'Stability for Decades to Come': A Closer Look at Putin's Speech at REW-2023
17:50 11.10.2023 (Updated: 19:13 11.10.2023)
The ongoing sixth annual Russian Energy Week is being held in Moscow from October 11-13. Delegates and representatives of top energy companies from Russia, Turkey, Hungary, Iraq, and other countries are taking part in the event. The main topic of Russian Energy Week-2023 is the "New Reality of Global Energy: Creating the Future."
Russian President Vladimir Putin delivered a speech to the plenary session, the forum's main event, on October 11.
The REW-2023, which is taking place between October 11 and 13, has brought together over 4,000 visitors from more than 60 countries and territories at the Manege Central Exhibition Hall in Moscow. Russia extended invitations to high-ranking officials such as Prime Minister of Iraq Mohammed Shiaa Sabbar Al-Sudani, Prime Minister of Republika Srpska (Bosnia and Herzegovina) Radovan Viskovic, Deputy Prime Minister and Minister of Oil of Iraq Hayyan Abdulghani Abdulzahr Alsawad, and Executive Vice President, Minister of Economy, Finance, and Foreign Trade of Venezuela Delcy Eloina Rodriguez Gomez.
The Russian president's address is timely, given the chaos in the energy markets provoked by Western power games that have particularly backfired on Europe, according to Alex Krainer, founder of Krainer Analytics and creator of I-System Trend Following, who has worked as a market analyst, researcher, trader, and hedge fund manager.
"Without a doubt, we'll have a less reliable supply of more expensive energy, the whole economy will become much weaker and less competitive," Krainer told Sputnik. "In part, the Europeans were too relaxed about jeopardizing their energy security because they imagined they could easily replace Russian supplies with alternatives from Qatar or North Africa. But as it turned out, Qatar can't replace Russian quantities and the Trans-Saharan Gas Pipeline was meant to traverse Niger, so it is now in jeopardy."
Basic Priority of Russia's Fuel and Energy Complex: Domestic Consumers
Addressing the REW-2023, Russian President Vladimir Putin underscored that several centers of economic development have emerged across the globe, as the world is transiting to a multipolar order. This process provides new opportunities for the Russian fuel and energy complex, according to the Russian president.
"The Russian economy is currently undergoing such a stage of structural transformation. The geography of foreign trade, employment parameters, and the industry picture are changing, and completely new market prospects for small and medium-sized businesses are emerging. The Russian fuel and energy complex is also undergoing profound changes. They affect all areas of work: extraction and processing of energy resources, service and logistics, interaction with foreign partners," Putin told the participants of the Russian Energy Week.
However, Russia's basic priority in the energy sector is currently to ensure supplies to the national market, which has been increasing its energy consumption in recent years.
Per the Russian president
, the hike in energy consumption in Russia clearly indicates the positive dynamics of the country's economic growth.
The president touched upon the national gasification program, which has been gaining steam since 2021, with 375,000 households having already been connected to the gas pipeline network out of the planned one million.
In addition to that, Russia is planning to unify its Western and Eastern gas grids and link the Power of Siberia natural gas pipeline to the Sakhalin–Khabarovsk–Vladivostok gas transmission system.
Putin highlighted that the Russian authorities will increase the reliability of energy supply to Russian regions, paying special attention to improving energy efficiency in housing and communal services and transport. He particularly stressed that the Russian government is determined to solve the issue of soaring domestic gasoline prices and ensure the stability and predictability of costs.
"We will consistently improve the reliability of energy supply to the regions. Networks and energy transmission lines must operate clearly, sustainably, and have reserves for the development of territories," Putin said.
Russia Reaching Technological Sovereignty in Energy Field
President Putin emphasized the necessity of reaching full sovereignty in the energy field in terms of technology, personnel, and finances. He referred to the fact that Russia has made considerable progress on that path by developing new sophisticated equipment and technologies, educating energy specialists, and offering new mechanisms for financing and payments.
Since 2014, Russia has developed over 140 types of domestically-made products to ensure independence and uninterrupted operation of the nation's fuel and energy complex. The Russian state’s large-scale contracts for domestic equipment for the fuel and energy sector facilitate this process, according to the president.
Russia's Nuclear Industry Has No Competitors Abroad
Vladimir Putin pointed out that Russia's nuclear industry and Rosatom, as its flagship, is second to none. Currently, the Rosatom state nuclear corporation is simultaneously building a whopping 22 power units abroad, which constitutes 80% of the world's market, per the president.
"The Russian engineering school for the construction and maintenance of nuclear power facilities is not only strong, but has practically no competitors at the global level," Putin told the plenary session of the REW-2023.
Putin referred to Rosatom's Akkuyu project in Turkiye, the Ed-Dabaa Nuclear Power Plant in Egypt, and the Rooppur Nuclear Power Station in Bangladesh.
When it comes to Egypt, Russia is not only building nuclear facilities in the country, but is providing services and education, thereby laying the groundwork for the North African state's energy sovereignty, the Russian president emphasized. Per him, this complex approach is one of Rosatom's major competitive advantages.
Russia is not against the participation of third countries in construction of Russian nuclear power plants abroad, the Russian president added.
