G-8 Summit Begins July 15 in St. Petersburg

When I filled up my compact sedan this past weekend at the Getty station near my home, at – ouch! – 3.07 a gallon, I noticed an advertisement on the pump for a Lukoil credit card. I had not paid attention to this before, but Russian oil giant Lukoil owns the Getty name, and also several other brands in the Eastern United States. Those of us who live in the Washington, DC region no doubt have noticed a number of Lukoil direct-branded service stations popping up around the area.

Russia is rolling in profits not only from oil, but also from its natural gas reserves. And there is little doubt that Russian gas as part of nailing down a global energy security policy will be at the top of President Putin’s agenda at the G-8 Summit, which starts July 15 in St. Petersburg: http://en.g8russia.ru/

For the first time, Russia is head of the G8. This is an important position for any country to hold, but Russia’s chairmanship of this group is symbolic of the Russian Federation’s rising position and influence on world affairs. Those who think Russia is no longer important need to reconsider their views. While the G8 Summit agenda includes health, education, terrorism, and drug trafficking, energy will dominate the floor. Iran is also on the agenda, but in terms of nuclear energy and weapons control: before the G8 leaders gather, foreign ministers from France, Canada, Germany, Japan, Italy, Russia, Great Britain, and the United States will meet to discuss Iran’s nuclear program. Russia could play a pivotal role in this matter, because of its past working relationship with Iran, and because Russia is still proposing to build and operate an international nuclear fuel cycle center.

Russia remains a key player in the global nuclear energy and arms control scenes. Russia still has a large nuclear warhead arsenal. At the same time Russian natural gas – as well as oil – is finding an expanding global marketplace. The European Union and United States fear Russia using its energy reserves to leverage its political power. And with some good reason: The Duma recently voted to support the gigantic state-controlled Gazprom Company’s monopoly on all gas exports from Russia. Gazprom is intent on acquiring a bigger stake in Western energy markets. Gazprom accounts for some 25 percent of the world’s gas production, holds reserves of 30.4 trillion cubic meters of gas, and supplies a great deal of Central Europe’s gas requirements.

How the G8 Summit discussions on these and other matters proceed will be interesting to follow: Russia’s Western critics have repeatedly raised concerns over Putin’s apparent retreat from democracy, the lack of rule of law and transparency in business transactions, and the clampdown on freedom of the media. Russia will have increasing global political leverage as long as its economy continues to grow. Given the world’s seemingly endless and increasing hunger for energy, Russia may have a lot to say in the matter.

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