Alternative Energy

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Wednesday, December 20, 2006

The latest issue of the Economist has Vladimir Putin's face on the cover, with a cartoon body in a gangster outfit, holding a gas pump like a gun. The cover reads, "Don't mess with Russia." The article describes Mr. Putin's "use of energy as a weapon." According to the article, Mr. Putin believes that if he holds the control on Russian oil and gas, he can restore Russia to some of its former glory. Yet, the authoritarian approach demonstrated by Mr. Putin is backfiring already in many ways. As the article notes, Russia needs wealthier nations to help it develop its oil and gas industry and scaring other nations away in effect means less wealth for the Russian people from these resources. Some of the bullying pertains to Russia cutting off gas supplies to the Ukraine (which has a new pro-Western government). In addition, Russia scared off Royal Dutch Shell and its Japanese investors from a project to obtain oil and gas from Russia's Sakhalin Islans; Shell, Mitsui and Mitsubishi sold their interests to Gazprom, Russia's state-owned gas company. Meanwhile, when Lithuania sold an oil refinery to a Polish firm rather than a Russian one, "the pipeline that supplies the refinery with Russian oil suddenly succumbed to a mysterious technical default."

Besides the need for foreign assistance in developing its oil and gas industry, Russia also needs to be wary of dropping oil prices or money shortages, as these factors could result in Russia going to great lengths to appease the foreigners it has scared away.

This article made me realize that concerns over oil and gas supplies around the world are not limited to the Middle Eastern nations. We probably at one time had high hopes that Russia would be a friend of the United States post-Communism and would readily trade its energy resources with us. The reality is, however, that Russia is not the democratic state we had hoped for, but one where the press is being silenced, the army is chaotic, corruption is rampant, etc. It appears that we cannot depend on Russia to be a friend to share energy resources and know-how with any more than we can the other turbulent nations where oil and gas are plentiful. Maybe it is time that we focus more on what we can do on the homefront to produce energy, such as perfecting solar power, wind power and ethanol, rather than focusing so heavily on other parts of the world that use energy resources as a weapon.

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