This past Monday, I attended a Georgetown University panel discussion that featured Alexander Medvedev, the deputy chairman of Gazprom, the largest producer and exporter of natural gas in the world. In addition to Medvedev, the panel included an assortment of representatives from the corporate and academic realms (props to my roommate for letting me know about the event). I took down a few notes that someone might find useful:

Sarah Carey (a director of the Yukos Oil Company from 2001-2004):
- The EU suffers from “post-Ukraine crisis syndrome.” Russia’s actions during the “gas war” of 2006 were “heavy handed but the rationale was clear.”
- Examples of overzealous Western criticism:

Vice President Cheney’s Vilnius Speech: “Other actions by the Russian government have been counterproductive, and could begin to affect relations with other countries. No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempts to monopolize transportation. And no one can justify actions that undermine the territorial integrity of a neighbor, or interfere with democratic movements.”

Washington Post editorial, February 2006: “This time Putin has avoided open intervention in the campaign. Instead he triggered the gas crisis and presented his Ukrainian enemies with a choice: Swallow a mammoth midwinter price increase for the fuel Ukrainians use to heat their homes, just weeks before the election, or hand Russia a commanding long-term stake in Ukrainian energy infrastructure — and the ability to trigger a gas supply crisis at any time.”

International Herald Tribune, January 2006: “Gazprom used to sell energy cheaply to the former republics as a legacy of the old command economy. It can argue with some justification that it should charge market prices. And it is certainly entitled to object to gas destined for Ukraine being sold at a profit to other countries. At the same time, it is hard to escape the thought that the Russian government is pressuring Ukraine by using gas supplies the way Soviet leaders sometimes used tanks and soldiers.”

Thane Gustafson (Professor, Georgetown University):
- With the increasing use of LNG, the natural gas industry is starting to resemble the business of producing oil
- Gazprom took the risk of building pipeline system “on spec”
- Gazprom’s Marketing and Trading arm is bundling carbon credits with gas, essentially providing their customers with a “carbon neutral package”
- Looking ahead: Gazprom’s conquest of the Yamal Peninsula

Tim Sutherland (CEO, Pace Global Energy Services):
- In regards to the Shtokman gas field, contrary to news reports, Gazprom hoped that a US company would prevail in the bidding process
- Russia is prepared “to fill a vacuum that is ever widening” between U.S. energy production and consumption and will be able to meet US energy needs through LNG.
- West needs to move past Reagan’s mantra of “trust and verify”, and simply trust.

Alexander Medvedev (Deputy Chairman of the Board of Executive Directors, Gazprom and Director-General of Gazexport):
- Gazprom is responsible for 1/4 of the world’s gas exports and has been a reliable supplier for over 40 years
- In the United States, natural gas fired power plants are the only near term solution to meet electricity demand due to various state regulations and bans on coal fired power plants (ie, California)
- Part of Gazprom’s refocused strategy: Shipping Russian LNG to North America
- Presenting themselves as the solution to China’s greenhouse gas emissions. China could eliminate something like 400 million tons of CO2 by switching from coal to Russian-provided natural gas
- Gazprom, like any other energy company, is “in business to make money in an extremely competitive commodity market”.
- Dedicated to openness and transparency; “no one wants any more Enron cases”
- There is no reason why Gazprom’s contracts shouldn’t be done in rubles once the currency is fully convertible. It is a reflection of the stability and strength of the Russian economy.

On a lighter note, Medvedev is also captain of the GazpromExport hockey team (a bunch of pipeline engineers playing hockey?), and ended his speech by noting that three Russians (Ovechkin, Semin, and Kozlov) currently play for the Washington Capitals and an American, Barry Smith, is head coach of the SKA St. Petersburg Russian hockey team. It is his hope, he stated, that this mutual reciprocity between the United States and Russia would be extended to energy issues as well.

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