Prepared by Nino Arveladze
The corner stone of the world economy in the last quarter of 2006 was the democrats’ victory in the US off-year elections and decreasing ofdollar’s exchange rate against the major currencies
– along with the fate of the military operation that has reached its peak
– the democrats’ expected steps from the viewpoint of invigoration of the US economy
– the remaining strained situation around Iran that is supported by Russia, which supplied new missiles to it in late November and continues the construction of energy units
– encouraging indicator of economic growth in Europe
– a steady growth of the Chinese economy
– and the attempt of a quick settlement of the relations between Europe and Russia
– giving of the green light by the US to Russia’s entry into the WTO against the background of the intensified Russian energy expansion
– the boom of mergence of international exchanges and super corporations on the world market.
In spite of the OPEC forum and the significance of the forum held in Turkey at the end of the month, the relations between the EU and Russia are the most important issue. The EU is trying to contain the growing Russian energy aggression and persuade Russia to sign the Energy Charter. This attempt failed at the end of the month, which was largely contributed by Poland’s extremely principal position. However, Russia does not want to agree with Europe so easily and tie its hands on its path to annexation. On the contrary, it wants to keep Europe in permanent awe from the viewpoint of energy security. With this purpose, it is trying to set up a cartel with the Central Asia republics and step forward before Europe with a single approach concerning the price issue.
It is rapidly building a new “blue stream” gas pipeline to Italy that will bypass Bosporus and will reach Italy and Europe through the territory of Greece. It started the production of special 1200 diameter pipes according to the Norwegian technology at its metallurgical plants and is carrying out the construction works at both the northern and the mentioned southern gas pipeline by itself. Its primary purpose is that the gas pipeline would cross a minimal number of countries so that the pipelines going through Georgia, Poland or Ukraine should not become attractive.
Russia, which has accumulated a serious capital because of the high oil prices, is trying to raise its share in Europe’s gas supplies from 25% to 45% and be a monopolist as to not only the gas produced at its own fields, but also the one produced in the Central Asia basin. Europe and the West are trying to build an alternative transportation rout without Russia, but this project is developing at slower rates than the ones initiated by Russia and, besides, some European countries are trying to hold separate negotiations with Russia, which seriously plays into Russia’s hands and jeopardizes the energy security of not only Georgia, Poland, Ukraine and Baltic countries, but, first of all, that of Europe. Russia, which is a seriously undemocratic country, supplies the Iranian regime with missiles, supports Northern Korea, assassinates dissidents in England, persecutes free-thinking and media, whose main weapon is the use of power against both the people and countries, is now becoming the principal player on the energy market and trying to make Europe its partner on it.
Russia is not ashamed of imposing an economic blockade against separate countries, lobbies its imperial interests by using all methods – legal and illegal and its struggle for the world hegemony is entering the decisive phase – Russia has clearly shown to everyone that it threatens not only Georgia and that the keys to normalization of the relations between Georgia and Russia lie in Europe – if Europe manages to contain the Russian bear’s ambitions to become the world superpower at the expense of its monopoly for energy carriers, the relations between Russia and Georgia will resemble civilized ones, if not it will be difficult for Georgia alone to stop this imperial machine. It is time for Europe to support Poland and be stricter and more active in relation to Russia. This issue will be the cornerstone of the world economy in 2007.
NATO takes fright at Russia’s plans – Russia is setting up a gas cartel!
The advisors of the North Atlantic Alliance warn the military union that it should take measures for prevention of any attempts aimed at setting up of “natural gas OPEC” so that Russia should not be able to increase its influence on Europe.
In early November a confidential study of NATO’s experts, in which they warn against setting up by Russia of a gas cartel together with Algeria, Qatar, Central Asia countries and Iran, was sent out to the ambassadors of the 26 member-countries.
According to the statement of NATO’s council of economists, Russia is maliciously using the energy policy for its own political purposes, especially in relation to Georgia and Ukraine.
