Vladimir Ryabov
Usually, all the SPIEF in St. Petersburg were held under strong suspicion that the “big brother” from across the ocean is watching what is happening in the salons of the forum at Pulkovo Heights. Therefore, they talked with restraint and with an eye to the sanctions of the “big brother”, if suddenly something does not suit him. But the global economic crisis, which lasted for a decade, exhausted the wealthy travelers behind their world economic leader from behind. The audience present at SPIEF'19 was very tired of American sanctions and there was no reason to rely on its restraint. First of all, impatience was manifested by the organizers of the SPIEF'19, in which the PRC representatives, led by the CPC Chairman Xi Jinping, did not lag behind.
The organizers of the SPIEF'19 intended to consider the issues of world energy, the digital economy and the prospects for space exploration. The tone of the discussion was set by Igor Sechin, focusing on energy and resources, which is well known to him. And it turned out that those gathered at the forum, after I. Sechin’s speech, had greatly forgotten about the digital economy, and the space perspectives completely disappeared from their sight, just like the scientists themselves, who were out of work.
The official topic of discussion at the SPIEF'19 this year is devoted to shaping the sustainable development agenda, but this was happening in extremely difficult times. According to Igor Sechin, energy market participants must now answer the question “Have we passed or not the point of no return?”. Market principles of work and mutually beneficial dialogue fade into the background, and the key role is played by the strategy of regulatory pressure and unilateral sanctions.
According to the head of Rosneft: “Energy as a global industry that plays a budget-forming role in many countries has become the first hostage to a one-sided political agenda, and there are signs of the spread of this disease to other industries. The only global regulator is not only not impartial, but also obviously serves only local interests. Therefore, to paraphrase President Trump’s notorious slogan (“Make America great again!”), I would like to appeal to the session’s participants to make the leitmotif of today's discussion and, maybe, even our common follow-up work, the slogan “Let us return the former greatness to the market” .
I. Sechin noted that today one can observe an increasing influence on the energy markets of changes in geopolitics. The main troublemaker is the current US administration. “We see that its actions are aimed at reformatting the global economic and political space, breaking down market interconnections and agreements formed over decades, and eliminating competition rules. Under the fire of sanctions and trade restrictions not only the so-called "outcasts", but also the traditional partners, that is, those who are considered allies of America. What are the reasons for this policy? I think they are connected with an awareness of the fundamental weakening of the role and capabilities of the United States of America in the world economy and politics, ”said Sechin. Back in 2000, the US superiority over China in terms of GDP was almost three-fold, but at the moment China is superior to the United States in terms of GDP in terms of purchasing power parity by almost 25%. By 2050, the superiority of China’s economy over the US will be twofold.
“In these conditions, the US is striving not only to accelerate its own economic development, but also to slow down the quantitative and qualitative growth of its main competitors, which is increasingly leading to America’s loss of moral leadership, as historically this country was one of the main ideologists of the open market and competition. It was the suppression of competitors that became the dominant economic and foreign policy of the United States, and the use of force to solve problems turned into a special American style of doing business, or, quoting a recent statement by the Deputy Minister of Foreign Affairs of China, Mr. Zhang Hanhui, in the style of "naked economic terrorism and chauvinism" - noted Sechin.
For our part, we should add that if we recall the expression of V.I. Lenin, he regarded the economic path of American capital as a "dynamite policy", no more and no less. Now the inventor of the Nobel dynamite was erected into an all-scientific deity, the prizes of which are worshiped by both scientists and intellectuals.
The head of Rosneft, deep into the energy structure, called the events a key challenge to the “global energy transformation”, implying the accelerated development of high-efficiency energy-saving technologies, as well as their adaptation to rapidly changing market needs (which, for example, will reduce the sulfur content in fuels 2020, by 2.6 times and emissions of sulfur compounds will be reduced by 5 million tons per year), geopolitical instability remains, which increases the risks of producing countries, especially , Due to the actions, policies and "tweets"
of the global regulator represented by the leader of the United States. “For the oil and gas industry, nothing but short-term, one-time price jerks create these comments on Twitter. In other words, the policy of the global regulator creates the uncertainty of the general vector of development and high volatility of the markets,” Sechin added.
