Moscowâ€™s attachment to statist economic policy is undermining its bid for global energy dominance, writes LEON ARON. By re-nationalizing its energy sector, Putinâ€™s regime is slaying its largest golden goose.
The idea that Russia is a new â€œenergy superÂpowerâ€ is all the rage in Moscow, thanks in part to President Putinâ€™s vigorous salesmanship. The counÂtry holds between 6 and 10 percent of the worldâ€™s known oil reserves and exports around seven milÂlion barrels a dayâ€”second only to Saudi Arabia. Last summer, the Kremlin pushed hard to make energy security the centerpiece of the G8 summit in St. Petersburg. Lost in the crash of cymbals, however, is Russiaâ€™s uncertain ability to keep up with growing world demandâ€”or even to maintain its current level of production, after a dazzling run from 1999 to 2004. While there are several reasons for concern, the underlying problem is sadly familiar in Russian history: a state ideology is poised to undermine the countryâ€™s progress at precisely the time when Russia seems on the verge of a breakthrough.