Report - UNDP Russia

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Chapter 2Energy and the Regions:Human Development Challenges2.1. Fuel & energy regions:their role in Russia’s economyand developmentThe industries that comprise Russia’s fuel& energy sector are spread unevenly across itsregions, and therefore play different roles indifferent regional economies. About a quarter ofRussia’s administrative regions, with one sixth ofRussia’s population, specialize in extraction andprimary processing of fuel resources. However,federal budget revenues from extraction andexport of fuel resources are redistributedthroughout the country.The largest oil & gas producing region isTyumen, specifically the Khanty-Mansi andYamal-Nenets Autonomous Districts, which areconstituent parts of the Region. Tyumen Regionprovides 12% of Russia’s industrial production(including 8% from Khanty-Mansi alone) and thesame share of Gross Regional Product (GRP).These figures are understated, because many fuel& energy companies use transfer pricing torelocate profits in favor of their Moscow-basedheadquarters or offshore companies in order tominimize taxation. The fact that Moscow has thebiggest share of Russian GRP (23%) is largely dueto concentration of profits in head offices of largecompanies in the city. Besides, a statistical quirklocates 10% of all fuel & energy extraction inRussia in the city of Moscow. Corporate reportingjuggles figures to distort the actual input ofextraction regions to fuel & energy production,creating special advantages for the Moscow citybudget thanks to huge amounts of profit taxfrom the country’s leading corporations.The main regions for Russia’s fuel &energy sector are obvious from figures that showraw fuel and electricity production. Territorialconcentration of most sub-sectors is very high,especially in oil & gas extraction. Tyumen Regionwith its autonomous districts accounts for 91% ofgas and 66% of oil production (Table 2.1). Coal ismined in many regions, but the two leaders –Kemerovo Region and Krasnoyarsk Territory –account for 70% of all production. Electric powerproduction is most dispersed, but the leader isagain Tyumen Region, followed by Siberianregions, which have a well-developed hydropowerindustry (Irkutsk Region and KrasnoyarskTerritory) and the cheapest electric power in thecountry as a result. Moscow and the leadingTable 2.1Leading regions for fuel extraction and electric power production(share in national production in 2007-2008, %)Crude oilextraction*%Natural gasextraction% Coal extraction %Electric powerproduction%Tyumen Region 66 Tyumen Region 91 Kemerovo Region 58 Tyumen Region 9incl. Khanty-MansiAutonomous District57incl. Yamal-NenetsAutonomous District87 Krasnoyarsk Territory 12incl. Khanty-MansiAutonomous District7incl. Yamal-NenetsAutonomous District9incl. Khanty-MansiAutonomous District4 Chita Region 4 Irkutsk Region 6Republic of Tatarstan 7 Orenburg Region 3 Republic of Komi 4 Krasnoyarsk Territory 6Orenburg Region 4 Astrakhan Region 2Republic of Sakha(Yakutia)4 Moscow 5Sakhalin Region 3 Irkutsk Region 3 Sverdlovsk Region 5Nenets AutonomousDistrict3 Republic of Khakassia 3 Saratov Region 4Republic of Komi 3 Primorsky Territory 3 Leningrad Region 4*incl. gas condensate28 National Human Development Report in the Russian Federation 2009
industrial region of the Urals – Sverdlovsk Region –are also major producers of electric power.The fuel & energy industries play animportant role in regional economies, creatingwell-paid jobs and providing large revenues forregional budgets. However, domination of suchsegments and formation of single-industryregional economies increase development risksdue to instability of fuel prices and depletion ofnatural resources in the long term. Singleindustryoil & gas regions include Tyumen andthe Nenets Autonomous District and, in the pastlast few years, Sakhalin Region (Figure 2.1). In 8-9 other regions contribution of the fuel & energysector to regional industrial output is higher thanthe national average. The Republic ofBashkortostan, Samara Region and Perm Territoryshould also be included in the list: these regionsare specialized in primary processing of oil & gasas well as having sizeable extraction industries,so that total contribution of the fuel & energyindustry to their economies is higher thansuggested in Figure 2.1. Moscow is includedamong oil & gas producing regions because ofthe statistical eccentricities mentioned above. Oil& gas production in Arkhangelsk and TyumenRegions is concentrated in their constituentautonomous districts.Specialization in oil & gas productionhelped these regions to survive the 1990s crisiswith much less serious industrial recessionscompared with the Russian average. TheRepublic of Udmurtia, where the defenseindustry dominates the economy, was anexception. Coal-mining regions were not sparedthe privations of the transition period. The coalindustry has undergone restructuring and masslayoffs, particularly in traditional mining areas,where many mines had been loss-making for along period (Rostov, Tula and Chelyabinskregions, Perm Territory), and in the northern andeastern territories where costs of coal mining arehigh due to harsh climate and remoteness.The period of economic growth, whichlasted for a decade (1999–2008), saw highestgrowth rates in two oil & gas producing regions,where development of new deposits started atthat time: the Nenets Autonomous District(industrial output quadrupled compared with1990) and Sakhalin Region (output rose by 1.8times compared with 1990). These results areshown in Figure 2.2. Tatarstan also enjoyedstrong growth of industrial output in 1999–2008(by 1.3 times) thanks to large governmentinvestments. Nearly all other regions with asizeable fuel & energy sector only approachedlevels of the end of the Soviet era or, at best,slightly surpassed them. Oil & gas production didnot provide strong and consistent economicgrowth in these regions after 2000. Tomsk Regionand Yamal-Nenets Autonomous District showeddeclines of industrial output from 2004. TheFigure 2.1Share of fuel resource extraction in regional industrial output in 2007, %10090807060504030201009890 88 88776448 47 4542 38 3631 27Nenets Autonomous DistrictKhanty-Mansi Autonomous DistrictSakhalin RegionYamal-Nenets Autonomous DistrictTyumen RegionChechen RepublicTomsk RegionArchangelsk RegionKomi RepublicOrenburg RegionKemerovo RegionRepublic of UdmurtiaRepublic of TatarstanChita RegionAstrakhan RegionRussian Federation2419 17 15 1413 12MoscowPerm TerritoryRepublic of Sakha (Yakutia)Republic of BashkortostanSamara Region29
