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Soviet oil and gas
Book reviews
safety and the stockholders' investments. When a second edition is published, it would benefit from a preface to explain its purpose, a detailed table of contents, and an index. Greenhalgh's book stands apart from those that single mindedly argue either for or against nuclear power. Rather it seeks a middle ground where the advantages and disadvantages, benefits and risks of various energy sources can
be compared with some civility. The reader will have to measure his success. His panoramic treatment will be useful for those who have to think about future sources of energy supply as well as for providing a good review for proponents and critics alike. It should be a useful reference for years to come.
more concerned with the geopolitical issues and more space is devoted to long-term trade issues. Both in their spheres are useful. They also, by and large, confirm each other's judgements which is reassuring. There is however a very basic problem about forecasting Soviet oil and gas statistics and, in particular, Warren H. Donnelly forecasting the export levels to the The Library of Congress West. The basic data consist essentially Washington, DC, USA of published statements by the Soviet government which leave out rather important areas - there are, for example, no good data on internal consumption, something frankly admitted by Stern but rather concealed in the E I U report which presents rather too recently as an international supply; in much irrelevant or out-of-date infor1970, only 2 billion m 3 were exported, mation. In practice, the only way to all to Eastern Europe. However by estimate consumption is to subtract 1979, exports had soared to 49 billion external trade from published producm 3, about half to Western Europe. (1 tion figures, a process which leaves billion m 3 is roughly 1.4 mtce). This forecasts of future external trade rather meant that Russia supplied about 6.3% in the air. of E E C gas consumption. It is natural to emphasize the interProduction forecasts national export side of Soviet oil and gas production but, as both these books Soviet oil and gas production forecasts, point out, exports to Western Europe based upon Five-year Plan estimates, are marginal supplies both to Soviet have been unreliable in the past often internal consumption and also to with considerable shortfalls. However supplying Eastern Europe. This latter both volumes note that recent point is quite important as efforts by experience, particularly in the gas the Russians to shift Eastern Europe sector, has been better with production fuel purchases into more diverse fulfilling Plan targets. The next decade supplies have largely failed and these requires a major shift in both oil and countries are very dependent on Soviet gas production to the very rough condienergy. There are good strategic tions of Siberia. The production political reasons to believe that Russia problems of Russian oilfields probably is unlikely to starve Eastern Europe to have been o v e r e m p h a s i z e d - a view trenchantly taken by Wilson and, more feed Western Europe. guardedly, by Stern. But production in the traditional regions does appear to Focus have been pushed hard in the past few Both books cover somewhat the same years and the western Siberian reserves ground though the E I U report have got to be put on-stream soon and obviously has a broader spectrum. in considerable volume. Success in this However their focus is rather different. region has yet to be fully established. Both authors concur in their view of The E I U report is particularly concerned with the details of the Soviet future oil exports. That is that they hydrocarbon industry, its technical have reached a plateau and will fall problems, infrastructure requirements sharply after 1985. In the process, and its future supply needs. It is Eastern Europe may feel the pinch but presumably aimed at rather a specialist it is unlikely that the Russians will have market, those who need information to go to the international market. Such about the markets offered by the a conclusion seems reasonable. industry and other hydrocarbon Both generally agree that in 1990, development specialists. Stern is much Russia will have 130-145 billion m ~ of
Soviet oil and gas - forecasts difficult but improving SOVIET OIL AND GAS by David Wilson
EIU Special Report No 90, Economist Intelligence Unit, London, 1980, 138 pp, £60.00. SOVIET NATURAL GAS DEVELOPMENT TO 1990 by Jonathan P. Stern
Lexington Books, Lexington, MA, 1980, 187pp, £13.50. Soviet oil supplies to the West first began to be commented on in rather lurid fashion when, in the early 1960s, E N I used 'red oil' to break away from the traditional oil suppliers, the international oil companies. Some orchestrated fears were voiced at the time about the alleged danger of reliance on Communist supplies but in post-OPEC times these receded and Soviet oil exports grew rapidly from 1960 to 1978 at a rate averaging 9.8% annually. By 1978, 160 million tonnes of crude and products were being exported, about 56% to socialist countries and 38% to O E C D , principally West Germany, Italy, Finland and other EEC countries. Such supplies, although priced strictly at OPEC levels or even above, have come to be regarded as a useful though minor offset to OPEC sources. (About 4.5% of EEC supplies came from Eastern Europe in 1977, probably a peak year). Soviet gas has emerged much more
244
ENERGY POLICY September 1981
safety and the stockholders' investments. When a second edition is published, it would benefit from a preface to explain its purpose, a detailed table of contents, and an index. Greenhalgh's book stands apart from those that single mindedly argue either for or against nuclear power. Rather it seeks a middle ground where the advantages and disadvantages, benefits and risks of various energy sources can
be compared with some civility. The reader will have to measure his success. His panoramic treatment will be useful for those who have to think about future sources of energy supply as well as for providing a good review for proponents and critics alike. It should be a useful reference for years to come.