The Kremlin’s deputy spokesman Dmitri Peskov maintains that Russia is not trying to set up a gas cartel and that the authors of this view wrongly understand Russia’s energy security thesis. “Our main thesis is independence of producers and consumers. Only a madman can think that Russia is trying to blackmail Europe by gas, since we are dependent on European consumers”, – said Peskov.
Tensions between Europe and Russia over energy security continue.
Managers of energy companies say that the main threat of natural gas prices is lack of Russian investments as well as Moscow’s expected decisions to persuade other producers, for example Algeria, to cut investments.
Russia supplies 24% of European gas.
According to the information of the International Energy Agency, it is possible that major gas exporting countries may coordinate their investments and production with the purpose of avoiding of overproduction and retaining of high prices. EU’s foreign ministers have not reached an agreement with Poland concerning the Russian pipeline, the search for a more solid position for subsequent negotiations with Moscow continues.
At the EU summit that was held last month Javier Solana said that Algeria had not given foreign investments an opportunity of purchasing a share of capital because of the deal between Russia and Algeria.
Such major natural gas exporting countries as Qatar, Norway and Nigeria do not support the idea of joining into a cartel.
Analysts believe that Gazprom is strongly dependent on Europe since the domestic gas price in Russia is high and, for the time being, there is no other market in sight.
Poland has blocked the agreement between the EU and Russia
Poland has vetoed the EU’s aspiration for partnership with Russia.
At the negotiations held in Brussels the EU’s foreign ministers wanted to agree upon the issues related to energetics, trade and protection of human rights at the summit planned for 24 November, in which Russian President Vladimir Putin took part.
It became known even before the negotiations that, in case continuation of the Russian embargo on Polish meat and vegetables, Poland threatened to block this document. Besides, Warsaw wants Moscow to join the Energy Charter. Polish Foreign Minister Ana Fotyga said after the Brussels summit that Poland would not give in until it got a clear political signal from Russia. However, the minister did not explain what Poland considers as “a clear political signal”, but she said that she was “cautiously optimistic” about the chances of ending the deadlock. “We hope that we shall be able to work out a common position before the EU-Russia summit”, – they said in the EU.
Currently a quarter of oil and gas being consumed in Europe falls on Russia and experts believe that this indicator will rise in future.
For a long time the EU has been trying to make Russia join the International Energy Charter, but Moscow refuses to do it. Finally this refusal will affect the negotiations that have to do with foreign companies’ entry to the energy market.
EU’s foreign ministers introduced many principles to the Energy Charter that are intended for Russia. It envisages giving up of Moscow’s discrimination of the EU member-countries and a long-term economic partnership between the parties.
In the recent period Russian representatives unambiguously declared that they are ready to increase oil and gas export to Asia. As a result, Europe started talking about the stability of energy supplies from Russia.
It became known after the publication of the forecasts of the international consulting firm Control Risks that in 2007 Russia will not change its course in relation to natural resources and continue the state control over them, which turns Russian energy carriers into “an effective political weapon”.
As to the Polish agricultural produce, they say in Russia that they will allow its importing only after Polish veterinary services impose order in the system of control over food products.
Gazprom – a violin of the Russian economy and a sword for the world hegemony
Energy security represents Russia’s main subject in G8. Russia is trying to recover the status of a “great power” at the expense of energetics.
Gazprom is Russia’s largest and real monopoly that possesses the biggest natural gas reserves in the world. According to the data, Gazprom’s share in the world’s natural gas reserves is 16%, and in Russia – almost 60%. The current reserves of the Russian monopolist are valued at 84 billion USD.
We can call Gazprom an empire within Russia, it provides for a fifth part of the Russian budget’s incomes. Gazprom is the incarnated ambition of the Kremlin.
Political analyst of “Aton” company Michael Hit says that Russia’s place in the world and its economic development depend on oil and gas. At the same time, Russia’s ability to influence the world and show it its political power is also dependent on natural resources.
