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Country case: Russia – oil, gas, coal
Share of global production 62
Share of imports to Germany
Oil 12.8% 37.3%
Natural gas 18.5% 28.9%
Coal 4% 25.7%
Russia is the fifth largest economy in the world and is a leading exporter of oil
and natural gas. Mining contributed 11% to Russia’s GDP in 2013 63 . Russia’s
gas output is expected to grow as Russia holds 21.4% of the world’s proven natural
gas reserves. Although Russia only produces 4% of the world’s coal, it is
the world’s third largest coal exporter and the primary source of coal imported
to Germany. Over half of Russian coal is mined in Kuzbass, Southern Siberia,
which is also the main source of coal exported to Germany 64 .
The government
categorised about 40%
of Russia’s territory as
under high or moderately
high ecological
stress.
Water situation
Most of Russia’s freshwater resources, which are contained in the permafrost
covering the northern part of European Russia, most of Siberia, and almost
the entire far-east region, are of no practical use. The majority of Russia’s total
annual renewable surface water resources, estimated at 4,222.24 km 3 , are
generated internally; however, resources are unevenly distributed across the
country. The central and southern regions of European Russia, where 80% of
the country’s population and industry is concentrated, have only around 9% of
surface and groundwater resources 65 . In the 1990s, after decades of environmental
neglect, the government categorised about 40% of Russia’s territory as
under high or moderately high ecological stress 66 . The worst drinking water
quality is found in the north and northwest of the country, especially in areas
where oil and chemical industries are located 67 .
Physical risk
Since oil production does not depend on unpolluted water resources, the Russian
oil industry’s risk arising from water pollution is mainly reputational (see
below). Environmental pollution by wastewater effluents and oil spills will,
however, have direct financial implications for oil companies if they have to
assume their environmental costs.
Regulatory risk
Russian environmental law has been deemed ill-equipped to handle the inevitable
accidents that are associated with the oil industry 68 . Enforcement of
environmental regulations has historically been weak in Russia, but a survey
from 2011 reveals concerns within the oil and gas industry over future regulation
as the government seeks to close a budget gap with the help of oil and gas
industry revenues 69 .
THE IMPORTED RISK Germany’s Water Risks in Times of Globalisation | 31