. . While Russia Sends Most of Its Energy Abroad . .

By Editors

Whereas the United States is forever trying to balance energy production with consumer demand, the Russians have solved their problems by becoming a major exporter of energy while hardly allowing any new consumption at home.

The four graphs tell an amazing story. Graph 1 (upper left) shows Russian exports of oil and petroleum products have now risen to 7 million barrels a day, making Russia the world’s second largest exporter behind Saudi Arabia. This is because Russian oil production has climbed from 6 million barrels per day (mb/d) to more than 9 million since the 1990s. But hardly any of this oil is being consumed at home. Graph 2 (upper right) shows domestic consumption fell from at 4.5 mb/d in 1992 to 2.5 mb/d by 1996 and has barely budged since. Nearly all the oil production is being sold abroad.

Almost the same thing has happened with the consumption of energy in general.  Graph 3 (lower left) shows that consumption of all energy resources declined rapidly until the late 1980s, then picked up a bit but has not increased significantly. Total energy production on the other hand (lower right) has increased rapidly and now stands 50 percent higher than it did in the early 1980s.

Consider the implication of these graphs. Both energy production and consumption declined precipitously during the 1980s, spiraling downward while the rest of the world prospered. No wonder the Berlin Wall fell in 1989 and Russian Communism collapsed two years later.  Centralized administration of the economy just doesn't work.  Now Russia is prospering as an energy exporter yet somehow very little of this trickles down to the average Russian consumer. Instead it is monopolized by the giant government-owned corporations, which market it abroad.  Is there another Russian Revolution brewing somewhere? It seems as if something will have to give way at some point.

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