Russia's Green Hydroelectric Power
Vladimir Putin drew attention to the fact that RusHydro – Russia's largest hydro-generating company – remains one of the world leaders in the field of clean and green hydropower. Russia has built 350 hydro-electric facilities in 54 countries, including in Africa and Latin America.
Building and providing
maintenance for hydro-power stations across the world allows Russia to enhance its technological cooperation with foreign states and strengthen interstate economic relations, too, according to the Russian president.
Anti-Russian Sanctions Have Taken Toll on Europe
Having imposed sweeping sanctions on Russia, EU member states are trying to completely abandon Russian energy, the Russian president said, adding that these efforts have already brought their economic growth to a zero mark.
"In Europe, we are being led by individuals who are deeply attached to ideological constructs, but have no regard for, or even understanding of the economic costs of their pursuit of such ideological ends," said Alex Krainer. "Well, the costs have been staggering and they'll only keep growing until there's a change of course. Germany has lost an estimated half a million jobs and even Economy Minister Robert Habeck has had to admit that the situation is due to high energy prices, which he said Germany is feeling more because it was used to cheap Russian gas. But as we will soon discover, we will reap a veritable banquet of consequences for winning our freedom from Russian energy dependence, including the collapse of the euro and the breakup of the EU and probably NATO with it.”
Putin noted this year that European economic growth is demonstrating negative dynamics, given that the bloc's industrial sector has long been reliant on Russia's cheap energy commodities. Likewise, the European population is facing negative income growth, according to the Russian president. In contrast, leading Asian nations – China, India, Indonesia, Malaysia, and Vietnam – have been outpacing their US and EU peers in terms of their share in global gross domestic product (GDP) adjusted for purchasing power parity (PPP), he remarked.
"It's a difficult path in Europe, that's absolutely true," Thierry Bros, professor at the Paris Institute of Political Studies and a contributor to Natural Gas World, an independent specialized website, told Sputnik. "We went through this last winter, partially because winter was warmer than perhaps what we were expecting. We are going to again have difficulties in the next two winters, as most analysts are thinking, because of the attention on the gas market."
The West's irresponsible energy policies have not only backfired on the US and Europe, but have brought chaos to the entire global energy market:
"The actions of some of our colleagues, Western elites, have brought chaos to the global energy market, including the oil market, the negative consequences of such politicized steps affect the entire global economy, now this has to be corrected, and this, of course, has to be done by responsible market participants," Putin said.
OPEC+ Works to Stabilize Global Energy Market
According to Vladimir Putin, the stability of the global energy market requires the international interaction of major suppliers on open and transparent terms. The Organization of the Petroleum Exporting Countries Plus (OPEC+) – a bloc consisting of the 13 OPEC members and 10 non-OPEC oil producers – has proven effective in coping with global energy challenges, according to Vladimir Putin. Russia remains one of the bloc's leading members. The president reminded the audience that the stable energy market is a key to the welfare of global populations.
"Russia, as before, will make a significant contribution to balancing the global energy market, and develop partnerships and cooperative ties with those countries that want and are interested in this," the Russian president said.
He noted that Russia's shift in the deliveries of its energy commodities from the Atlantic to the Asian market is not just a result of the Western sanctions policy, but a response to objective economic trends. While Asia's share in global energy consumption is set to grow from 22% in 2020 to over 30% by 2050, the EU's share is projected to shrink dramatically.
Russia's LNG Industry Growing Fast
It is projected that the production of liquefied natural gas (LNG
) by Russia will grow substantially in the coming decade, according to the president.
"Russia also has ambitious plans in the field of LNG. In the next decade, its production should triple — to 100 million tons per year," Putin told the participants of the REW-2023 forum.
He noted that the LNG industry offers flexibility in supplies and is gaining momentum worldwide with new LNG terminals being built across the world. By 2035, global LNG demand is expected to rise to around 600 million metric tons per year (MTPA).
"Energy production is key to economic development, and Russia's tripling of its LNG production over the next 10 years will be a great positive for the Russian economy as well as the economies of Russia's partners in the region," Krainer remarked, adding that it could potentially "draw the world closer to Russia in diplomatic and political ways as well."
Russia not only has the ability to enhance its share in the global LNG market, but is developing new routes to deliver the commodity, the president noted, referring to Russia's Northern Sea Route (NSR), an ambitious Russian Arctic maritime transport artery running through the waters of Russia’s Exclusive Economic Zone (EEZ) in the far North, stretching from the Sea of Okhotsk and the Bering Sea in the east to the Barents and White Seas in the west.
Furthermore, Putin referred to a number of innovative LNG endeavors, including the Arctic LNG-2 project in Murmansk. The gravity-based structures of the Arctic LNG-2 will minimize the capital cost and the project's footprint in the Arctic zone of Russia. Once completed, it will encompass three liquefaction trains, producing a total of 19.8 million tons per annum (MTPA) of LNG, and up to 1.6 MTPA of stable gas condensate (SGC).
The Russian president pointed to the successful development of Russia's fuel and energy complex, stressing that the nation will continue to making a significant contribution to balancing the global energy market together with its partners.
The annual REW forum has become a key international platform for discussing global energy trends. The event traditionally hosts high-profile political leaders and energy industry heads. This year, the platform features 30 events, divided into thematic blocks: the International Agenda, Sustainable Development and the Climate, Scientific and Technological Development and the Digital Transformation, and the Development of the Fuel and Energy Sector.