Gazprom has a principal importance in achieving of the mentioned goals. Whatever tasks are given to the concern, the Kremlin needs it in a good sporting condition. That is why liberalization of shares is implemented, foreign capital is invested and the company’s transparency is increased. However, it must be said that most of the decisions aimed at improving of Gazprom’s tonus remain at the level of declarations. It is still beyond this Goliath’s power to free itself from the nonspecialized assets, and its media empire is a vivid example of that.
The Chairman of the Economic Policy Committee of the Russian Duma – Valeri Droganov says that the monopolist has practically everything besides natural gas. For a decade it has been trying to purchase everything and has been making investments in Europe. Gazprom also has assets in other spheres that are not related to its basic activities. The chairman of the committee believes that the number of this kind of affiliate companies and nonspecialized shares makes up several thousand. The decision on a gradual freeing of Gazprom from its nonspecialized assets was made as yearly as in 2003.
If you want to see with your own eyes how this giant company lives, it is enough to look through the notice board on its web site where you will come across the announcements concerning the purchase of helicopters and several planes.
Gazprom represents an effective instrument for the state. However, it is questionable whether this instrument has an economic or political load.
Valeri Droganov is convinced that this instrument is important for the state’s economic policy. He believes that the world’s trust towards Russia and the country’s image are fully dependant on what kind of violin Gazprom will be – political or economic one. According to Mr. Droganov’s statements, Gazprom will be an economic violin.
The giant company is experiencing the influence of the state administration’s control. There are Russian ministers in its Board of Directors, while the First Vice-Premier Dmitri Medvedev is its Chairman. The company is considered as Vladimir Putin’s place of employment after 2008, but the President says that he will not switch to business.
By the way, according to a well-known expert in the energy sphere – Mikhail Krutikhin, Gazprom is not a business organization in pure form and is strongly politicized. The company’s decisions, which are always given a commercial justification, are made by the political leadership.
Michael Hit also shares this opinion and says that the West becomes increasingly dependent on Russian energy carriers, while Putin wants Russia’s integration in Europe, but, at the same time, he does not want to see Europe being independent from the US. Thus, he uses energy carriers in order to play an important part in Europe’s politics.
They started to intensively talk about Russia’s use of energy carriers as a political weapon after Russia raised the natural gas price for Ukraine. The Georgian authorities bring a similar accusation against Russia. However, Russia denies these allegations.
Many people in the West already compare natural resources with the Soviet nuclear weapons. At a press-conference a French journalist asked Vladimir Putin a question concerning Russia’s use of energy carriers as a weapon for achieving its political goals. The answer of the Russian President was direct and self-assured: “First of all, we still have a sufficient number of missiles. As to energy carriers, we do not infringe upon the interests of the former Soviet republics – we put all of them in equal conditions and think that it is fair. At the same time, I believe that any talk of the new energy weapon is irrelevant and groundless.”
Meanwhile, the talk of the Russian gas and the dependence on it continues in the West. At the beginning of the current year a brief, but significant for Europeans, loss of gas supply became a subject for discussion in G8 that was held under the slogan of “energy security”.
In the present day world, when separation of economy from politics is a difficult task, for some Gazprom’s slogan about the great number of Russia’s victories sounds like music, but for others – like a somber warning.
One thing is clear, from 2007 the price of gas will range from 230 to 300 USD and, according to the experts, from 2008 it will rise by 20%, which means that price of gas in Georgia will be 42-47 m3.
the new world order
Russia and the US are accomplishing the negotiations concerning the WTO
In mid November the US signed the bilateral protocol containing the provisions for Russia’s admission to the World Trade Organization. The next stage will include multilateral negotiations and, according to Mr. German Gref, it is expected that the negotiations will be finalized in next July. As we can see, Russia’s entry into the WTO will not take place in the near future, but this fact will have a heterogeneous and strong effect on the country’s economy.