In the past 25 years, the global economy has grown at around 3.5% per year, and relatively high growth rates are expected to continue - and this is the main factor driving energy consumption growth. The second important factor determining the level of energy consumption in the world is energy intensity. With the current price level of 60-70 dollars per barrel of oil and taking into account changes in the structure of GDP due to the rapid growth of the technology sector, the rate of decline in energy intensity of world GDP in the foreseeable future is unlikely to exceed 1.5-2.0% per year.
"With this in mind, we believe, and leading industry analysts agree with this that the demand for energy by 2040 will grow at a rate of about 1.5-2.0% per year," Sechin said. Of course, there will be changes in the structure of demand associated with the introduction of energy-saving technologies and commitments to reduce emissions, but on the whole, the dynamics are quite positive, determined primarily by the continuing growth of GDP and the rise in living standards of mankind in the coming decades.
Environmental requirements will lead to a reduction in the share of coal in the energy balance from the current 27% to 21%. However, coal will remain an important resource in the balance sheets of countries such as China and India, where its share even for the future will be weighty - at the level of 40-50%. Of course, alternative energy (mainly solar and wind) while maintaining the current regime of regulatory and fiscal incentives will grow at the fastest rate - more than 2% annually. However, the contribution of alternative energy to the global energy balance will remain relatively small, increasing from the current 12% to 16% by 2040.
In the absence of breakthrough solutions, gas, as the most environmentally friendly fossil fuel, will replace not only coal, but also nuclear energy, since a number of countries consider this area as potentially dangerous. “Natural gas, in contrast to alternative generation, can provide stable electricity production. Moreover, natural gas is a promising fuel for heavy-duty road transport and marine vessels. We expect an increase in gas demand from the transport sector by a factor of 5 by 2040. Therefore, gas demand will grow at the fastest pace among fossil fuels (at about 2% per year), which will lead to an increase in its share in the energy mix from 22% to 25% by 2040, ”said I. Sechin.
Also, the head of Rosneft in his speech addressed the topic of today's popular low-carbon development scenarios. “The most important component of the“ green ”scenarios is the topic of faster growth in the use of renewable energy sources. But these scenarios cannot be substantiated by either the observed trends in the dynamics of energy intensity, the available technological changes, or structural shifts in the global economy, ”Sechin said.
An illustrative example of the fact that landmark projects in the field of "new energy" have at least vague commercial prospects are electric vehicles. Igor Sechin talked about the phenomenon of their overvalued as early as June 2017, when Tesla’s share price was $ 340 per share. “Those who heard me then and sold the shares could make good money, because the current Tesla share price exceeds 200 dollars. But those of you who hear me today can earn more. There is a stereotype in public opinion that electric cars will easily “crush” the oil industry and their mass distribution is a matter of the near future ... I'm not talking about the fact that it is difficult to call environmentally friendly transport containing significant amounts of lithium and cobalt. No one today has an answer to the question of how to build a truly closed, complete cycle of the turnover of these metals in batteries, and much more is written about their exceptional harm to the environment than we can discuss today in our session. Taking into account the fact that electric cars do not solve either the problem of reducing emissions or the problem of hazardous production, in the foreseeable future, the share of electric cars in the global car park will not exceed 12-15%, which in terms of absolute values will be compensated by the growth of traditional transport in developing countries. ” told the head of the oil company.
But even so, the main factor behind the changes in the global energy markets, Sechin called the volume of US oil production. From this, ultimately, depends on the supply of liquid hydrocarbons in the world, the balance of supply and demand, oil prices, as well as the prices of all other energy resources. After all, oil as the largest component of commodity markets today, in fact, is central to the intersection of financial and commodity markets.
