Climate agenda is cynicism, hypocrisy, but Russia needs to extract oil and gas sooner without raising taxes - Energy Ministry
TYUMEN. Sept 23 (Interfax) - The climate agenda actively promoted by developed countries is cynicism and hypocrisy as they tolerate production of polluting industries outside their borders, but Russia needs to hurry and make every effort to monetize the fossil fuels it has without increasing the tax burden, Deputy Energy Minister Pavel Sorokin said.
"The topic [of the hydrocarbon tax which the European Union want to introduce] is in fact very relevant, highly important, but unfortunately when you hear 'the climate agenda', the first thing that comes to mind, the first association, and today we see examples of this, is cynicism and hypocrisy," Sorokin said during the Tyumen Oil Forum.
"We need to approach the topic realistically here. It is very easy to argue, very easy to dictate conditions when you're an issuer of essentially free money and can drag out any, absolutely economically unfounded, project for an endlessly long time," he said, recalling the EU's subsidizing of renewable energy resources.
"This is the reality we have been living in today essentially since 2008 though, and to deny this is probably just stupid. I'd like people to call things by their names. Many countries want to develop industrially, and not only people living in the United States, the European Union, and Japan want to live well. One and a half billion Chinese people, India, Africa, Latin America also want to live well, and we are among the people who want to have development too, and we have the potential for that, that is, there have already been examples about the absorption capacity of forests and about APG [associated petroleum gas]," Sorokin said.
However, he said, the topic of utilizing APG, which was previously burned in large quantities, developed not for climate reasons but because this is a highly valuable resource for petrochemicals, "which has risen on this accordingly."
"Now, a slightly different topic is under way, that is, if we impose additional taxes on our industry, which still isn't a world leader now, then this could turn out to be a very large burden. That is, not only do we have very high financing rates for all projects, our tax system in the hydrocarbon segment taxes hydrocarbon production fairly heavily," he said.
"We should understand that if hydrocarbons still have time left when they are still going to have rent, 30-40 years, then we have to understand that in order for these resources not to stay in the ground we must make every effort now to extract them, in order to send this forth for the good of the economy, so that the investment resource and rent that exists is used, the same as with associated gas at its time," Sorokin said.
"Therefore, we should be very careful here on the one hand, understanding the inevitability of climate regulation throughout the whole world and that we will have to work with this, and we also need to get the maximum benefit for our industry - all our actions should be directed not at blindly following the agenda but at getting the maximum reasonable benefit from this," he said.
"Therefore, we are holding a dialog on this score with companies here. This regards the same issues with forestry too, that is, how it's possible to use the planting of forests, for example, in order to count it in the carbon footprint; it is also the matter of how to make LHG greener using different methods. Therefore, the main message is that we shouldn't succumb to slogans but should make calculations ourselves and understand what consequences there will be for us from this or that," Sorokin said.
"Naturally though, to hold a dialog with our partners, who understand this in absolutely the same way. That is, withdrawing polluting industries to China from the European Union doesn't mean that the European Union has stopped being an emitter, just that the center of emission has moved to another place. The hydrogen agenda that we are now actively engaged in, too. Look at the European Union's strategy, it quite clearly implies removing production of 'blue' hydrogen [production of hydrogen from gas using technology for capturing and storing or utilizing carbon] to outside the European Union, that is, relocating the center of emission [of greenhouse gases]. At the same time, formally the European Union, sure enough, will remain clean and green. We need to work with this, it needs to be taken into consideration, and hopefully a certain mutual understanding will be reached with partners here," he said.