By this stage Russia has completed negotiations with all WTO countries, it only needs a confirmation of the consent of Georgia and Moldova. Then multilateral negotiations will start, the completion of which is expected in the summer of 2007. According German Gref’s appraisal, the US Congress will not take into account the Jackson-Vanik amendment and, according to the WTO rules, confer a standard trade status to Russia since, in the first place, it is American companies that are interested in this issue. Otherwise they wil not be able to make use of the advantages that will be conferred to Russia by other member-countries. After joining the WTO Russia will reduce tariffs on a number of goods. They will be reduced for the produce of the industrial sector and agriculture by 3% on average. Besides, Russia retained quotas on meat till 2009 and as for the subsidies to the agriculture, German Gref says that they will be discussed at the multilateral negotiations. During the negotiations Russia was strongly standing up for the positions of the agriculture and veterinary control.
As a result of the negotiations with the US, during the period of 7 years after joining the WTO Russia will reduce import duties on foreign cars from 20% to 15%, and on helicopters – from 20% to 10%. German Gref pointed out that, during the negotiations with the US, Russia has not assumed any obligations that exceed the bounds of the general requirements. For example, in spite of the US’s wish, Russia will not cancel the import duty on aerotechnics.
Russia has made concessions from the viewpoint of the financial market’s accessibility to foreigners, it will be possible to open subsidiaries of foreign insurance companies in the country (but only after 9 years). The 50% quota for foreign capital in Russian banks is an unexpected one, though Russia was trying to reduce it to 25%. For the present moment there is no share of foreign capital in the Russian banking sector, but in reality it is less than 12%. Thus, in the coming years the increase of foreign capital’s share in the Russian banking sector is expected, though must be said that the entry of western financial institutions to the market will be a positive phenomenon for the customers, since the quality indicator will rise and bank products will become more available, but there is a threat from the viewpoint of the state control over the national banking system. That is why they have adopted the law, according to which the Central Bank will have complete information on the owners of 10% of shares, by means of which they are trying to monitor foreigners and control changes in the banking system.
Thanks to joining the World Trade Organization, the exporting companies that constantly found themselves in a difficult situation because of the antidumping measures on the part of the organization’s member-countries (this, first of all, applies to metallurgical companies) are considered as potential beneficiaries. Besides, as a result of joining the WTO, in theory trade barriers should be lifted and foreign goods will become available for the domestic market, from which consumers should benefit.
However, Russia’s entry into the World Trade Organization has not only positive aspects, since importing of foreign goods to the Russian market may cause problems to the local producers. Machine-building, aircraft building, agriculture, food industry, light industry and pharmaceutical industry fall under the risk group.
Georgia will not admit Russia to the WTO?
The Georgian Foreign Ministry and Economic Development Ministry officially declared that Georgia will impede Russia’s entry into the WTO. The Georgians demand legalization of the two illegal custom houses in Abkhazia and South Ossetia. The Georgians came out with the mentioned demand in 2004, during the period of negotiations with Russia concerning the WTO, but it was first time when the Georgian Foreign Ministry and Economic Development Ministry officially declared it. However, it was not a piece of news for Russia, since the Georgians unofficially stated this position to the Russians during the US – Russia negotiations in Hanoi. According to the WTO rules, all new members of the organization should hold bilateral negotiations with the organization’s member-countries, as a result of which the beginning of multilateral negotiations becomes possible.
Georgia became a member of the WTO on 14 January 2000, the organization has 149 member-countries. Russia has been trying to join the organization since 1994.
However, Georgia declares that it is interested in Russia’s membership in the WTO, since in this case Russia’s trade policy will approach the international norms and standards.
The Georgian President Mikheil Saakashvili declares that he will not allow Russia’s unconditional entry into the WTO and that Georgia will make no concessions. The Georgian parliament agrees with the President and, thus, the problem has acquired an “official status”.
The former adviser to the Russian President Andrei Illarionov is not sure that Russia will get the support of other members of the organization. Russia is trying to join the WTO against the background of the undeclared trade war against Georgia and Moldova.
