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Russian Government to draft an Energy Security Doctrine

Security Council meeting at the Kremlin on the current state of and measures to guarantee Russia's energy security

Dmitry Medvedev instructed the Government to draft an Energy Security Doctrine.

The President said that priority measures to implement the doctrine should include sustainable long-term uninterrupted supply of energy resources, active development of hydroelectricity and alternative energy sources, setting rapid reaction procedures for emergency situations, modernising fuel and energy sector enterprises, special efforts to protect energy facilities from terrorists, and international energy cooperation.

Mr Medvedev stressed that energy security is an essential condition for Russia’s sovereign development and has a direct impact on the country’s ability to achieve its social and economic goals, stay competitive on global markets, and increase its global standing.

* * *

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: Good afternoon, colleagues,

One of the items on our agenda today is a key issue in the economic sphere and one we return to on a regular basis: national energy security.

Energy security in any state is a guarantee of the nation’s sovereign development. The same is true for our country, even though we seem to have more energy resources than any other state. Energy security has a direct impact on the country’s ability to achieve its social and economic goals, and stay competitive on global markets.

Today the Russian fuel and energy sector amounts to about 12% of global supply of oil and coal, nearly 25% of global gas supply, and is the fourth largest producer of electricity in the world. These are very impressive figures.

The energy sector’s share of Russia’s gross domestic product is above 30%. It is a guarantee of our development and at the same time a challenge to our progress. We realise that the situation in the energy market is unstable, as was proved once again by the events of late 2008 and early 2009, that it often changes and not necessarily to the benefit of energy-producing states, such as Russia. Incidentally, this is caused not only by sharp fluctuations in oil prices, especially during the crisis, but also by a growing shortage of energy resources.

We have repeatedly said that Russia is not interested in a high monopolistic energy price; what we want is price stability and fluctuation predictability, in other words, reasonable price. At the same time, the proven reserves of oil and gas in our country are being depleted, although they are still quite sufficient.

The technological level of the Russian fuel and energy sector is also lagging behind. The depreciation of its capacities, especially in the electricity generation, leads to disruptions in electricity and heat supply, as well as industrial accidents, including ones as horrific as the accident at the Sayano-Shushenskaya Hydroelectric Station.

The impact of the fuel and energy sector on the environment remains highly negative, that is an undisputed fact.

It is clear that we need an integrated system of measures to restore order and to realise our most important goal: the modernisation of the Russian fuel and energy sector. We have adopted a number of approaches in this area, and they are effective, including the Energy Strategy and the general plan for the development of facilities in the electric power industry, the oil industry and the gas industry. However, that is still not enough.

We must consider taking an integrated approach to this issue. Therefore, the Government should draft an Energy Security Doctrine, which in this case is a justified step, and identify its priorities and measures to implement this doctrine. I will name some of them now.

First. It is imperative to ensure sustainable long-term supply of energy resources and to accumulate a reserve of these resources. We are all aware of energy efficiency problems. Unfortunately, we are still depleting our gas reserves unreasonably, converting even thermal power plants and boiler rooms to the blue fuel consumption, whereas they could operate on coal or some other fuel just as efficiently. But it’s easier to use natural gas. The solution for the problem is evident but most countries adopt a differentiated approach to tackling such problems.

I have repeatedly pointed out to the governors that it is not necessary to build gas pipelines to every last village in the country, especially villages that have just one or two houses. It would be much easier to lower the price of electricity and to supply high quality electrical appliances to the people who live there.

The quality of their life would not be affected but we will be able to save on laying dozens of kilometres of pipes and will avoid creating excess capacity. Therefore, the country’s gasification, the task I worked closely on in the past and continue to monitor now, must not be taken too literally and must have reasonable bounds.

Conditions must be created for the growth of investment in technological upgrading of the fuel and energy sector, while energy companies should be encouraged to adopt new technologies ensuring greater recovery in oil and gas production.

Second. We must step up the development of hydropower generation and other non-fuel energy as they are most cost efficient and environmentally friendly, to expand the construction of energy facilities in the regions using local resources, including renewable and alternative energy sources. We will need a separate programme for the extraction of hydrocarbons from unconventional sources, as well as regular monitoring of emerging technologies in this area and plans for their implementation.

Third. Environmental safety is a top priority. Fuel and energy facilities must have clear rapid reaction procedures for industrial accidents and natural disasters.

Guidelines have been adopted for the maximum possible lifetime of power plants and a ban is in place on the use of worn out and obsolete power equipment. Here we must tell the truth about what can and what can’t be used, and not try to gloss over it.

We must also establish a system of space monitoring of environmental and geodynamic processes, particularly in the areas of large and unique deposits.

As regards the continental shelf: we have agreed to hold inspections at oil-producing facilities to make sure they have safe technologies and equipment to contain accidents. We will also establish regional mobile permanent readiness teams that can tackle the challenges of disaster relief.

I have repeatedly had occasion to say that all of us, and not only the US, must draw lessons from the accident in the Gulf of Mexico; that is why there is a global initiative. But we need to think about our own responsibility, not point the finger at others, and be sure that our facilities are absolutely secure.

Special measures must be taken to protect energy facilities from terrorist attacks. I have already spoken about this, unfortunately, following attacks on such facilities. There should be an effective modern security system and strict discipline, otherwise the facilities are vulnerable to attack.

Fourth. Our key objective is modernisation of fuel and energy sector’s infrastructure enterprises and their transition to an innovative development model. It is clear what must be done. We must build modern generating capacity and modern energy networks, making them compatible with the energy grids of other countries where that may be to our advantage and profit. To achieve this, we must support research and development aimed at creating advanced technologies.

A significant effect can be achieved by setting up so-called technology platforms and smart electrical grids, the utilisation of nanomaterials in energy technology and even the use of Russian supercomputers in order to ensure efficient energy distribution.

It is equally important to improve the education system and teach modern technology, which should be done in each region. New forms of international energy cooperation should be developed. This does not apply only to Europe, where we have trodden all the paths and know the situation inside out, but also to a large extent to the Asia-Pacific region.

As a partner, this region is relatively new for us, although we are part of it, and it is very fast growing and very promising. It must become the focus of our efforts, especially in the context of the forthcoming APEC summit to be held in our country in 2012.

Once again I would like to emphasise that energy security for us does not just mean compliance with relevant standards but is a way to achieve critical social goals and to address the tasks facing our state: it means heating and electricity in homes, schools and hospitals, and a better life in our communities. It is these issues we must focus on.

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