attempted to diversify its energy customer base by expanding into China through the Power of Siberia 130 gas pipeline and double down on its existing market share in Europe by constructing the Nord Stream 2 and TurkStream natural gas pipelines . 31 The war in Ukraine however saw Germany pull the plug on the Nord Stream 2 pipeline . Currently , the pipeline seems to be suspended with no change in sight .
Opportunities for Russia stemming from climate change However , it is not all doom and gloom . Melting permafrost in the Arctic is as much an opportunity for Moscow as it is a potential catastrophe . Climate change opens up new shipping routes and – in theory - enables access to vast , but costly32 , Arctic oil and gas resources . The Russian government acknowledges the need to “ move fast to get most of these reserves in the Arctic ” 33 as large hydrocarbon consumers ( EU , China , Japan ) are aligning themselves on carbon neutrality goals . However , whether Russia can do so will greatly depend on whether its international isolation over its invasion of Ukraine will come to an end at some point . The opening of the Northern Sea Route ( NSR ) from Asia to Europe offers potential for maritime trade and for accessing vast reserves of oil , gas and minerals . However , that does presuppose that there is demand for these resources and that potential buyers do not risk getting entangled in sanctions should they decide to purchase Russian energy supplies . For the moment , Russia ’ s hopes to increase shipping via Arctic waters from 32 million metric tons in 2020 to 80 million metric tons of cargo by 2024 look more like a pipedream . 34 The Kremlin ’ s desire to see the NSR shift traffic away from the Malacca Strait and Suez Canal in Egypt is unrealistic at best given that Russia ’ s war against Ukraine has in fact strengthened the role of suppliers other than Russia . That said , the NSR is a long term project and it is not estimated to be open year round before 2050 .
Russia is committed to preserving its energy “ supremacy ” Hitherto , Russia ’ s role as a major energy supplier and owner of critical energy infrastructure has served as a shield against any external political and economic pressure . 35 That status now looks to be in serious jeopardy . Russia ’ s aim was to try and preserve its energy “ supremacy ” and “ lock in ” customers before climate change mitigation puts its economic and political interests at risk . This necessitated a capitalisation on large-scale energy projects in both Europe and Asia . This explains Moscow ’ s emphasis on projects such as Nord Stream 2 , Turk Stream 2 and the Power of Siberia 2 , as these all were to provide long term economic and political security to Russia ’ s hydrocarbon dominated economy . Russia ’ s geopolitical power play over Ukraine however has thrown a spanner in the works . Nord Stream 2 is on hold , Europe looks to other suppliers and sanctions hinder Moscow ’ s ability to ship its oil to other markets around the world . Meanwhile , alternative suppliers have seen their roles strengthened . This situation is unlikely to go improve in the short to medium term , unless Russia gives up on its war aims visà-vis Ukraine . Doing so would however only solve Russia ’ s shortto-medium term challenge . In the long term however , Russia faces a greater problem . Decarbonisation policies among key-consumer nations look set to continue and will only enable greater economic , political and environmental resilience and independence from Russian energy . Russia ’ s plans at further developing its Arctic natural resources therefore may end up being little more than just that . LC
VI . - The oil spill in Norilsk is the largest ever recorded in the polar Arctic . On 29 May 2020 , 20.000 tons of diesel leaked into the water and soil from a storage tank owned by Norilsk Nickel near Norilsk , turning the Ambarnaya River red . The company was fined $ 2.1bn in damages .