more concerned with the geopolitical issues and more space is devoted to long-term trade issues. Both in their spheres are useful. They also, by and large, confirm each other's judgements which is reassuring. There is however a very basic problem about forecasting Soviet oil and gas statistics and, in particular, Warren H. Donnelly forecasting the export levels to the The Library of Congress West. The basic data consist essentially Washington, DC, USA of published statements by the Soviet government which leave out rather important areas - there are, for example, no good data on internal consumption, something frankly admitted by Stern but rather concealed in the E I U report which presents rather too recently as an international supply; in much irrelevant or out-of-date infor1970, only 2 billion m 3 were exported, mation. In practice, the only way to all to Eastern Europe. However by estimate consumption is to subtract 1979, exports had soared to 49 billion external trade from published producm 3, about half to Western Europe. (1 tion figures, a process which leaves billion m 3 is roughly 1.4 mtce). This forecasts of future external trade rather meant that Russia supplied about 6.3% in the air. of E E C gas consumption. It is natural to emphasize the interProduction forecasts national export side of Soviet oil and gas production but, as both these books Soviet oil and gas production forecasts, point out, exports to Western Europe based upon Five-year Plan estimates, are marginal supplies both to Soviet have been unreliable in the past often internal consumption and also to with considerable shortfalls. However supplying Eastern Europe. This latter both volumes note that recent point is quite important as efforts by experience, particularly in the gas the Russians to shift Eastern Europe sector, has been better with production fuel purchases into more diverse fulfilling Plan targets. The next decade supplies have largely failed and these requires a major shift in both oil and countries are very dependent on Soviet gas production to the very rough condienergy. There are good strategic tions of Siberia. The production political reasons to believe that Russia problems of Russian oilfields probably is unlikely to starve Eastern Europe to have been o v e r e m p h a s i z e d - a view trenchantly taken by Wilson and, more feed Western Europe. guardedly, by Stern. But production in the traditional regions does appear to Focus have been pushed hard in the past few Both books cover somewhat the same years and the western Siberian reserves ground though the E I U report have got to be put on-stream soon and obviously has a broader spectrum. in considerable volume. Success in this However their focus is rather different. region has yet to be fully established. Both authors concur in their view of The E I U report is particularly concerned with the details of the Soviet future oil exports. That is that they hydrocarbon industry, its technical have reached a plateau and will fall problems, infrastructure requirements sharply after 1985. In the process, and its future supply needs. It is Eastern Europe may feel the pinch but presumably aimed at rather a specialist it is unlikely that the Russians will have market, those who need information to go to the international market. Such about the markets offered by the a conclusion seems reasonable. industry and other hydrocarbon Both generally agree that in 1990, development specialists. Stern is much Russia will have 130-145 billion m ~ of
Soviet oil and gas - forecasts difficult but improving SOVIET OIL AND GAS by David Wilson
EIU Special Report No 90, Economist Intelligence Unit, London, 1980, 138 pp, £60.00. SOVIET NATURAL GAS DEVELOPMENT TO 1990 by Jonathan P. Stern
Lexington Books, Lexington, MA, 1980, 187pp, £13.50. Soviet oil supplies to the West first began to be commented on in rather lurid fashion when, in the early 1960s, E N I used 'red oil' to break away from the traditional oil suppliers, the international oil companies. Some orchestrated fears were voiced at the time about the alleged danger of reliance on Communist supplies but in post-OPEC times these receded and Soviet oil exports grew rapidly from 1960 to 1978 at a rate averaging 9.8% annually. By 1978, 160 million tonnes of crude and products were being exported, about 56% to socialist countries and 38% to O E C D , principally West Germany, Italy, Finland and other EEC countries. Such supplies, although priced strictly at OPEC levels or even above, have come to be regarded as a useful though minor offset to OPEC sources. (About 4.5% of EEC supplies came from Eastern Europe in 1977, probably a peak year). Soviet gas has emerged much more
244
ENERGY POLICY September 1981