Page 1 and 2: National Human Development Reportin
Page 3 and 4: National Human Development Reportin
Page 5 and 6: ACKNOWLEDGEMENTSThe authors express
Page 7 and 8: Dear Reader,You have before you the
Page 9 and 10: PREFACEThis is the 13 th National H
Page 11 and 12: country’s fuel & energy regions r
Page 13 and 14: environmental degradation and enhan
Page 15 and 16: Chapter 1The Energy Sector,the Econ
Page 17 and 18: By 2008 Russia had increased its sh
Page 19 and 20: the share of energy in the national
Page 21 and 22: exported, increased. However, this
Page 23 and 24: elimination of structural and terri
Page 25 and 26: • Establishment of competitive me
Page 27 and 28: number of developed countries, incl
Page 29: Although the United Nations Climate
Page 33 and 34: 2.2. Budget capacityand structure o
Page 35 and 36: (the Federal State Statistics Servi
Page 37 and 38: Immigration by young and highly ski
Page 39 and 40: energy regions exacerbate the incom
Page 41 and 42: Khanty-Mansi and Yamal-Nenets Auton
Page 43 and 44: the Ministry for Regional Developme
Page 45 and 46: various other long-term problems in
Page 47 and 48: is also associated with the fuel an
Page 49 and 50: Republic of Mordovia 8051 0.732 68.
Page 51 and 52: Legislative control of impact audit
Page 53 and 54: Chapter 3Personal Incomes, the Ener
Page 55 and 56: than any other sources of income -
Page 57 and 58: Are wages now the main instrument f
Page 59 and 60: comparison of month-on-month develo
Page 61 and 62: • The unemployed, people who aree
Page 63 and 64: Employment in the energy sector acc
Page 65 and 66: The share of household expenditures
Page 67 and 68: subsidization practices in the regi
Page 69 and 70: in power use between regions now de
Page 71 and 72: Electricity prices for households h
Page 73 and 74: • Steady decrease in the percenta
Page 75 and 76: 1. The number of graduates with eng
Page 77 and 78: As well as requiring better fuelcom
Page 79 and 80: Box 4.1. The village of Kolvain Uss
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continue to use solid fuel for a lo
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Box 4.3. Ambient air pollution andp
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either by large power generating fa
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Box 4.6. A city at riskNovocherkass
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In order to assess impact of thesee
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generation facilities through safer
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achieved in developed countries. So
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equires 2-6 times more capital inve
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government) should set targets and
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networks. In 2007 government budget
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enhancement is also important. Ener
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energy efficiency of the transport
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Box 5.1. Programme of the Ministry
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educational and informational suppo
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mechanism for using national quota
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Figure 6.2Share of electricity gene
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One of the major benefits of renewa
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odies; outdoor air; rocks and soil;
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Design and construction of geotherm
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Box 6.3. Prospects for nuclear powe
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consists of out-dated equipment at
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ConclusionThe world’s nuclear pow
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7.1. Impact of the fuel& energy sec
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Table 7.5Solid waste from productio
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Table 7.7Areas of disturbed and rec
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nature of the impact (atmospheric e
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Further, the economic cost ofenviro
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trends continued the damage would a
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What the government needs to do ino
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Figure 7.2.1Specific atmospheric em
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money value of industrial output) c
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Figure 7.2.4Trends in specific atmo
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Chapter 8The Energy Industry and Su
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eing equal) it only reflects that p
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(MDGs), issued by the UN in 2000. T
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8.4. The energy factorin integral i
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Canada, the USA and Great Britain h
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Box 8.2. Energy efficiencyindicator
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Box 8.4. Energy efficiency rating o
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41 Penza Region 116.0 -35.2 -4.542
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Appendix to Chapter 1Table 1.1. GDP
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Attachment to Chapter 4Table 4.1Rus
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Attachment to Chapter 4Volga Federa
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Attachment to Chapter 4Belovo Belov
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The previous National Human Develop
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Report - UNDP Russia

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