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Russia Promotes Energy Resources in U.S.

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Russia Promotes Energy Resources in U.S.

World

Russia Promotes Energy Resources in U.S.

Russia Promotes Energy Resources in U.S.

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Russia, the world's No. 2 oil exporter and biggest producer of natural gas, wants to improve energy cooperation and sell the United States more of its vast output. Some analysts warn that Americans would simply be swapping one unstable source of oil for another.

RENEE MONTAGNE, host:

As the United States struggles to cope with the problem of high energy prices, Russia is offering itself as a solution. The world's number two oil exporter and biggest producer of natural gas wants to improve energy cooperation and sell the US more of its vast output. Whatever the attractions of reducing dependence on energy from the Middle East, some people warn the US would be swapping one unstable source for another. NPR's Gregory Feifer reports.

GREGORY FEIFER reporting:

Five years from now when you turn up your thermostat on a cold day, your furnace may burn oil or gas sent all the way from Russia. That's the message Moscow is bringing Americans this week. Russia's energy minister, Viktor Khristenko, is leading a delegation of top Russian businessmen here to say Russia wants to be America's partner. The Russians seem to want this to be a high-profile visit. Khristenko spoke to reporters at the National Press Club before he met President George Bush.

Mr. VIKTOR KHRISTENKO (Russia's Energy Minister): (Through Translator) The dialogue over energy and industry serves as one of the key directions of that partnership. In that sense, our visit is meant to fill out the strategic partnership.

FEIFER: Khristenko's visit comes as the Russian state is securing control over the country's energy industry. It's done that by reversing the privatization of companies that took place after the Soviet collapse. The Kremlin says Russia's oil wealth was sold off on the cheap to well-connected businessmen. But Russia scholar Lilia Shevtsova thinks the takeovers are actually part of President Vladimir Putin's drive to consolidate power. She spoke after a conference at the Carnegie Endowment.

Ms. LILIA SHEVTSOVA (Russia Scholar): It's a conscious attempt on the part of the Kremlin to build a state capitalism in Russia, which would allow, first of all, bureaucracy and Putin's team to control the energy assets.

FEIFER: But energy minister Khristenko dismisses worries the government's buying spree represents a slide back to Soviet-style centralized control. In fact, he says, it's all about freeing up the Russian energy industry, as well as having the muscle to compete fairly in the global marketplace.

Mr. KHRISTENKO: (Through Translator) It's a policy of liberalization rather than a policy of strong pressure on one or another weak point of our foreign partners.

FEIFER: Foreign policy analysts see a different motive. Celeste Wallander of the Center for Strategic and International Studies, the CSIS, believes Putin's strategy is actually aimed at using its new control over the energy industry to restore Moscow as a global power.

Ms. CELESTE WALLANDER (Center for Strategic and International Studies): Russian government ownership of the energy sector is a bad thing for America and energy security, because it means the Russian leadership is trying to make energy an instrument of foreign policy rather than an aspect of global energy markets.

FEIFER: The Kremlin has already flexed its muscles in Europe, where countries like Germany increasingly depend on Russian natural gas supplies. Wallander says Moscow has used its growing economic importance there to encourage political opposition to the United States over such issues as the Iraq War and democratization in former Soviet countries. Energy minister Khristenko isn't getting it all his own way during his trip. Yesterday lawyers said he had been served with a summons just as he is preparing to appear at a banquet in his honor. Khristenko denied receiving it. The summons concerns a lawsuit filed by investors in Yukos, once Russia's biggest oil company. They feel Putin's administration ripped them off when a state-controlled enterprise took over the firm's assets last year. Former Yukos chief Mikhail Khodorkovsky is now behind bars on what many experts say are politically motivated charges.

The move fits a recent pattern. This month, the state-controlled natural gas giant Gazprom snapped up another private Russian oil company called Sibneft. But Wallender of the CSIS points out what she sees as a flaw in Moscow's plan.

Ms. WALLANDER: Energy production in Russia is dropping this year, and at least some serious analysts of Russian energy attribute that to increasing state control in the energy sector.

FEIFER: Wallander also says growing energy prices and worries over Russian maneuvering may eventually push consumers to look to other producers and alternative sources, such as nuclear and solar power. Gregory Feifer, NPR News, Washington.

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