Streetwise Professor

Vladimir Putin is deeply concerned about the environment, especially about the environmental ravages of evil American technology, notably fracking:

Speaking of the United States, Putin had plenty of words for them as well, accusing the U.S. of ignoring the negative environmental externalities of the nation’s mass-scale shale oil and gas production (fair enough) calling the process “barbaric” and proclaiming that Russia will never use fracking as a means of oil and gas extraction. “We will never frack,” Putin told a representative from Total SA during Moscow’s Russia Calling! conference on Wednesday. “We don’t need to develop shale oil at all. First, we don’t need to increase the supply of oil to world markets, and we have enough oil we can get from the Arctic shelf.” He added, “In spite of all of the economic benefits, we do not need it and we will never do this.”

Well, Putin does have a (rather mysterious) candidate degree in “economic science” from the St. Petersburg Mining Institute, so perhaps he is qualified to give disquisitions on externalities (never mind the plagiarized thesis!). But the externalities lingo was no doubt put into Putin’s mouth by Charles Kennedy (whoever the-F he is). If Putin’s reference to barbarism had anything to do with the environmental impacts of fracking, he was merely blowing smoke up the you-know-what of the environmental movement in the West.

No, if Putin thinks that anything about shale and fracking are barbaric, it is the fact that they have raped and pillaged the oil price on which he and Russia are so dependent, and have created the US LNG industry which constrains Russian market power in European gas markets.

In other words, if there is anything green behind what Putin said, it’s greenbacks, not nature.

As for environmental impact, drilling and producing in the Arctic Shelf is far more environmentally problematic than shale production via fracking.

Putin’s anti-fracking jeremiad is also undermined by Gazprom Neft’s endeavors in this area. It’s also worth nothing that Russia’s Bazhenov layer (which Gazprom Neft is focused on) is arguably the largest shale resource in the world. The impediment has been technology, a problem exacerbated by sanctions, now going on their 6th year.

You can bet that Putin would not be lamenting the barbarities of fracking if Russia had the capability to do it. He is merely trying to rationalize Russia’s technological inability to exploit its shale resources, an inability exacerbated by the consequences of his foreign policy adventurism.