The head of "Rosneft" called Nesla global regulator represented by the leader of the United States. “For the oil and gas industry, nothing but short-term, one-time price jerks create these comments on Twitter. In other words, the policy of the global regulator creates the uncertainty of the general vector of development and high volatility of the markets, ”Sechin added. In the past 25 years, the global economy has grown at around 3.5% per year, and relatively high growth rates are expected to continue - and this is the main factor driving energy consumption growth. The second important factor determining the level of energy consumption in the world is energy intensity. With the current price level of 60-70 dollars per barrel of oil and taking into account changes in the structure of GDP due to the rapid growth of the technology sector, the rate of decline in energy intensity of world GDP in the foreseeable future is unlikely to exceed 1.5-2.0% per year. "With this in mind, we believe, and leading industry analysts agree with this that the demand for energy by 2040 will grow at a rate of about 1.5-2.0% per year," Sechin said. Of course, there will be changes in the structure of demand associated with the introduction of energy-saving technologies and commitments to reduce emissions, but on the whole, the dynamics are quite positive, determined primarily by the continuing growth of GDP and the rise in living standards of mankind in the coming decades. Environmental requirements will lead to a reduction in the share of coal in the energy balance from the current 27% to 21%. However, coal will remain an important resource in the balance sheets of countries such as China and India, where its share even for the future will be weighty - at the level of 40-50%. Of course, alternative energy (mainly solar and wind) while maintaining the current regime of regulatory and fiscal incentives will grow at the fastest rate - more than 2% annually. However, the contribution of alternative energy to the global energy balance will remain relatively small, increasing from the current 12% to 16% by 2040.
In the absence of breakthrough solutions, gas, as the most environmentally friendly fossil fuel, will replace not only coal, but also nuclear energy, since a number of countries consider this area as potentially dangerous. “Natural gas, in contrast to alternative generation, can provide stable electricity production. Moreover, natural gas is a promising fuel for heavy-duty road transport and marine vessels. We expect an increase in gas demand from the transport sector by a factor of 5 by 2040. Therefore, gas demand will grow at the fastest pace among fossil fuels (at about 2% per year), which will lead to an increase in its share in the energy mix from 22% to 25% by 2040,” said I. Sechin.
Also, the head of Rosneft in his speech addressed the topic of today's popular low-carbon development scenarios. “The most important component of the“ green ”scenarios is the topic of faster growth in the use of renewable energy sources. But these scenarios cannot be substantiated by either the observed trends in the dynamics of energy intensity, the available technological changes, or structural shifts in the global economy, Sechin said.
A fact that on the day when US President D. Trump proclaimed the Golden Era of American Energy, a bill was introduced in the US Senate that directly concerns the ban on the Nord Stream-2 gas pipeline.
“The indisputable fact of today's life is that the US uses energy as a political weapon. The introduction of sanctions or even the threat of their application has a destructive effect on the market ecosystem of world energy. The American “golden age” for all other market participants may turn out to be the century of energy colonialism. Should world’s energy consumers become hostages to the non-stop US election campaign? ”Said Sechin.
It should be recalled that already more than ten years ago we published work on the website of the AUCPB “Lenin electrification as a weapon of the world revolution of the proletariat”, where we showed the inevitable role of energy carriers as “the struggle of world powers for dominance both during peace and war (Stalin). Now at SPIEF'19 we see how the American “golden age” is, and no one argues with this, it has already turned into an era of energy colonialism. Ten years ago we gave a clear picture of how energy resources in the economic base of the country become the main parity of the monetary system and how difficult it was for Vladimir Ilyich Lenin to start the flywheel of electrification of the entire country, opening the way to communism.
Then Russia only came out of the crucible of the World War at the expense of the revolution of Great October Revolution, in order to develop and, by increasing labor productivity, develop the economic base of electrification, providing free housing, free education and medical care to the population. On the agenda was the question, after the victory in the Great Patriotic War, to ensure free supply of consumer goods to the population through a policy of lowering prices, which in such conditions of the rise in labor productivity decisively went to zero.
According to the head of Rosneft, the United States chooses those countries whose budgets are mainly formed from revenues from energy exports to put pressure on the oil and gas sector. In addition to the direct impact through sanctions, an indirect one is added - such countries are cut off from the support of the IMF, which thereby violates the principles of its work. After that, the leading persons of Russian politics started talking about the economic war.