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REFERENCES : 2 . The EU ’ s 6th economic sanctions package against Russia includes a ban on all imports of Russian seaborne oil . Although , pipeline imports are exempted , Poland and Germany have indicated they voluntarily will decrease Russian oil imports via pipeline . This measure will affect approximately 90 % of all Russian oil exports to the EU according to the European Commission by end of 2022 ; June 2022 . 3 . Based on 2019 data . The top five is comprised of China , the US , India , Russia and Japan . The EU occupies third place when taken as a whole . https :// www . themoscowtimes . com / 2020 / 03 / 04 / is-russiafinally-waking-up-to-climate-change-a69517 . 4 . According to the Carbon Majors Report , Gazprom was the third biggest emitter of industrial greenhouse gases over the period stretching from 1988 to 2015 . Gazprom came in third place , just after Saudi Aramco and Chinese coal . See Griffin , Paul , “ The Carbon Majors Database . CDP Carbon Majors Report 2017 ”, Carbon-Majors-Report-2017 . pdf ( rackcdn . com ). 5 . Указ Президента Российской Федерации от 04.11.2020 № 666 " О сокращении выбросов парниковых газов ", http :// publication . pravo . gov . ru / Document / View / 0001202011040008 . 6 . Nationally Determined Contribution of the Russian Federation , of 25 November 2020 . 7 . Relative to 1990 levels . 8 . ‘ Russia formally submits NDC update to UNFCCC , Climate Tracker ’. 9 . The Bank of Finland expects Russian economy 10 % decline in 2022 . See BOFIT Russia Team , ( 2022 ), ‘ BOFIT Forecast for Russia 2022-2023 . at : https :// helda . helsinki . fi / bof / bitstream / handle / 123456789 / 18342 / brf0122 . pdf ? sequence = 1 & isAllowed = y . 10 . Mitrova , Tatiana and Yermakov , Vitaly , ( 2019 ), “ Russia ’ s Energy Strategy-2035 Struggling to Remain Relevant ”, IFRI , p . 16 , Russia ’ s Energy Strategy-2035 : Struggling to Remain Relevant ( ifri . org ). According to the World Resources Institute , although hydropower is expected to grow 28 % until 2050 , it will still only account for 16 % of Russia ’ s total electricity mix in 2030 and 18 % in 2050 . Other forms of renewable energy will account for only 1.9 % of the electricity mix in 2030 and 4.4 % in 2050 . 11 . ‘ US decision to quit Paris climate agreement regrettable , says Russian diplomat ’, 8 Nov . 2019 , TASS . 12 . Russia was the largest oil supplier to China in 2018 , 16 % of China ’ s annual oil demand worth c . $ 40 bn . Statistica ; 2020 . https :// www . worldstopexports . com / top-15-crude-oil-suppliers-to-china /. 13 . “ Russia does not have a plan to ( move ) away from fossil fuels ”; World Oil ; Feb . 22 . https :// www . worldoil . com / news / 2021 / 2 / 9 / net-zero-regulation-russia-will-replace-all-the-us-oil-biden-wants-to-ban . 14 . The European Green Deal provides an action plan to boost efficient use of resources by moving to a clean , circular economy and cut pollution . The plan outlines investments needed and financing tools available . The EU aims to be climate neutral in 2050 . 15 . Chinese President Xi Jinping announced in Sept . 2020 China ’ s objective be carbon neutral by 2060 . 16 . EU leaders ’ Summit in Versailles , Paris ; April 2022 . 17 . Investopedia ; 2021 . https :// www . investopedia . com / ask / answers / 030315 / how-does-price-oilaffect-russias-economy . asp 18 . Interfax ; Federal Customs Service ; January 2021 . https :// www . aa . com . tr / en / energy / finance / russiasgas-revenue-down-418-between-jan-nov-2020 / 31628 . 19 . May 2020 ; The Diplomat . https :// thediplomat . com / 2020 / 05 / covid-19-a-reckoning-for-russiasasian-energy-aims /. 20 . OilPrice ; February 2021 . https :// oilprice . com / Energy / Crude-Oil / Russian-Oil-Giant-Rosneft-Sees- Profits-Slide-79-In-2020 . html . 21 . Per barrel of oil or per cubic metre of natural gas . 