Civil G8 2006

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Ernest Kochetov. Russia’s energy move: energy industry in the global geoeconomic dimension

(basic accents of the energy security)

Short thesis of the intervention at the round table discussion of NGO experts on the priorities of Russian presidency in G8 2006 summit - energy security, education and health issues – (Moscow, February, 16, 2006)

One of the priority issues of the Civil G8 Project within the period of Russian presidency in G8 is the global energy security. The fact that this issue attracted the attention of the G8 leaders is very significant: the world community comes to the geo-economic paradigm of the world development, pushing aside the geopolitical and geo-strategic methods of solution problems. The energy sphere is a striking example of this universal tendency. .


1. The World entered the era of global transformations. The UN declared the transfer to the global model of the world development and invited the world community to reject the geopolitical attitude towards the modern world events. The UN Secretary General Kofi Annan in his Speech at the “Millenium Summit” (September, 6-8, 2000) said: “Our postwar institutions have been created for the International World, but now we live in the Global World. The effective reaction to this shift is the main institutional task that our leaders face today”. . Such attitude is timely and actual, because it reflects the real transfer of the world community to the geo-economic model of development. It is considered as a central vector and the dominant of the peoples’ joint participation in forming and redistribution of the world profit, overcoming geopolitical and geo-strategic ways of solving local and global crisis and challenges. .
In this connection the world community has to overcome the traditional viewing the prospects of the world development. The most glaring manifestation of globality is forming the network systems, first of all, within the world economy communication sphere. One of the most important dominants of globalizing world functioning is the energy. It applies special demands to the united world energy system – ENERGONET.
Conclusion: The energy will really determine the security and economic development of the world under the condition, that the world leaders will declare the transfer to the world development geo-economic model and refuse the geopolitical viewing the world economy system. Otherwise the world energy will be the arena of the states’ combat for possessing energy resources, what will lead the global explosion.

2. The modern world instability is predetermined today by the lack of common understanding of the global role and place of energy constituent in maintaining the minimally necessary world balance. The forming the global system of functioning of the world energy system ENERGONET will remove the problem. Like INTERNET the ENERGONET is a fundamental stabilizing factor providing the right and possibility of the access to the united world energy system and, as a result, leads to the harmonization of the world reproductive processes.
Conclusion: ENERGONET has a format of the world high innovative business-project and the interested countries’ governments must take part in its elaboration. The requirement specifications must be under the control of the world leaders and independent NGOs. .

3. The Westfall system of the strict world division starts braking the world development. The global energy networks constantly face the infinite administrative borders, geopolitical ambitions, military and strategic priorities etc. “Impenetrability” of the borders leads to the economic exhaustion, forcing the energy systems to dodge within and around the borders, to dive into oceans, to climb mountains, go through the tunnels difficult to traverse etc. The same situation is about the choice of a construction area where a fierce battle of ambitions, priorities and administrative barriers begins. The construction is often displaced to the areas with non-favorable seismic, geological and engineering conditions. This situation is not justified from the geopolitical point of view. Besides, the frequent changing geopolitical guiding lines threatens directly to eliminate the energy systems implemented with enormous difficulties.
Conclusion: It’s a need to mark out the ENERGONET as a special world system and provide it with the according institutional structure of functioning, regulation and responsibility for the undisturbed operation of the world economy.

4. The successful forming and functioning of the global system provides its manifestation on the geo-economic world atlas in electronic version. It will cover all elements of the energy reproducing process (raw materials sources, objects of the processing, communications, the sources of consumption etc.) It will allow to see all the world energy network, to react timely to the situations of local and global nature, various threats etc. This resource must be constantly compared to other pages of the world geo-economical atlas. It would predetermine the correlation of the global energy system functioning with other global systems, first of all, with the world internationalized reproducing bodies.
Conclusion: The working out of the electronic version of the world geo-economic atlas’ energy page is the primary task of the forming the world energy system.

5. The concordance of the energy systems with the internationalized reproducing bodies makes it possible to leave the out-of-date understanding of the raw and energy resources in the world reproducing balance. The de jure and de facto recognition of the raw and energy constituent as a competent participant of the world reproducing cycle (and, as a result, as a competent participants of forming the world profit within the framework of the internationalized reproducing bodies), not only eliminates the old status of the countries-delivers of energy as “raw appendages” but also provides these countries’ participation in the redistribution of the world profit within the framework of the internationalized reproducing bodies.
Conclusion: The world community has to forget about considering the delivering states as raw appendages of the world reproducing cycles, to understand the energy resources role as one of the main participants of forming the world profit, claiming to its part. .