Noteworthy is the Polish example, it is in the state of a trade war with Russia and in October it blocked the agreement between Russia and the EU.
The new world
Ukraine expresses its “doubts” that it is being punished because of the “Orange Revolution” and its pro-western policy.
This year’s conflict demonstrates the shadow of the new world order irrespective of the real reasons. Energy resources become a source of potential conflicts.
There is nothing strange that energy carriers become a cause of world conflicts and wars. In 1941 the US decided to limit Japan’s oil export because of Tokyo’s aggression against China, which was followed by the Pearl Harbor attack. The coup in Iran organized by the US and Great Britain in 1953 is, to a certain extent, related to oil. The West’s interest to the Arab world was also explained by the concern about the stability of oil supplies.
The classified materials discovered in the British archive show us that in 1973 the US worked out the plan of taking hold of oil fields in Saudi Arabia, Kuwait and Abu Dhabi in response to the oil embargo in the Arab countries. Stability of energy suppliers turned into an important issue a decade ago.
However, oil reserves will only last for several decades and, correspondingly, new problems will not be long in coming.
Chinese economic growth
An active economic growth in China, India and other countries arouses the interest towards the remaining oil reserves. China’s demand for oil already has an effect on its foreign policy. Say, China takes oil from Sudan – then anyone wishing to impose sanctions against Sudan will have to consider China’s position as well; the same applies to Iran.
According to the data of the European Commission, in 2020 two thirds of the EU’s demand for energy resources and 75% – for natural gas will fall on the import.
It is no wonder why the EU considers the tensions between Russia and Ukraine as an alarming phenomenon. For the same reason the world’s unexplored places attract attention. Thawing of ice is actively taking place in the Arctic and, correspondingly, “black gold” and other minerals become accessible.
Territorial claims appear, borders are established and relations become strained.
In 1996, at the request of the British leadership, Prince Charles visited the former Soviet republics of Central Asia: Turkmenistan, Uzbekistan and Kazakhstan. All of them are rich in energy resources – oil or gas.
The Prince also visited Kyrgyzstan that is not remarkable for anything special, but still he paid a call to the asylum for elderly war veterans. He did not like this trip (however, the remains of the Great Silk Road impressed him) but that was not important. Diplomacy and energetics – that is what was important.
Currently Britain’s oil production in the North Sea is not what it used to be. Algerian and Venezuelan ships loaded with natural gas will soon appear in British ports, you will easily understand it by the course of British diplomacy.
They have a different view of nuclear energy as well. Uranium is produced in Kazakhstan and Australia in large quantities, and they will be able to have a lot of friends if they develop this field of energetics. The discussion on the mentioned issue enters a new phase in Great Britain, but in France it was over 30 years ago. 80% of energy carriers being consumed in France falls on nuclear energy. By this step Paris diminished the threat of oil embargo.
Energy black hole: does a new crisis threaten the planet?
(probably it is early to speak about the energy crisis)
If we take a look at the language used by energy experts, we shall see that they often use such phrases as “serious anxiety” and “important issue”. Proceeding from this, we can conclude that the energy issue is becoming increasingly important for the present-day world.
Experts mention the following reasons for anxiety:
– The level of utilization of any energy sources is rising;
– The reserves of the main energy carriers – oil and gas are diminishing;
– After the climate change it becomes clear that during the next 20 years the world countries should reduce contamination with the gas having a negative impact on the atmosphere;
– The planet’s population is growing and the level of energy resources’ consumption is growing along with it.
Among the mentioned reasons for agitation are the rates of economic growth that is associated with energy consumption like a horse with a phaeton. However, this phaeton cannot move forward all the time, at some moment it will find itself in a dead end – fuel will either run short or inconceivably rise in price. The climate may also change drastically.
Immediately there arises a question – when will it happen and whether people have enough time to turn off this path?
In the event that such opportunity exists, we should not forget that its finding is neither easy nor cheap. It should be pointed out that all energy sources have a negative side as well, it is not worth hoping for the panacea.
