But the age of oil will one day draw to a close. How is Russia preparing for the time after cheap oil or, indeed, after oil? Putin offers an optimistic perspective: ‘We are working on hydrogen energy. In the medium term we will invest massively. Moreover, we shall continue to develop nuclear energy. Today sixteen per cent of our needs is covered by nuclear energy. In the next fifteen to twenty years this will rise to twenty and perhaps twenty-five per cent. Renewable energy sources like solar power are not particularly effective, not only because of our climate. A vast potential is still in hydroelectric power, although much less than China can tap. We believe in diversification.’
Is Russia aiming to be an energy superpower? And what is the meaning of energy security – the key item on the G8 agenda? Putin rejects the term superpower. It smacks of the Cold War era. But only recently his minister for energy espoused Russia’s strategic objective to be a superpower in the energy field. Putin distances himself from unwise rhetoric: ‘I have never said that Russia is or should be an energy superpower.’ He leaves it to the audience to decide what is fact and what is politically correct modesty or, perhaps, maskirovka. He mentions Russia’s vast resources in Siberia, oil for more than three decades, the most voluminous gas fields of the world. But he recognizes the risk that Russia remains caught in the role of the purveyor of raw materials. He knows about what the West calls the oil curse: the rule that riches make you lazy. The energy wealth of Siberia, he insists, will have to be used not so much for happy consumption but for the creation of a future science-based economy.
Energy, he points out, is ‘the national wealth. We have to use it in a responsible way.’ What he means is responsibility towards future generations but also, he hastens to add, towards the world community. Coming back to energy security, he points out that it has two aspects: supply and demand. ‘The West needs security of supply, Russia security of demand.’ At the G8 Russian expectations, he says, were disappointed. But sooner or later there would be consensus. In the realm of high technology Russia feels excluded, especially by the United States. France wants to sell its nuclear energy. But: ‘We want relations on the basis of equality.’ Meanwhile, Russia’s lines of development are pointing not only West but also East. The new technologies for liquefied natural gas make new markets accessible, independent of pipelines.
Where will Russia be in ten years’ time? ‘Economic power is shifting from the Atlantic to the Pacific. Growth in those parts of the world is impressive and will not soon come to an end. Russia, as a littoral state of the Pacific Ocean, enjoys natural advantages. We would like to settle each and every conflict still extant.’ That sounds like an opening to Japan? Putin prides himself for having consolidated the old uncertainty about borders with China. Why should that not serve as a model for the territorial disputes with Japan, especially over the Kuril Islands? With China, Russia has reached a state of cooperation as never before. ‘Even when in Soviet times we sang of eternal brotherly love there remained deep mistrust.’ Today there are overriding concerns, from timber production to space technology. There is also military-industrial cooperation. But energy is at the centre. Today’s 3 per cent of Russian exports go to China, Putin points out. This should rise within ten years to an ambitious – and strategic – 30 per cent. The West, in other words, will feel Chinese competition where so far the market has been almost exclusively oriented towards Western consumers. Hard times ahead, rising prices, more leverage for Russia. But it is not only natural gas that reshapes the Russo-Chinese relationship in the Far East. The first oil pipeline is under construction, bypassing Lake Baikal, soon to reach the Chinese border. The demands of the environment, he assured Western concerns, would be safeguarded. Explorations for a second, parallel pipeline had just begun in Eastern Siberia.
Is there, between Russia and China, something akin to a hidden agenda? The answer is no, he insists. ‘In Asia there is a complex correlation of forces, and Russia is seeking a responsible role.’ Would this include UN sanctions against Iran because of nuclear concerns? Is Russia against Iranian uranium enrichment, and would Putin, if necessary, support at least mild sanctions by the UN Security Council against Iran? Putin does not hesitate for a moment. ‘It is very difficult to control from outside the point where permitted low-grade enrichment for civilian use transcends into weapons-grade enrichment for military use. Even the burnt-out nuclear rods are potentially weapons-capable.’ Altogether Iran presented an exceptional problem. ‘Yes, they have the right to modern technology. But in the constitution they have declared annihilation of another country the overriding objective. Moreover, in the Greater Middle East extreme caution and self-discipline are to be advised. As far as sanctions are concerned, we will, together with our five partners – US, UK, France, China, Germany – consider the question, talk to the Iranians and then, possibly, decide on mild sanctions. First and foremost you have to avoid confrontation… In this context we demand from our Iranian partners to stop uranium enrichment.’ He calls Iran a ‘partner’ while usually he likes to speak of ‘friends’. Then he points at Russia’s offer from last January, indeed sold as the Putin initiative, to take care of enrichment and processing of used nuclear fuel within Russia, on behalf of threshold countries like Iran but beyond their control.
What does he think about the European Union? In Soviet times, the Kremlin largely ignored European integration, believing that capitalist countries would sooner or later be at each others’ throats. Shared sovereignty? This was certainly not for the Russians, trying to keep their vast land holdings together. As far as Europe’s uneasy Union is concerned, Putin remains ambivalent. Can Russia cooperate with Brussels to master international conflict? It is not easy, Putin answers, ‘to conduct political dialogue with the EU as long as it is structured as it is, weak and indeterminate’. Putin does not quote Henry Kissinger’s famous quip asking for the European telephone number. But he is similarly critical. The presidency, changing every six months, is not a force for continuity and predictability. For Russia, he muses, ‘this could also be of tactical advantage. But in fact we have never tried to play the game of divide and rule. A strong Europe would be to the advantage of world order.’ Meanwhile, the Europeans should keep out of the conflicts within the post-Soviet space: Nagorno-Karabakh, South Ossetia, Transnistria: ‘It would be a major mistake,’ he warns, ‘to disregard the resolutions of the UN Security Council.’ But what about Kosovo, Serbia’s uneasy province? Putin at that stage tried to avoid committing himself to more than general unease about what he called ‘uncontrolled and uncontrollable developments’, once independence from Serbia has been stated. For Serbia, too, any future settlement would have to be acceptable. If this was advice to the West then it meant that no unilateral solution would be acceptable. Russia had not forgotten that the 1999 Kosovo war had been conducted by NATO against the advice from Russia. That this was still seen as a humiliation calling for redress.