And now one of the pillars of Russian capitalism in Russia speaks at SPIEF'19 about energy as a political weapon of US policy. His words are completely understandable to others and they have already started talking about the economic wars and terrorism of American capital. The conclusion again suggests itself: the Great October 2.0 is needed to end this imperialist war, before the war destroys all life on Earth.
A landmark point in the spread of the sanctions disease, according to Sechin, is the situation with one of the Chinese technology leaders, Huawei, which is under direct pressure through measures such as arresting the company's financial director, a ban on cooperation with American technology companies.
“I think that the Chinese colleagues have a sufficient set of tools for the backlash, therefore, the discussion in the media of the possibility of banning the export of rare earth metals from China to the United States as a response measure, perhaps not without reason. Such an impact mechanism would be very effective, since 80% of rare-earth metals are produced in China, ”said the head of Rosneft.
Igor Sechin noted that, despite the large number of new projects (more than 49), which were launched in 2018, the sanctions policy against countries such as Iran and Venezuela, as well as sectoral sanctions against Russian oil and gas companies led to that the total amount of liquid hydrocarbons subjected to unilateral restrictions, has reached about a third of world reserves. This is a kind of anti-record, which has never been in the history of the world economy.
“No one should have any illusions - the US sanctions pressure on Iran and Venezuela is aimed at destroying the economies of these countries and changing their sovereign leadership,” Sechin said.
Impunity of the US sanctions policy in the absence of a reaction from the world community contributes to its replication in other energy markets. According to the US Department of Energy, his efforts to develop gas exports "allow us to export American freedom molecules around the world," the head of Rosneft recalled. It should be added that the “molecules of American freedom” protect terrorist regimes, as we see in the example of Iraq, Libya, and Syria, where there are still centers of the Islamic state and related terrorist organizations. The US is approaching Iran, seeking to use a terrorist club against the economic base of electrifying this country, without fear of open military confrontation.
US behavior in the global energy market Sechin connects with the growth of oil production in Texas, where the main part of the Permian basin and the Eagle Ford basin are located. Production here has already reached 5 million barrels per day, exceeding the total production of Iran, Venezuela and Libya. That is, the "molecules of American freedom" turned into the bacilli of economic enslavement for the underdeveloped countries.
“This result was achieved not so much due to the implementation of shale projects, but rather due to the introduction of new sanctions, due to which production in Iran and Venezuela is sharply reduced. As a result, if in 2018 about 1.5 million barrels per day of world production was hit by the sanctions, this year this volume could increase to 2.5 million barrels per day, ”Sechin said.
According to him, further growth in oil production in Texas may require a "new sanction victim", which could be attacked by US sanctions in order to supply oil from Texas to the market instead. “And any mining country can become such a victim,” said the head of Rosneft.
Increasing US pressure on the global oil market would not have been possible without changing the status of the United States, which for the first time in a long time became an oil exporter. As Sechin said, since the lifting of the export ban at the end of 2015, which has been in effect for 40 years, the United States is rapidly increasing its oil exports: compared to 2015, it has increased 6 times and has already reached 2.7 million barrels / day that is comparable with the extraction of such countries as Brazil (2.7 million barrels per day), Kuwait (2.7), the United Arab Emirates. The geography of supplies is also expanding. If earlier only the nearest neighbors of the United States acquired American oil, now the number of importers has exceeded 40 countries.
“The active construction of the pipeline and port export infrastructure in the coming years will not only practically double the volume of oil exports from the United States to 5 million barrels per day, but also create a“ reserve ”for further production growth. Already in 2020, the United States will become a net exporter of oil, and in 2024, the capacity to export oil and petroleum products from the United States could reach 9 million barrels per day, ”said Sechin.
Taking into account external challenges and volatility, the effect of increased competition for investments is observed, primarily in terms of reducing the tax burden and creating various incentives. Igor Sechin called this the phenomenon of "competition tax regimes." He cited the example of the United States, where in recent years unprecedented measures have been taken to support the industry by reducing the tax burden and regulatory barriers. In particular, a reduction in the income tax (from 35% to 21%) allowed shale companies to significantly increase investment. In 2018, the industry, taking into account all tax breaks and improvements in the pricing environment, showed a small, but still positive free cash flow.