22 . Unless companies to do this covertly . As a rule of thumb , the only countries whose enterprises may be willing to take this risk are those already heavily sanctioned . Iran and N . Korea are known for shipping oil with ships who switch their Automatic Identification System ( AIS ) off to avoid detection . 23 . The European Green Deal is a set of EU policies in Dec . 2019 for climate neutrality by 2050 . 24 . Japan and S . Korea announced in Nov . 2020 its objective to achieve a carbon neutrality by 2050 . 25 . Based on estimates of KPMG consultants . Moscow Times ; July 2020 . https :// www . themoscowtimes . com / 2020 / 07 / 07 / eu-carbon-tax-could-cost-russia-33bln-euro-a70812 . 26 . Bloomberg ; October 2019 . https :// www . bloomberg . com / news / articles / 2019-10-18 / russia-sthawing-permafrost-may-cost-economy-2-3-billion-a-year . 27 . S & P Global ; September 2020 . “ The Arctic has become 2.7 degrees warmer from 1971 to 2017 ", chair of Arctic Monitoring and Assessment . https :// www . spglobal . com / marketintelligence / en / news-insights / latest-news-headlines / rising-temperatures-leave-russia-s-arctic-ambitions-on-thin-ice-59646990 . 28 . The oil spill in Norilsk is the largest ever recorded in the polar Arctic . On 29 May 2020 , 20.000 tons of diesel leaked into the water and soil from a storage tank owned by Norilsk Nickel near Norilsk , turning the Ambarnaya River red . The company was fined $ 2.1bn in damages . 29 . The OPEC + format gathers 24 oil-producing economies , 14 members of OPEC and 10 other non- OPEC countries including Russia . It aims , since 2017 , to coordinate oil production to stabilise prices . 30 . The Power of Siberia 1 gas pipeline , completed in December 2019 , has a capacity to export 38 billion cubic meters ( bcm ) of Russian gas to China annually . The pipeline spans some 2,200 km from the Chayandinskoye field ( Yakutia ) to Blagoveshchensk ( Chinese border ). 31 . Gazprom ’ s TurkStream gas pipeline was inaugurated in Jan . 2020 . It includes a 930 km long offshore pipeline under the Black Sea from Russia to Turkey with a capacity of 31 bcm for the Turkish market and Eastern European markets via Bulgaria ; Nord Stream 2 is a gas pipeline from Russia to Germany across the Baltic Sea . ( 1 / 4 of Russia ’ s present gas export to the EU ). 32 . Arctic oil production needs a breakeven oil price of $ 100- $ 110 per barrel ; OilPrice ; November 2020 . https :// oilprice . com / Energy / Energy-General / Russias-Relentless-Quest-For-Arctic-Oil . html . 33 . Reuters ; February 2021 . Pavel Zavalny , head of the energy committee in Russia ' s Duma , told Reuters . https :// www . reuters . com / article / russia-gas-lng-idINL8N2KV4SP . 34 . Bloomberg ; March 2021 . https :// www . washingtonpost . com / gdpr-consent /? next _ url = https % 3a % 2f % 2fwww . washingtonpost . com % 2fworld % 2frussia-suez-touts-arctic-sea-route % 2f2021 % 2f03 % 2f29 % 2f576f6794-9097-11eb-aadc-af78701a30ca _ story . html ; EU Council , ( 2020 ), “ Russia : Council renews economic sanctions over Ukrainian crisis for six more months ”, Council renews sanctions over Ukrainian crisis for six more months - Consilium ( europa . eu ). 35 . The EU avoided direct sanctioning Russia ’ s oil and gas , instead denying “ financing and tech that can be used in the Russian energy sector ”. Bloomberg ; Feb . 2021 . https :// www . bloomberg . com / news / articles / 2021-02-12 / russia-warns-eu-it-s-ready-to-break-off-relations-oversanctions ; EU Council , ( 2020 ), “ Russia : Council renews economic sanctions over Ukrainian crisis for six more months ”, Russia : Council renews economic sanctions over Ukrainian crisis for six more months - Consilium ( europa . eu ).
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VII . - The OPEC + format gathers 24 oil-producing economies , 14 members of OPEC and 10 other non- OPEC countries , including Russia . It aims , since 2017 , to coordinate oil production in a bid to stabilise prices in a low priced challenging environment .