6. Forming the global energy network provides serious correction of the price formation system at the world energy market. (Within the framework of the global energy system the energy deliveries must be realized not only according the world gas prices quotation, but also has to take into account the indirect markets: pharmaceutical, cosmetics, fine chemistry, ecology etc. The matter concerns about the gas rent in the broad sense of the word). It must be reflected within the framework of the conclusion of export and import transactions.
Conclusion: The profit from the energy delivery transactions must include the profits, related to the functioning of the whole spectrum of indirect industry branches, producing and selling goods on the base of the energy raw materials.

7. Nowadays the world after the period of the cold war came out to the stage of geo-economic paradigm of its development. The period of the post-industry engendered the enormous demand for the raw and energy resources to provide impetuous speed of the world reproducing processes. The world strategic balance if predetermined by the energy and raw constituent: we witness today the beginning of a dangerous battle for the world resources. This process is being mostly developed at the Eurasian region. After the USSR era the world is seeking for a new point of strategic balance. We can suppose that the Eurasian energy constituent will predetermine the strategic balance in the world. The most important role in this process belongs to the Caspian basin. This region attracts the strategic vectors of the world economy main players.
Conclusion: The energy constituent of forming secure balance strategic points in the global world is especially important at the Eurasian region. It is necessary to work out and adopt the geo-economic doctrine of the Caspian basin development, providing a special status.

8. The spontaneous and uncontrollable geo-economic world redistribution, first of all, its resource and energy constituent can create an explosive situation – the battle for resources. The creation of ENERGYNET can calm this situation. We have to direct this battle to the right direction: conclusion of treaties. It is necessary to create the special zones of the energy stability, on which the stable functioning of the world reproducing system depends.
Conclusion: The creation of energy responsibility zones is the main way to the harmonization of the world energy system.

9. In its structure, global energy system divides into wide, closed geo-economical zones. Russia is part of the South latitudinal energy zone (SLEZ), which, in the unified world energy space, embraces in circles sources of raw materials, their processing and transportation. SLEZ should be marked out and get world status.
Conclusion: World latitude zones should get tightly correlated with industrial latitudinal zones (in particular, with the North latitudinal industrial zone) through the system of meridional external economic ties. It will help to balance the world economy “North-South” system.

10. To provide a steady energy supply to the depressive world areas we need to create “World Energy Security Fund”. It can be financed from the extra incomes of the energy raw materials market. Besides that, the agenda also includes the question of the creation of the strategic world energy source reservoir.
Conclusion: The creation of the “World Energy Security Fund” and of the “Strategic World Energy Source Reservoir” is the pledge of the harmonious energy supply and development, provides the buffer of irregularity and accident (natural and technological catastrophes, local acute conditions).

11. After the world transformation in the 1990s, the world entered the homogeneous stage of its development: almost all of the countries follow the market model of development. This is what defines the rules of the game on the world economy arena – the energy carrier prices are shaped by the world market. Different deviations from this principle can lead to serious collisions and unstable functioning of the energy nets.
The peoples’ strive to the steady energy supply requires a fundamental reconsideration of our attitude to the responsibility for the bugs in the energy supply regularity. Transition to the geo-economical model in the world development introduced a new geo-economical category – the System of the Universal Responsibilities (SUR), which has graded the concept of “world division of labor”. National economics involvement into the global system both opens up the access to the world system and obliges the world reproducing cycles’ participants to support its regular work. Failures to execute this obligation should be treated as a geo-economical crimes. The world is on the verge of the formation of a geo-economical tribunal which had to control the symptoms of the of the unleashing war, develop the measures to prevent them and along with that develop the ways of influence on the geo-economical aggressors (reimbursement of the geo-economical attack victims, geo-economical contributions etc.).
Conclusion: institution of a geo-economical tribunal as a means counteraction against economical wars, will secure the energy community participants against geo-economical attack and raise the level of responsibility for unleashing geo-economical wars.
12. Geo-economical sector of the national interests requires certain protection, particularly for its energy constituent: global energy projects’ formation and realization shapes not only their mutual existence but their mutual protection as well. It’s about the new role of the power component, which knits with its economic component, forming a military-economical symbiosis. It means that at the very beginning of large-scale business negotiations it is important to involve power structures (meaning, they should be present at the negotiation table). Expenses on the energy project security should be included in the estimate. Now, entering the world economy system, there is a huge gap between economical and power elements
Conclusion: The protection of the Energy net acquires the primal importance under the condition of geopolitical thinking recurrence, when economy and finances become a powerful advancing weapon, able to make any country kneel.