The Chinese authorities, in his words, in response to a slowdown in economic growth, have also begun to develop measures to stimulate the economy through targeted subsidies and tax cuts. In particular, the tax rate on shale gas extraction was reduced from 6% to 4.2%, and measures were taken to reduce taxes on oil futures operations on the Shanghai Energy Exchange. In 2019, VAT rates and social insurance rates were reduced, which, according to the Chinese authorities, should reduce the tax burden by about $ 300 billion this year.
Russia has multidirectional trends, said Sechin, the Russian regulator is balancing between the tasks of filling the budget and stimulating economic growth while at the same time finding a solution to social problems at the expense of the market. “I would like to express hope for a return to market forms of regulation and pricing principles in order to eliminate market imbalances,” he noted. But to solve this question, socialism is needed, and Sechin cannot talk about it.
Impunity of the US sanctions policy contributes to its replication, and “the US trade war with China is only the beginning of a long-term confrontation that will leave an imprint on the world economy,” said high-ranking representatives of the SPIEF'19.
The business breakfast, arranged by Sberbank the next morning on June 7, forced the Russian liberal government to talk about the painful ones, given I. Sechin’s previous style of performance. One presentation was remembered: “Business lives in a rental economy, in which the important condition is not productive labor, but the system of guards protecting the rent of newly formed feudal lords”, and “the real incomes of Russians have not been growing for several years.
National projects do not cause optimism among the domestic oligarchs: it is easiest for them to export raw materials to China and import finished goods into Russia. The most rabid liberals expressed the need to “pour money” on national projects, realizing how much more then it would be possible to collect from the “spilled by” financing of projects from the budget. There was also the fear that the lives of the owners of big money are balancing between their own housing in Lefortovo, i.e. in detention center. And this revelation only says that Russian business is constantly balancing on the verge of the criminal code, since it cannot do otherwise. Vaccination of the criminal world of the 90s makes itself felt all the time. On June 7, V. Putin spoke about the global liberal war, the war of all against all. This world in the performance of Russian capital is no different from Islamic terrorism, and American accounts have to pay others, including the Russian man in the street.
At the forum, it did not occur to any businessman to remember the deceived real estate investors and to try to find feasible help for them. This is not interesting for business and it will not repent, but it wants very much to repent from the laboring masses.
SPIEF'19 never reached the cosmic perspectives of mankind. Actually, modern monopolies are able to offer Ilona Mask as their space leader, whose figure, built in an electric car and launched a few years ago, is already floating in airless space, and the earthly manners I. Mask are in no way inferior to D. Trump’s distraught statements. On such an ideological base in an unexplored space, full of all sorts of dangers, only people with damaged psyche can express themselves.
For the penetration into space and the colonization of other planets, a completely different state of society is needed, which can only be called communism, in which people got rid of the monetary system as a narcotic addiction and can develop on the economic basis of electrification. Speaking the language of political economy, the Khrushchev-Brezhnev partocracy proved to be "the inability to continue the revolution of transition to the new economic way of life of all humanity based on energy as an advanced method of trade." (Andreeva N.A.). To work in space and on other planets, the language of the economy is needed, based on energy resources - an advanced method of commodity exchange, the path to which lies through communism. And this can be done only through the distribution of profits under socialism, which is simultaneously reducing prices and raising the living standards of the Army of Labor, which is why the base of energy costs becomes basic in the economy and naturally fits with the energy potentials of the Galaxy. Capital, with its law of individualism, is powerless to organize any broad onslaught on the study of its galactic space, poorly believing that there, in space, someone is able to rejoice in the green luster of the dollar.
SPIEF'19 has raised the rise in labor productivity at the pace of development of the digital economy, as if the prospects for a reduction in accountants are capable of solving such an important task. Today we only feel the need to drive the economy on the basis of energy consumption, since such a base redistributes profits in favor of the Army of Labor. But Capital's army fights for profit, ready to worship its god dollar and in this frenzy of love for the dollar is capable of destroying the whole world.
But, as PMIF'19 showed, the unipolar world is turning into a multipolar one. And this is the main thing that we managed to see at the St. Petersburg International Economic Forum.
Leningrad
June 2019
