Russia: Moscow Uses Energy, G8 To Restake Claim As World Power

High energy prices seem set to keep Vladimir Putin smiling (AFP) Finance ministers from the Group of Eight (G8) leading industrialized countries met this weekend in Moscow, with energy security at the top of the agenda. Russian Finance Minister Aleksei Kudrin said on 11 February that the G8 has made a good start on safeguarding world energy supplies. Meanwhile, correspondents say Russia is using its position as a major energy exporter to restake its claim to world-power status.

PRAGUE, 12 February 2006 (RFE/RL) -- Russia has marked the start of its chairmanship of the G8 with increasing self-confidence.

Russian Finance Minister Kudrin said this weekend's meeting of G8 finance ministers was a good start toward achieving a goal of global energy security. "I think we have set the right course toward resolving the range of questions increasingly being described as 'energy security,'" he said.

Responding to calls to free up trade in natural gas -- Russia supplies a quarter of Europe's gas needs by pipeline -- Kudrin said Russia hoped to boost supplies of more easily traded liquefied natural gas (LNG).

"Taking into account the possibility of not only piping gas but also LNG, then here with joint efforts, efforts which can be turned into a concrete plan of action, we could considerably widen the scope of that market and make it global," he said.

Energy exports helped the Russian economy grow by more than 6 percent last year. Many say Russia's dominant energy position has emboldened President Vladimir Putin to take a more aggressive stance on how the Russian economy and politics are run.

The Kremlin has also taken a more confrontational attitude toward nongovernmental organizations, and has imposed stricter policies with respect to neighboring pro-Western countries, such as Ukraine and Georgia.

With oil at more than $60 a barrel, Putin appears much more confident about Russia's place than leaders were a decade ago.

"And finally there is the topic of providing stability and sustainability in the international energy market," Putin said on 11 February. "Finally, I'd like to say that our bilateral relations are developing quite actively, and annually we are witnessing 50 percent growth in our trade."

Such confidence is visible in Russia's growing international role. Russia is mediating in the standoff over Iran's nuclear plans and appears poised to be taking a central position in helping to resolve the Palestinian-Israeli conflict. Putin caught the West by surprise this week by announcing he would invite the Palestinian radical group Hamas to visit Moscow for talks.

Kudrin pointed out that Russia's role as an energy supplier and an influential power is not likely to fade out soon. He said he was confident that for the next 30 to 50 years the key gas fields will be in demand.

Russia's Gas Strategy

RUNNING HOT AND COLD The crisis over Russian supplies of natural gas to Ukraine that erupted on New Year's Day has implications that spread well beyond these two countries and will impact both economic and political policymaking throughout Europe. On January 19, RFE/RL's Washington, D.C., office hosted a briefing the examined the ramifications of the natural-gas conflict.

CLIFFORD GADDY, a senior fellow at the Brookings Institution, outlined Russia's "grand energy strategy," in which Ukraine is perceived as merely an obstacle frustrating Russia's energy ambitions in Western Europe and therefore a nonentity in Russia's broader strategic planning. According to Gaddy, Russia's strategic goal regarding energy is to maximize the role of its own energy resources in the world energy markets, so as to increase its geopolitical influence. To do this, it must reduce competition and maximize dependency on its own energy resources, as well as ensure a stable supply.

TARAS KUZIO, a visiting assistant professor at George Washington University, rebutted Gaddy's argument, claiming that Russia's actions evidenced a complete lack of geopolitical strategy and resulted in strong denunciations by Western countries and a loss of political allies in Ukraine. According to Kuzio, Russian President Vladimir Putin's desire to have a deal signed by the January 4 European Union energy summit outweighed his hope of reinforcing opposition to Ukrainian President Viktor Yushchenko during the run-up to Ukraine's March 26 parliamentary elections.

RFE/RL Coordinator of Corruption Studies ROMAN KUPCHINSKY did not fully agree with Kuzio's assessments of Yushchenko or Ukraine. He outlined three major problems that are feeding the conflict between Russia and Ukraine. The biggest, he argues, is that the state-controlled Russian gas giant Gazprom holds a monopoly on natural-gas sales outside the CIS. Kupchinsky also decried Ukraine's consumption of natural gas, terming it "out of control." Corruption is also a major factor in the conflict, Kupchinsky said, although the extent to which it taints the deal struck between Russia and Ukraine remains unknown.