According to the data of the International Energy Agency, by 2030 energy consumption in the world will in crease by 50-60%. In case of invariability of other factors, this consumption will mainly fall on organic fuel, which is still most convenient and available.
It can be said that in the recent period oil reserves are diminishing because of the increased demand and political instability in the producing countries, in view of which the oil price is constantly rising.
Of course, there is enough oil on the planet and evaluation of fuel reserves is not notable for accuracy.
The reserves of natural gas, which is considered as the best fuel electric power stations, are diminishing as well. Besides, in the West they are afraid of political tensions in Russia and Middle East.
There is still plenty of Industrial Revolution’s fuel – coal, but there is a problem here too. Comparatively more harmful gases are isolated in its combustion. Proceeding from the fact that coal is cheap and easily accessible, there are sufficient reserves of it on the planet. The International Energy Agency is expecting a 50% growth of harmful gases’ emissions by 2030, while climatologists say that a 50% reduction of their emissions is necessary with the purpose of avoiding hazardous climate changes.
It is absolutely clear that economic and environmental “horses” are dragging the humankind into different directions.
One can rarely meet a person ho would give up the achievements of the modern civilization. Moreover, in settling of the climate change problem, it seems to us that he has no desire of doing it. It took many years for the Kyoto Protocol concluded in 1997 to come into effect. There appeared its alternative – Asia-Pacific Agreement, the participants of which believe that it is possible to solve the problem by means of modern technologies.
In the recent past the signatories to this agreement assented to the forecast made for 2050 – by that time the economic growth will double and, correspondingly, the consumption of coal and other fuels will double as well.
Fuel is rising in price along with decreasing of its reserves, that is why other types of fuel are becoming relevant now – first of all, nuclear energy.
According to the data of the International Atomic Energy Agency, 440 commercial nuclear reactors work in the world now and 16% of them are generating electric power. In such countries as China and India, nuclear energy is the most important source of electric power. Other countries, such as Germany, also choose nuclear energy.
The subject of the analysts’ dispute is uranium – when the time of its deficit on the planet will come. Some of them believe that this subject will not be relevant for tens of decades, but the mentioned term will be exceeded if reactors of other type are introduced. However, their enabling is also related to many problems.
There is another technology – a thermonuclear reaction, to which high hopes are pinned, though even its selfless supporters admit that it will become available only in several decades.
Wind, waves and sunlight
A large part of energy being consumed on the planet falls on the sun. The sun rules the wind and water cycles, showers the mountains and gives an opportunity of creating hydroelectric power stations. Without it there would not be either coal or oil, which we are using for our needs with a great zeal.
Maybe the time has come for us to use solar energy directly? Of course, it is possible to do it, but implementation of this project is five times more expensive than oil and gas production. It is clear that this idea is not worth implementing in the near future.
The humankind can also obtain energy from other sources, such as wind, tide and wave, but the potential of these technologies is limited, since the mentioned sources cannot constantly generate energy. High hopes are also pinned to hydrogen, but it only gives an opportunity of power transferring.
The world and nuclear energy
Two events that took place at the beginning of the year increased the world’s interest to nuclear energy still more. In view of the gas dispute between Russia and Ukraine, the consuming countries started to think about looking for an alternative, but the nuclear energy issue was raised to the climax by Iran.
We have got used to fluctuations in oil and natural gas prices, that is why for most people it will be a revelation that these two types of fuel are not in the first place in the rating of the world’s energy sources. It has been a long time since only 10-15% of the consumption fall on them. The 16% share of atomic energy holds the third place after coal (39%) and hydrogenation (19%).
Redistribution of forces on the world market
Currently 440 nuclear reactors in 31 countries generate 370 gegawatts of electric power. This by almost two times exceeds the amount of electric and heat energy being generated in Russia. 56 countries have research reactors and it is officially believed that only eight countries (the US, Russia, Great Britain, France, China, India, Pakistan and North Korea) possess nuclear weapons.
