and fulfill your promises.
http://www.thestandard.com.hk/news_detail.asp?pp_cat=17&art_id=22510&sid=8775008&con_type=1
By Daniel Ten Kate, 10 July 2006
The government has pushed Thailand as the hub of just about everything, but references to the country’s potential as an ‘energy hub’ had vanished until recently.
Fresh from meetings with the leaders of energy-rich states Russia and Kazakhstan at a summit a few weeks ago, Prime Minister Thaksin Shinawatra has again revived the phrase. Nine days ago, Thaksin used his first weekly radio address since February to tell the public that Russian President Vladimir Putin wants to make Thailand an energy hub, and that the Energy Ministry and state-owned energy giant PTT have been instructed to draw up a plan on how to make it happen.
“We have to hurry in doing this because if we become an energy hub, we can purchase energy at prices cheaper than others and make profits that can be returned to the state coffers,” Thaksin said.
The energy hub concept first took hold a few years ago, when Thaksin’s economic advisers were planning to make Thailand the hub of everything from furniture and fashion to village-based products and oil palm research and development.
The energy hub plan had two key elements: the Strategic Energy Land Bridge, which would allow oil to be shipped from Phang Nga province on the Andaman Sea to Nakhon Si Thammarat province on the Gulf of Thailand, providing an alternative to the crowded Malacca Straits; and the free trade zone at Sri Racha in Chonburi, which was envisaged as an oil trading center that would rival Singapore.
Three years and a political crisis later, however, both initiatives have gone nowhere. The lack of progress has many analysts laughing off the idea that Thailand can challenge Singapore anytime soon as a regional energy hub, although government officials still say it’s a possibility – down the road, of course.
“I don’t think we can compete directly with Singapore, but rather we can complement the market in Singapore,” said an official at the Energy Ministry, speaking on condition of anonymity. “But we are behind schedule with our plans and need to be proactive.”
Of the two initial plans, the land bridge idea is pretty much dead. Feasibility studies conducted so far have not been promising.
“We found that we would need to make the Phang Nga pier in the original design three to five times longer,” the ministry official said. “And even then it doesn’t make any economic sense yet.”
As for Sri Racha, the government has yet to implement a series of tax incentives and investment legislation designed to lure traders into the region. “Not many” traders have expressed interest, the official said, and analysts say that businesses have no reason to abandon Singapore.
“Singapore blows Thailand away with low taxes, a trading mentality, a relative lack of government meddling in the energy industry and the absence of a sole company that dominates the market, like PTT,” said an energy analyst at an international investment bank, speaking on condition of anonymity. “Thailand is not in a strategic position,” he added.
In the long run, however, Russia and its state-run companies may want to enter the Thai market, and create more trading options in Southeast Asia. Although Thailand currently lacks the key ingredients to become an energy hub, including buyers, sellers, and business-friendly laws, Russia can help provide Thailand with the most important element: infrastructure.
“We need a massive investment in infrastructure, especially storage facilities,” said a senior executive at PTT, speaking on condition on anonymity. “Otherwise people will still prefer Singapore. But the Russians would be most welcome to come and build the infrastructure.”
Thaksin has attempted to forge a relationship with Putin, having met him at least three times in the past year.
While some of the talk between the two leaders has surrounded the potential purchase of SU-30 fighter jets, Thaksin has also tried to win favor with Moscow in an effort to secure a future supply of oil and liquefied natural gas (LNG).
PTT announced on Friday that it plans to build a US$540-million LNG receiving terminal in Rayong province. The investment came almost immediately after it secured a deal with Iran to import three million tonnes of LNG starting in 2011.
The terminal’s capacity will start at five million tonnes, with the potential to bump up to 10 million in the future. The search for new sources of LNG may give government officials an opening to push the development of Sri Racha as well.
Most of PTT’s overseas activity is now conducted through its exploration arm in countries like Myanmar, Iran, Oman and Algeria. But as competition for ever-dwindling energy resources becomes more fierce, the government is hoping that Central Asian energy powerhouses will not only supply the country’s energy needs, but also help it become a viable ‘energy hub.’ “We are working at high levels in an effort to do business with Russia and Kazakhstan,” the Energy Ministry official said. “Nothing concrete has been agreed upon yet, but we do believe Central Asia will play a significant role in our oil and gas plans in the future.”
http://www.manager.co.th/IHT/ViewNews.aspx?NewsID=9490000088378
AUCKLAND CITY COUNCIL, MEDIA RELEASE , 10 July 2006
The state of our changing environment
Auckland City will launch its latest Our Changing Environment 2004 to 2005 report this August.
The report is the City’s fourth comprehensive assessment of Auckland city’s state of environment and is an indispensable document in the fight to improve the environmental health of our city.
Councillor Christine Caughey, chairperson of the Environment, Heritage and Urban Form Committee, says the report provides Auckland with factual, timely and accessible information about the condition of and prospects for aspects of the environment.
“The Our Changing Environment report is a key document in the delivery of strong environmental policy and acknowledges the important steps that council, industry and residents have taken during the past three years to address the environmental pressures which the 2002 report identified," says Ms Caughey. "It also identifies the major challenges that lie ahead for Auckland city."
These challenges include global warming, air quality, energy efficiency, climate change, hazardous substances, contaminated land, noise, urban growth and waste. With this information, Auckland City can acknowledge areas of concern and identify where targets must be set for future work.
“Global warming is one of the key issues that make this report so important. The international scientific community is focusing on environment and air quality, and the input of human activity on its degradation.
“Auckland City is similarly working on identifying areas of concern and where targets must be set for future work,” Ms Caughey said. “Monitoring is one way we can better understand these issues and ensure that our actions are heading in the right direction.
“For council, the information gathered is essential in assessing how well we are meeting our targets for sustainable management, whether our policies are appropriate and effective or whether change is needed.”
ADVERTISEMENT
The report confirms that Auckland City has been most effective in tackling environmental problems particularly in heritage protection, and implementation of energy efficient initiatives.
“Despite improvements in these areas there is no room for complacency. New targets and monitoring of areas of concern must be set,” says Ms Caughey.
While some results show noticeable improvement, others provide cause for concern.
The volumes of waste being sent to landfill continues to increase, moving further from the target of zero waste to landfills by 2020. In spite of a growing use of public transport, health-based guideline levels of nitrogen dioxide were exceeded 26 times in the year to December 2005 in comparison with nine times in 2003.
Ms Caughey said that over the coming months, actions to contribute to the resolution of these and other issues will be identified and implemented.
“Though this may prove to be a difficult task, in order to ensure we continue to move towards achieving our vision for Auckland city as the First City of the Pacific we need to continue to strive to reduce our impacts on the environment," says Ms Caughey.
The state of the environment report will be forwarded to the Mayoral Task Force on Sustainability for assessment and further identification of key areas of focus for Auckland City policy and action.
The council is legally required to provide information about the city’s environmental status every five years and publishes summary updates to track progress in the interim years.
The report covers:
- the key pressures on environmental quality
- the city's current environmental state and trends
- what council is doing to manage these pressures.
http://www.scoop.co.nz/stories/AK0607/S00088.htm
Share with your friends: | 
