Parliamentary hearings “Energy Strategy of Russia: Problems and Prospects” held in Federation Council Dec 12

13.12.2006 // Press servise of Federation Council

Russia’s energy strategy need improvement

The prospects of Russia’s energy sector and the problems of formation of legislative basis for the country’s energy strategy have been considered at the parliamentary hearing in the Federation Council. Representatives of the Ministry of Industry and Energy, RAO UES Russia, HydroOGK, Rosatom, Rosenergoatom, Gazprom and  research institutes were invited to discuss this crucial prerequisite for Russia’s economic development. They discussed the whole complex of problems of the country’s fuel and energy sector — from production and transportation of traditional energy to development and introduction of new technologies.

“The necessity to overcome the negative tendencies affecting the macro-economic indices and the economic conditions, the problems of global energy security, the growing role of the state in its cooperation with the business in developing the fuel and energy sector, the coordination of the regional energy policy with the strategic development priorities of Russia’s regions require revision of the key principles of the energy strategy, elaboration of an effective mechanism of monitoring and adjustment of energy sector indices to modern challenges,” the first vice chairman of the FC Commission on Natural Monopolies Valentin Mezhevich said, while opening the parliamentary hearings. He noted that the fuel and energy complex remains the locomotive of Russia’s social-economic development: it ensures almost 30% of GDP, over 60% of currency inflows and over half of tax revenues. “During its annual parliamentary hearings since the adoption of the Energy Strategy-2020, the FC Commission on Natural Monopolies has paid most serious attention to its implementation as it is the only long-term plan of how to develop the key component of the country’s economy — the fuel and energy sector — and the problems arising in the course of implementation,” Mezhevich said.

The participants in the parliamentary hearings pointed out that the exploration of recoverable hydrocarbon reserves is lagging increasingly behind their extraction. The Government does not effectively use the key way to ensure energy security – it does not provide enough investments to satisfy the forecast demand in the fuel and energy complex. The basic production assets are worn out, the output of main fields, especially, gas fields, is declining. The economy is growing quicker than the energy sector and continues wasting energy: as much as 30%-40% of fuel is lost during extraction, transportation, processing and consumption.

The experts are sure that the key deviations from the strategy plan are creating quite a new situation in the fuel and energy complex and the economy, as a whole. Hence, the Government should consider realities when making forecasts and developing long-term energy policies.

The experts stressed the necessity to work out a new version of the Energy Strategy, this time for a longer period – till 2030, to create a state system of long-, medium- and short-term energy planning, to speed up the formation of a legislative basis, to draw up and adopt technical regulations and to enhance the control of both Houses of the Parliament over the implementation of the Energy Strategy of Russia.