ABSTRACT
From the early 2000s, the proposition that the demand for hydrocarbons, as well as their price, would rise indefinitely had acquired in Russia the convincing power of not only a winning business strategy but also a dominant political philosophy. Then came the shocking collapse of prices and demand in the second half of 2008 that undermined this philosophy of ‘energy superpower’ – but adjustments in energy policy have been marginal and reluctant. This process of internalizing undesirable changes has been impeded by unwillingness to contemplate what a possible end to petro-prosperity might mean for the durability of the existing political system, based as it has been on an unwritten social contract for ever-increasing rewards, and supported by climbing oil prices (Makarkin, 2011). The gradual recovery of oil prices to the plateau of USD 100–120 per barrel by mid-2011 (Brent crude benchmark) could not compensate for the populist over-spending of the 2011/2012 election cycle, leaving Russia highly vulnerable to new shocks (Aleksashenko, 2012; Guriev and Tsyvinski, 2010). Energy policy, in the meantime, has remained focused on mega-projects aimed at securing significant increases in the production and export of oil and natural gas. The goals of that policy were outlined in the 2009 Energy Strategy until 2030 (Russian Government, 2009) but that document was fast overtaken by events, and no new guidelines have been issued; even Putin had very little to say about the energy prospects in his ‘visionary’ articles published in the course of the election campaign (Putin, 2012).
