| And save Gazprom from losses, and miners from unemployment This coming Friday, at the House of Unions, at the initiative of the Federation Council, a meeting will be held on the development of the energy complex. Senators will gather representatives of the government, the presidential administration, relevant departments, the State Duma and business to discuss the draft “Russian Energy Strategy until 2020.” In the spring, the Cabinet of Ministers already considered the draft strategy, but sent it for revision. The document should be finalized by December.
One of the key issues of the strategy is equalizing the fuel and energy balance within the country. It's no secret that gas now ($18-20 per thousand cubic meters) costs almost twice as much as coal, not to mention fuel oil, which affects the competitiveness of coal within the country. Everything would be fine if this price disproportion was achieved on the market, but in reality this is a consequence of government regulation.
It is obvious that a one-time equalization of prices would be disastrous for the majority of the population and the country's economy. However, it is clear that even without a gradual transition to economically justified gas prices, the situation will worsen in several directions at once. Firstly, the process of gas saving, and, accordingly, energy saving in general, which is the cornerstone of the energy strategy, will not be stimulated - why save something that costs a penny. Secondly, gas reserves in the country are quite limited, and at the current rate of consumption it will not last long. According to rough estimates, there are confirmed reserves in Russia for only 50-60 years, and, for example, for coal this figure is ten times greater.
It is the coal miners who are among the most consistent (of course, after Gazprom) supporters of increasing domestic gas prices. And they propose to give priority attention to the issue of equalizing the country's fuel and energy balance. As you know, the Ministry of Economic Development has prepared a draft government resolution that will allow Gazprom to sell 5% of its gas at free prices. It is expected that it will be signed in December, after the Cabinet of Ministers considers the concept of gas market development, and will be the first step in this direction. However, as Oleg Misevra, a member of the State Council working group on the coal industry and President of SUEK Baikal-Ugol, said in an interview with a correspondent of the Vremya Novostey newspaper, this is not enough. In his opinion, all actions in this direction should be clearly and specifically described in the energy strategy.
The fact is that it is not enough to allow Gazprom to sell part of the gas (approximately 20-25 billion cubic meters per year) at free prices - it is necessary to reduce Gazprom’s balance sheet assignments by the same amount. As the concern reported to the Vremya Novostey newspaper, today the proportions of domestic consumption are as follows: 60% - energy, 25% - the rest of industry and 15% - public sector employees (housing and communal services and others). According to the proposals of Gazprom and Mezhregiongaz, first of all it is necessary to reduce mandatory supplies to export-oriented enterprises, then to the rest of the industry, energy sector, and in ten years to the population. However, according to Mr. Misevra, for those industries that use gas as an “irreplaceable raw material” (chemicals and petrochemicals), rising tariffs are like death: “We are so far behind the West in technological terms that we can compete only due to low gas prices. If the price of gas rises sharply, for example, our fertilizers (and we export 80% of what we produce) will simply be forced out of foreign markets. Then we will have to raise prices within the country, and as a result, agriculture will be able to forget what mineral fertilizers are.”
In this regard, coal miners propose, at the first stage, to shift the burden of transferring part of the gas to the market primarily to power engineers. Oleg Misevra believes that there are many prerequisites for this. Firstly, RAO UES of Russia has a sufficient amount of capacity that can now safely switch from gas to coal. Even Anatoly Chubais said at a meeting of the State Council Presidium that he was ready to switch to coal if the price of gas was higher. Subsequently, large coal companies are ready to invest money in the re-equipment of thermal power plants so that they can operate on coal. This, in their opinion, will more than pay off in increased sales. Secondly, according to expert calculations, says Oleg Misevra, at the first stage there will be no tariff effect. If instead of 140 billion cubic meters of RAO they are obliged to buy about 10 billion on the market, the tariff increase will be no more than 1%. Thirdly, the state will receive a rapidly growing coal industry, which has enormous social weight.
But the interlocutor of the Vremya Novostei newspaper considers the consolidation of all stages of action in the Energy Strategy to be a mandatory condition. “The energy transition to coal is inevitable, not now, but in five years, as the government moves to create a long-term plan to equalize gas prices with other types of fuel,” says Mr. Misevra. - But the fact is that the coal industry has very high inertia. And it is impossible to dramatically increase production by half in a year. Therefore, we now need to prepare conditions for a smooth transition of energy to coal. That is, we must know that in 2003 we need to increase production by 10 million tons, then by another 10 million, and so on. Otherwise, when the gas price is liberalized, energy companies will either have to burn expensive gas and get expensive electricity, or buy coal abroad, which is not in line with state interests.”
The head of RAO UES of Russia, Anatoly Chubais, said that in the nine months of 2002 the company increased gas consumption by 5% compared to the same period last year. At the same time, he noted that the energy holding during the same time reduced the volume of coal purchases by 16%. And he explained this by the presence of coal reserves from last winter. Mr. Chubais sweetened the pill for coal miners by obliging the general directors of energy companies to solve the problems of repaying 80% of the debt to coal companies, the amount of which amounts to 4.5 billion rubles, by January 1, 2004. Alexander DAVYDOV |
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