Country report / on RUSSIA - Research Paper Example

Moreover, they are the largest crude oil producers in the world as per the statistics of 2011. Above all, Russia is one of the top producers and consumers of electric power. It has more than 220 million kilowatts of installed generation capacity. Even though Russia is blessed with immense coal resources, exploitation of coal energy is minimal because of the abundance of other energy sources. Russia produced 10,228.52 thousand barrels of petroleum per day and consumed only 3,110.00 barrels per day in 2011.

In other words, Russia exported 7,118.52 barrels of petroleum per day in 2011 (International Energy Statistics: Russia, 2012). Main energy trading partners Europe is the primary energy trading partner of Russia. Since Russia is located near to many of the European countries, it is easy for those countries to import energy resources from Russia. In other words, transportation cost of energy resources would be minimal while European countries import such things from Russia. Along with European countries, Russia is exporting oil resources to countries such as America, China and India.

“Moscow kept it no secret that it intended to decrease its dependence on exports to Europe by increasing exports into Asia. In this broader strategy, Russia has focused primarily on three opportunities in Asia aside from China: India, Japan, and South Korea”(Yi, 2011). Recently India has imported some cryogenic engines from Russia to enhance the functioning of its nuclear power stations. In other words, Russia has advanced technologies to exploit nuclear power and many countries rely them for such technologies.

The future demand growth Russia is considered as an energy superpower even now though their status as a military superpower faced some problems after the destruction of former Soviet Union. It is estimated that Russia may face energy crisis in future because of the uncontrolled exploitation of energy sources. The demand for energy is growing internally and externally and Russia is producing more energy now to exploit the favourable situation. Since most of Russia’s energy sources are non-renewable in nature, an energy crisis is inevitable for Russia sooner rather than later.

The lack of development in new oil and gas fields, infrastructure, and technology caused energy shortages and an unavoidable gap between demand and supply. Russia cut exports for several weeks to provide for the domestic market the last three years. The high oil prices have generated substantial funds for the Russian economy; however, it has also caused high inflation. Russia’s high inflation and rift in distribution of oil wealth have led to political instability (Baldwin, 2009, p.13-14). Even though America is the sole superpower in the world at present, they are not so at least in the energy sector.

In fact America is one of the largest importers of energy sources. They are second only to China in terms of oil imports. Therefore the reliance of countries on Russia for oil and natural gas resources would definitely increase in the future. Since oil and gas resources are exhausting rapidly in other parts of the world, the demand for Russian oil and other energy sources would definitely increase in the past. The environmental challenges facing the energy sector Even though Russia is getting huge revenues from oil, natural gas and coal like energy sources, the uncontrolled