Israel also has nuclear weapons, but the Jewish state does not comment on this subject.
Currently Lithuania is the most “nuclear: country: 80% of energy produced in it falls on nuclear energy. France is considered as an acknowledged leader of the industry being the main exporter of nuclear energy.
The major players on the natural uranium market are Canada, Australia, South Africa and Kazakhstan. Russia practically does not produce uranium, but the leaders in uranium enrichment are: Russian “Tekhnabexport”, American USEC, French AREVA and English-German Urenco. Russia holds the fifth place on the market of fuel elements for reactors.
Maybe we should take a close look at the atom?
Alternatives for oil and natural gas are only remembered in case of their high prices or hold-ups in their supplies.
That is why when supplies of Russian gas through Ukraine were limited they started to talk about nuclear energy as a remedy for gaining independence from Russia. Even Belarus started the talk about the necessity of construction of a nuclear power station. Great Britain was also planning to develop nuclear energy before the Russian demarche, but against the background of Gazprom’s latest statements that it is going to occupy 20% of the British gas market by 2015, the officials may accelerate this issue. For the time being, Germany, which is the main purchaser of the Russian gas, also displays a firm position. The situation in Switzerland is much more complex. In 1997 the country adopted the act, which envisaged compensations to the owners of such stations in case of their closing down. Since then the state and the companies found themselves in a contradictory situation, but, in spite of it, in 2005 the state closed down one of the reactors.
Dubious safety of nuclear energy and the threat of proliferation of nuclear weapons are cited as the main arguments against it.
Turmoil around the atom
Finland is going to extend its abilities from this point of view. Switzerland, Spain and the US have similar plans.
At the expense of reconstruction of old reactors and building of new ones, by 2020 Russia is planning to increase the capacities by two and a half times, i.e. to 50 gegawatts. South Korea and China are planning to build eight new reactors, while Japan will built 12 ones. Vietnam is planning to build the first reactor. Egypt and Turkey have already chosen the site for the construction of the station, but Turkey has put off the project for an uncertain period.
According to the data of the International Atomic Energy Agency, within the period of 10 years developing Asia will rise its share on the nuclear energy market from 5 to 8%.
The cost of the issue
Economic cost of nuclear power stations depends on the amount of produced fuel in a country. For example, there is no nuclear power station in Australia since the country is rich in coal and does not need it. However, the issue is presented in a different light when, as a result of coal’s burning, the matter concerns pollution of the atmosphere. This subject is the most important trump for the supporters of nuclear energy. The cost of electric power generated by means of traditional methods is higher than in the case of nuclear energy. According to the data of the International Atomic Energy Agency, the cost of 1 megawatt of electric power generated by means of nuclear fuel makes up 21-31 USD, coal – 25-30 USD, natural gas – 37-60 USD. However, construction of nuclear power stations is related to big expenses, but the International Atomic Energy Association maintains that the expenses related to construction of similar stations have been sharply reduced in the recent period thanks to standardization of the design, new technologies and reduction of the time necessary for construction.
What should we expect from the atom?
As it can be seen, in spite of the tragic Chernobyl disaster, the future of energetics is associated with the development of nuclear energy.
The results of the survey conducted by Deloitte & Touche company show us that 62% of the British population set hopes for the development of nuclear energy, and 80% of the Swedes share this opinion. According to the calculations of the International Atomic Energy Agency, by 2030 the world’s countries will spend 200 billion USD on the development of nuclear energetics, but IAEA believes that by 2020 17% of the energy consumed in the world will fall on nuclear energy. Last year the mentioned company published a report saying that the results of Chernobyl disaster were exaggerated and, according to the specialists’ opinion, the death toll because of the disaster could exceed 4 000, and the radiation control zone should be reduced. Corruption and the problem of security in former Soviet countries were mentioned in the report as more perilous factors than radiation.
However, ecologists and the organizations protecting the interests of the people that suffered because of the Chernobyl disaster categorically disagree with this opinion.