Russian government battle rages around wrenching more energy from coal or energy efficiency to maintain gas exports

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Publish date: March 22, 2010

Written by: Charles Digges

NEW YORK – Contrary to conventional wisdom among Russian energy leadership, Russia can meet the power needs not only of its own country but those of Europe without driving up its carbon footprint, a new study from the US-based German Marshall Fund asserts.

The report comes on the heels of an announcement by Russian President Dmitry Medvedev last week that Russia would remain committed to developing clean and green energy technologies, and called for the country’s long languishing Climate Doctrine to be implemented.

Yet at the same time, the report indicated that Russia is showing signs of growing intentions to use its enormous coal reserves at home, posing disastrous dangers to the climate. The German Marshall Fund reported that Russia could increase its reliance on coal for domestic purposes by as much as 26 percent by 2030.

The German Marshal Fund, an American non-partisan public policy and grant making group, forwards in a report a challenge to the consensus among Russian energy leadership that the country will have to turn to coal and nuclear energy for its domestic power because of Europe’s growing needs for it’s natural gas.

But even these European demands could slowly fizzle as America increased imports of shale gas begin to eclipse Russia on the export market – and threaten on of the Kremlin’s pet projects: The Shtokman oil and gas condensate field off Murmansk’s Arctic coast. Beginning dates for the project to tap the field,which is estimated to hold some 36 trillion cubic meters of oil and gas have been steadily shoved back in the face of decreasing gas demand that could easily be filled by other countries – namely the United States.  

The the German Marshall Fund paper will be presented on Friday, March 26 at the fund’s Brussels Forum. It’s findings are consistent with the 40 percent reduction in energy intensity that Medvedev pledged to reach by 2020 when at December’s UN climate talks in Copenhagen.

Instead of Russia’s insistence on coal and gas for domestic consumption, the Fund’s paper argues that by imposing large scale energy efficiency upgrades and by reducing energy intensity, Russia could both reduce the need for new coal fired plants, thus curbing the country’s rising greenhouse gas emissions,

In Copenhagen last year, Russia pledged to halt its emissions at 25 percent below 1990 level – an easy task given the industrial collapse following the fall of the Soviet Union.

Indeed Russia’s current emissions output is 34 percent below 1990 levels, but the rise in Russian emissions have seen a dramatic 18 percent spike since 1998 under the industrial build out of former president Vladimir Putin, making Russia one of the world’s currently largest greenhouse gas emitters. .

“US and EU businesses and industry have a vital role to play in technology transfer and knowledge sharing in helping Russia’s energy and power sectors to increase their cost and environmental efficiencies while concurrently sustaining economic growth,” author Kevin Rosner, a senior fellow at the Institute for the Analysis of Global Security, wrote in his contribution to the German Marshall Fund report.

Right now, Rosner warned, Russia faces the likelihood that it will deplete its natural resources to feed demand, the rationale for which he described as “short-term economic gain,” adding another warning: “The avoidance of long term costs associated with greenhouse gas emissions and climate change will follow.”

Medvedev stands behind emissions cuts

In the run-up to the Copenhagen climate summit, Russia opened its emissions cuts pledges as 15 percent, but caved to international pressure and promised a 25 percent cut by the time Medvedev arrived for the talks.

Last week, Medvedev spoke on climate change before the country’s Security Council and called for implementation of the country’s Climate Doctrine by October, the Russian Itar-Tass news agency reported.

Despite uncertainty surrounding reaching a binding global climate treaty by 2013, he told the security council, Russia is a “responsible” country that will “remain committed to our chosen strategy, namely, developing an energy-efficient economy, modern ‘green’ technology and a modern energy sector, thus reducing hydrocarbon emissions into the atmosphere,” the agency reported.

But old habits, learned during the Soviet era when energy was cheap, may not help the drive to efficiency. Russians still live in overheated apartments with no access to thermostats during the “heating period that lasts from early autumn to spring, Heat in Russia is controlled by centralized boilers and to cool things off in the winter, they simply throw open their windows.

Coal may become a larger part of Russia’s energy mix

Rosner pointed out in the report that while Russia has cultivated its reputation in oil and natural gas, its coal reserves are second only to those of the United States. While coal currently accounts for only 14 percent of its energy use and 28 percent of electricity production, the country is steadily increasing coal production. Russia also has outlined in a number of national energy strategies toward its intention to build up coal-fired power plants for domestic power as a way to free up natural gas for export, Rosner wrote.

In 2007, former President Putin said Russia will have to increase domestic electricity supply 66 percent by 2020. Later goals have called for adding 7 gigawatts of electrical production from coal by 2012 – a figure one expert cited by the German Marshall Fund report estimates will result in 30 new power plants.

“While numbers may fluctuate, the intent to make coal a larger piece of Russia’s energy mix remains constant,” Rosner wrote, all resulting in what he called “worrying consequences for climate change.”

Rosner argued that instead of looking to new power plants, Russia should focus on improving its dramatic energy inefficiencies. One World Bank report published in 2007 found Russia could save as much as 45 percent in primary energy consumption – about 340 billion kilowatt-hours of electricity – 0 if it could ramp up its energy efficiency, the German Marshall Fund report stated.

Both the United States and Europe should offer Russia assistance with new economic analyses to quantify the amount of coal-fired generating capacity that can be avoided by implementing efficiencies, the report indicated. And Europe, in particular, should work with Russia on studies and policy recommendations.

Ultimately, the report argued, Western Europe’s hunger for natural gas directly affects Russia’s domestic choices.