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Russia’s Fantasy Energy Projects Serve a Purpose

From Canada’s Financial Post, an article on the political importance of Russia’s impossible energy project proposals (and a quote from RA):

Russia’s Tunnel Vision Jon Harding and Claudia Cattaneo, Financial Post CALGARY – Russia yesterday revived a plan to transport oil, natural gas and electricity to the United States via a tunnel under the Bering Strait from Siberia to Alaska, a colossal project that was quickly panned for its questionable economics and business logic and its impact on U.S. energy security. The proposal, which would include a rail system ending at tiny Fort Nelson, B.C., would also threaten Canada’s unique energy relationship with the United States, energy experts and economists said. “It’s in the realm of George W. Bush’s comment, ‘Let’s send someone to Mars’, ” said energy commentator Michael Lynch, president of Amherst, Mass.- based Strategic Energy & Economic Research Inc. “It’s a nice idea, but after they look at the costs and the benefits, it’s going to be a long time in the future,” Mr. Lynch said. Yesterday morning in Moscow, Viktor Razbegin, deputy head of industrial research at the Russian Economy Ministry, told reporters that state organizations in partnership with private companies would build and manage the energy corridor, known as TKM-World Link. The 6,000-kilometre corridor from Siberia into the United States includes a 100-kilometre tunnel under the Bering Strait. It will be more than twice as long as the underwater section of the Channel Tunnel between the U.K. and France. The undersea tunnel would contain a highspeed railway, highway and pipelines, as well as power and fiberoptic cables. … Greg Stringham, vice-president of the Canadian Association of Petroleum Producers, said similar plans have been floated by the Russians in the past, but went nowhere. The first came as far back as 1905, when Tsar Nicholas II, Russia’s last emperor, approved a plan for a tunnel under the Bering Strait, 38 years after his grandfather sold Alaska to the United States for US$7.2-million. The First World War ended the project. Mr. Strigham said the latest ruminations about an oil pipeline were made as recently as six years ago. “I know it has been extremely difficult to justify it economically in the past,” he said. … Canadian lawyer Robert Amsterdam, who defended jailed Russian oil tycoon Mikhail Khodorkovsky, said Russia is notorious for floating big plans to curry favour from foreign governments and companies but that go nowhere. “God forbid our politicians take it seriously,” Mr. Amsterdam said. “When I keep telling people that Russia uses energy as a weapon, these mega-project prognostications, now I can say quite frankly, ‘Follow the Shtokman theme.’ They lead countries by the nose; countries literally change their foreign policy so as not to confront the Russians based on these carrots, and then end up more often than not with nothing.”

Complete article here.