13. The specific of the world energy nets (its extension, climate zone change, complexity and diversity of the landscape, access openness etc.) influences the style, method and formation of the world energy nets’ protection. It concerns especially the protection of the main energy points, as if one of them is attacked, the large parts of the net can be damaged (“falling domino” principle). That’s why it is acute to form Mutual powers of the geo-economical reaction, the ones that would be able to control the main energy points of the world energy system.
Conclusion: the agenda is to form geo-economical mutual powers of prompt reaction, which would be part of the new military-economical symbiosis.

14. World energy companies shape the agenda today. According to its economical power and political influence that exceed most of the countries, including the developed ones, it is necessary to officially assign to them the status of world life support corporations, allot them governments in the UN, and it is necessary to open representatives of the countries interested in the corporations themselves. It is time to make inventory of the main players at the energy field and carry out inventory of the whole system of energy objects and subjects, which are able to maintain the world energy balance and carry it into the world energy roll.
Conclusion: World energy corporations, which shape the trends of the steady world development and the world energy security should be allotted not only responsibility for their own activity but also with wide range of authorities and representatives in the international institution, in this way raising the level of their importance in the world affairs.

15. Formation of the united global energy net, ENERGONET, pre-defines the new approach towards world economy state of market 1) the world market of energy objects is being formed 2) development of the external economic connections in the energy sphere makes main accent on the economy aerial extension beyond national frames, instead of export-import operations, which makes a foundation for steady innovative transformation of the energy infrastructure, stimulated by the healthy market competition.
Conclusion: continuous innovative growth of energy structures economy zones beyond national boundaries leads to the constant energy structure renewal. The basic condition in the creation of the highly selective energy market becomes the involvement of the energy objects into the world commodity turn-over.

16. We should get prepared for the collapse in the sphere of the world prices, it is especially acute for the energy raw material sector. Now this problem seems to be hypothetic. But the fight for the resources can reveal the problem of a gigantic difference in the costs and the prices for the raw material resources. Then some of the sovereign countries, whose energy and raw material resources determine the global, compared to local or regional, geo-economical stability, maybe withdrawn from jurisdiction. The list of such resources may include: gas, oil, aluminum, nickel, caoutchouc, titanium, molybdenum, magnesium, chromium, bentonite, mercury, gold, uranium, lanthanides and others. Declaration of those resources as international (i.e. world property) may lead to a new state of the market and as a result to the new power “lay out” at the world arena.
Conclusion: World community has to be ready to the radical revision of the views on the energy and other resources: some sovereign countries may be withdrawn from the jurisdiction. These are the countries whose energetic, raw material and other resources determine the global, compared to local or regional, geo-economical stability.

17. The actions of the main “players” at the energy field should not go beyond the frames of the International Law. We are to satisfy a “need” in international law standards, concerned with the regulation of the transnational economy structures’ activity. It all will finally lead to the formation of the geo-economical law.
Conclusion: Energy System Formation and its world status juridical securing should be done within the frames of the global geo-economical system functioning. The agenda is to form the base of the geo--economical law.

18. The world has entered the phase of its politics economization. It changes the role of the foreign policy and military strategic structures. It is hard to overestimate the role of those structures in the formation of the world geo-economical system equilibrium. Global energy net (ENERGONET) formation affects the foreign policy departments’ level of responsibility - they have to create special structures within their department.
Conclusion: The world diplomacy has to cardinally change its priorities: considering the irrepressible process of the politics economization, the diplomatic corpus has to leave behind their goe-political way of thinking, which presupposes the usage of the energy resources as a militarized resource for the fulfillment of the geo-political imperial ambitions. The adoption of the geo-economical doctrine dismisses this problem. The world is entering the epoch when geo-economical arrangements play important role in solving all of the problems and diplomatic structures bear direct responsibility in these questions.


Russian global project “Geoeconomy: Russia’s energy move” is formed as an instant Russian energy strategy, which is based on the search for the platform which will harmonize the three planes 1) recognize the energy resources as a participants of the world e reproduction cycles; 2) form a flexible system of the energy transmission to any spot on the planet; 3) to stop the universal geo-political gambling, as playing with “energy cards” may cost a lot to the world community.

Kochetov, Ernest – Russian regional NGO “The Social Academy of Geo-economy and Globality”, President, Council for Global Problems of the XXI Century, Head, Center for Strategic Research of the Geo-economy, Head, Full Member of Russian Academy of Natural Sciences, D.E.

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