|Alexey Miller - a case of denial|
Alexey Miller, CEO of Russian gas monopoly Gazprom - "perhaps the most mismanaged and corrupt company of its size in the world" - owes his position, not to his prowess as an energy expert or a business leader, but solely to his close ties with dictator Vladimir Putin.
Reading what this man, who would have been sacked already long ago had he been the in charge of a western energy company, has to say about the U.S. shale gas revolution, proves the point:
The extraction of shale gas in the US is unprofitable and this “soap bubble will burst soon,” believes the CEO of Russian gas giant Gazprom Aleksey Miller.
“Currently, there aren’t any projects that we know of where shale gas production would be profitable,” Miller stated, adding that “absolutely all the boreholes” are in the red. --
The US “is not a competitor” for the Russian energy giant, Miller stated.
“We are skeptical about shale gas,” he said, as cited by Interfax. Therefore, Gazprom sees “no risks” for itself in the development of shale gas energy in the US. America still remains a country with a deficit of gas – it is the largest gas market and the largest consumer of this fuel, Miller said.
A psychologist could not find a better example of a person fitting the definition of being in denial:
Denial is probably one of the best known defense mechanisms, used often to describe situations in which people seem unable to face reality or admit an obvious truth (i.e. "He's in denial."). Denial is an outright refusal to admit or recognize that something has occurred or is currently occurring. Drug addicts or alcoholics often deny that they have a problem, while victims of traumatic events may deny that the event ever occurred.
Denial functions to protect the ego from things that the individual cannot cope with.
Miller, as well as his creator Vladimir Putin, are clearly in denial about e.g. these facts:
We have seen a 40 percent increase in domestic oil production since 2008, the highest growth in oil output of any country in the world over that time period. As could be expected, net oil imports have plummeted, from more than a 60 percent share of domestic consumption in 2005 to less than 40 percent this year, the lowest dependence on foreign sources of oil in more than 20 years. Domestic oil production is booming, and the United States could even surpass Saudi Arabia to become the world's biggest oil producer by 2020.
The upsurge in U.S. natural gas production has been no less dramatic. The Energy Information Administration, or EIA, estimates that the U.S. has enough gas to last more than 100 years. What has become known as the "shale gale" has turned a shortage into a surplus, and now natural gas accounts for more than a quarter of America's total energy.
The abundance of cheap gas has helped reduce utility bills for consumers through lower electricity costs and lower costs for the millions of Americans who use gas to heat their homes. And the "shale gale" has sparked a revival in domestic manufacturing, mainly in the chemical industry but also in other energy-intensive industries like iron and steel. Because U.S. natural gas prices are now the lowest in the world, industries that once exported manufacturing facilities abroad are suddenly bringing them back home as they pursue new investments. All of this has increased economic growth, created jobs with good wages and produced revenue for governments at all levels.
Read the entire article here
In their 2010 booklet Putin and Gazprom , Boris Nemtsov and Vladimir Milov, the opposition politicians, detailed how assets were being stripped from Gazprom through large kickbacks on pipeline construction and cheap sales of financial and media subsidiaries to Putin cronies. Since shareholders have realised that only their dividend yield is material, Gazprom’s market value has plummeted by two-thirds from $365bn in May 2008 to $120bn today.
Read the entire article here
A country with such huge natural resources as Russia, should be able to offer its citizens a standard of living on par with the most affluent countries in the world. Sadly, the reality of Vladimir Putin's Russia is a totally different story:
The richest slice of Russian society has doubled its wealth in the past 20 years, while almost two-thirds of the population is no better off and the poor are barely half as wealthy as they were when the Soviet Union fell, according to researchers.--
The huge gap between rich and poor "largely negates the economic and social achievements of recent years," the HSE report said.
Yasin added that the study indicated there were "two Russias". The wealthiest fifth of the population received a pay cheque equivalent to 198% of its value in 1991, while the poorest fifth made only 55% in real terms. In total, 60% of the population has the same real income or less than the average 20 years ago.