Senior security official: rising shale oil, gas production a threat to Russia

MOSCOW. Dec 26 (Interfax) – Growing production of shale oil and gas poses a significant risk to Russia’s economic security, the secretary of Russia’s Security Council has claimed.

“Having increased its production of shale gas, the United States has reduced its imports of liquefied natural gas. So its exporters have switched over to Europe. In addition, in 2012 the United States increased exports of coal that was getting unused when coal was replaced by gas in electricity generation. As a result, gas exports from Russia to European countries fell noticeably in 2012,” Patrushev said in an interview with Russian government daily Rossiyskaya Gazeta a transcript of which is due to appear in Friday’s issue of the paper.

Patrushev also said competition in the European and Chinese oil markets would become more intense between 2016 and 2020. “In the natural gas market, competition, which has become more intense, may get more so after 2020 as a result of the industrial use of the technology for the production of subsea gas hydrates. Unless principal Russia oil and has producers change their inert policies, these developments may lead to losses of tens of billions of dollars. This is a direct threat to the economic security of the country,” he said.

He made the reservation, however, that there exist mutually contradictory long-term forecasts for global oil and gas markets. For example, there are allegations that agitation over the rise in shale oil and gas production is a scheme to serve the interests of the United States and Canada, he said.

“The task is clear. On the one hand, a goal is set to weaken the negotiation positions of hydrocarbon exporting companies, and, on the other, get back funds invested in developing shale deposits through large-scale sales of technology for the production of shale oil and gas,” Patrushev said.

He argued that structural reforms in Russia’s economy would be the most effective ways to eliminate the alleged threats he was speaking about.

“Moreover, our oil and gas companies should work more effectively,” he said.