Natural gas now more expensive in Russia than in U.S. / Russians want liberalization of government institutions / Putin aware of calls for change
Nezavisimaya Gazeta
Natural gas now more expensive in Russia than in U.S.
The price of natural gas in Russia has exceeded that of gas in the United States for the first time. According to American economists, the average price for natural gas in the U.S. fell to $99 per thousand cubic meters (TCM) and will continue to decline. Russia is seeing the opposite trend, the government has already increased the price of gas for the central regions to more than $120 and plans further increases for 2012-2014.
Gas prices in the U.S. fell 32% in 2011 reaching a two-year low, The Wall Street Journal reported. The drop is caused by a growth in supply. According to Barclays Capital estimates, U.S. gas production grew 10% in 2011 and could rise another 4% in 2012.
This situation will continue until at least 2013 and prices will fall to their lowest in a decade, to an estimated $71 per TCM, according to Bank of America Merrill Lynch analysts.
The main reason for the decline in gas prices is the so-called shale boom brought on by extensive horizontal drilling and hydraulic fracturing. Many companies also produce associated gas from oil production. High oil prices are pushing the industry to drill new wells and increase production. This automatically increases the production of associated gas, which leads to an increase in the overall supply. Another factor that indirectly stimulates production growth is the legal inability to renegotiate contracts with small oil and gas companies. Fearing fines, they are forced to continue production, despite a sharp drop in prices.
In Russia, the regulated price of gas for consumers in 2011 increased more than 15% over 2010. The government has planned for the same rate of increase over the next three years.
Troika Dialog analyst Valery Nesterov sees the root cause of the price increases as policies and approaches to management that differ between the two governments. He said that fuel prices in the U.S. have traditionally been an important political variable, one that shapes the national energy policy.
In Russia, the long-standing policy of administrative price increases for natural gas accounts for Gazprom's needs and the unused potential for energy savings. It is argued that more expensive fuel will increase the energy efficiency of the economy, although the rapid price growth over a decade has not fulfilled these expectations. Nesterov said that the government should restrict Gazprom's appetite, so as not to destroy the competitive advantage of other companies. At the same time, it should contain the growing consumption of cheap energy.
“The U.S. authorities want to make prices minimal for the domestic market and to achieve complete independence from external energy sources,” said Dmitry Alexandrov, head of investment analysis at Univer. “Russia has a policy of binding prices to yields of export and domestic supply. This approach is explained by the interests of the state budget and the development of the domestic gas infrastructure. But this principle of domestic price calculation is opaque and not everyone supports it.”
Moskovskiye Novosti
Russians want liberalization of government institutions
Russians support direct gubernatorial elections but are not interested in creating more parties. United Russia’s electorate is looking for political reform more than others, according to a VTsIOM opinion center survey taken on January 7-8.
People support the political liberalization initiatives advanced by President Medvedev and Prime Minister Putin in late 2011, in particular the idea of controlling government officials’ spending to expose criminal income and to fight corruption (87% for, 7% against). Furthermore, 77% of respondents were for creating public television networks, 76% for equipping polling stations with web cameras, 73% each for direct gubernatorial elections and for delegating more authority to the regions, 62% for strengthening party representation on election commissions, and 57% for single-candidate election districts for parliamentary elections.
Only 45% support the simplified registration of political parties and 44% want fewer signatures for registering candidates. These figures support recent Levada Center polls: 56% of respondents are against creating new political parties; only 26% support the idea.
Deputy Head of the Levada Center, Alexei Grazhdankin, traces the public’s skepticism to the early 1990s, when the parties were “impotent compared to the bureaucrats, when they lacked resources and had little influence.” VTsIOM head Valery Fyodorov said only 25% of Russians approve the activities of political parties, mainly the parliamentary parties.
More respondents support direct gubernatorial elections. Grazhdankin said: “The president and the governors are among the top five in terms of influence, while the State Duma, the regional legislatures and the parties are at the bottom of the list.”
Fyodorov said: “The collection of signatures is a necessary filter without which we could be thrown back to 1995, when half of the electorate had no representatives in the Duma.”
Most of the LDPR electorate is against the new proposals, while the Communist Party, A Just Russia and United Russia electorates welcome the tandem’s initiatives wholeheartedly. United Russia’s electorate is for controlling government officials’ spending (90%), establishing public television networks (80%), reinstating direct gubernatorial elections and equipping polling stations with web cameras (79% each).
Fyodorov said these ideas are popular because they have been advanced by Medvedev and Putin. “People do not support ideas but personalities,” he said. This means that they have no personal opinion regarding the political agenda. He explains this by a decade of political apathy.
The supporters of non-parliamentary parties advocate a simplified registration of candidates (63%), easing signature requirements (55%) and recreating single-candidate election districts (72%), which should help non-parliamentary parties win State Duma seats.
As for those who do not typically vote, 58% are for direct gubernatorial elections, only 47% are interested in the process of forming the State Duma and only 32% in the rules for registering parties and candidates.
Deputy Head of the Center for Political Technologies, Alexei Makarkin, said more parties should be created. “While people are against abstract new parties, their approach will change when they see prominent politicians advancing practical ideas.”
Vedomosti
Putin aware of calls for change
Vladimir Putin said he knows about the increasing calls to hand over power “to better people,” but doubts that those who advocate this have a clear idea of what to do afterwards.
The prime minister, who plans to run for president in March, laid out his concerns in a long essay published on his pre-election website. Its title, “Russia Muscles up – the Challenges We Must Rise to Face,” sounds like an allusion to a diplomatic note Russia circulated among foreign missions in 1865 following a defeat in the Crimean War. The note was largely taken to imply that the empire was preparing for a new war.
“Today there is much talk of various ways to update the political process. But what is being offered as the bargaining point? How exactly should we hand power over to ‘better people’? And what would come next? What should be done afterwards?” he asks.
Putin notes that he is opposed to revolution but is supportive of steady development. He explains why he wants to seek reelection and proposes a range of issues for priority discussion after the elections.
He calls for a dialogue between the government and the public, insisting that people should be able to discuss their politicians’ virtues and weak points, and also the content of their policies, the programs they propose.
He says he wants to be president to wipe away anything that hampers the nation’s progress and development, reminding his readers that he first came to power amid a deep crisis in the system. He and his team successfully led the country out of an impasse and prevented it from sliding into civil war; they broke the back of terrorism, restored Russia’s territorial integrity and constitutional order, and secured one of the world’s fastest rates of economic growth including an increase in real incomes for a whole decade.
Putin calls for completing the construction of a political, social and economic system that is flexible, constantly growing and at the same time stable and sustainable. According to Putin, such a system would guarantee Russia’s sovereignty and prosperity for decades to come.
Referring to the government’s goals and objectives, Putin cited the need to eradicate poverty. In his words, a middle class has formed in Russia, which needs to grow and reach the majority of the population. He pins his hopes on educated Russians, insisting that high-tech jobs be created for young professionals. He also points out the need to build a system of “social lifts” and restore people’s trust in the government and each other.
“Trust among people only develops in a society knitted together by shared values and priorities, one where people have not lost their faith, integrity or sense of what is fair,” he writes.
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