The Exploitation Of Russian Arctic Oil And Gas Resources And Its Impact On Russia's Economic Growth

The explosion of the world population and the shortage of energy make people's eyes have to focus on the energy crisis.Russia is a major exporter of energy and its economy is closely related to energy.For Russia,the country can rely on its existing oil fields for only 21 years and natural gas resources for only 70 years.If the new oil and gas fields will be not exploited soon,Russia will face energy security issues.Developing alternative energy sources and exploring new oil and gas fields are the fundamental solutions to the energy crisis.At present,global warming has led to the melting of glaciers in the Arctic and even has caused seasonal ice-free phenomena,making this region possible to develop oil and gas resources.This dissertation seeks to achieve three research purposes: First,to assess the share and status of the oil and gas resource reserves in the Arctic region of Russia from the perspective of its the distribution and current exploiting status;Second,to estimate Russia's ability to exploit Arctic hydrocarbon resources and its impact on the country from the perspective of Russia's current exploitation situation of oil and gas resources in the Arctic,and Russia's national policy;Third,to study the impact of Russia's exploitment of Arctic oil and gas resources on the Russian economy from the economic point of view.The author sorts out the relationship between natural resources and economic growth.It was found that classical economists generally believe that rich natural resources are the fortunate coincidence and play a positive role in promoting economic growth in the region.Neo-classical economists holding the natural resource-neutral economic hypothesis,simply consider natural resources as a kind of production cost that can be compensated by technological progress.The well-known Solow-Swan model sets technical progress as an exogenous variable affecting the gross national product,while the endogenous variables that affect economic growth include three elements,such as natural resources,labor and capital,which can be mutually replaced.The model clearly affirmed the positive correlation between the abundance of natural resources and economic growth.With the economic development,people gradually find out that the relationship between the abundance of natural resources and economic growth may not be a simple positive correlation.The “resource curse” and other reasons threaten the development of the economy in resource-rich areas,and the abuse of natural resources causes problems of resource depletion and environmental pollution.Russia's economy depends on the energy industry,the Russian economy is often described as “energy economy” or “resource economy”.In recent years,the economic development in Russia is quite twists and turns,so it is imperative to develop the Arctic hydrocarbon resources.After evaluating the Arctic oil and gas resources,Russia is still the country with the most oil and gas resources among Arctic countries,despite the differences in the quantitative assessment of Arctic oil and gas resources.With the decreasing oil and gas resources in the Arctic onshore,Russia's oil and gas development will be inevitably carried out on the Arctic continental shelf in the future.The complex geopolitical environment in the Arctic has spawned a number of national policies and related international(internal)laws on the development of the Arctic oil and gas.Currently,in Russia series of government documents were carried,such as the “Basic Principles of Policy of the Russian Federation in the Arctic for the period up to 2020 and beyond”,the “Russian Federation Strategy for the Development of the Arctic and National Security until 2020” and the “National Outline of the Socio-Economic Development of the Arctic Region of the Russian Federation by 2020”.On international scale,the United Nations Convention on the Law of the Sea and the Arctic Council have a significant impact on the access to energy in the Arctic.Therefore,based on the current legal framework,most of the proven oil and gas resources of the Russian Arctic continental shelf have been divided under control of two company groups: the Russian gas group and the Russian oil group.The exploration of onshore oil and gas fields in Russia's Arctic began in the 1930 s.Other Arctic countries have not done similar work during this time.At present,Russia ranks among the top three oil and gas producing countries in the world.In 2014,Russia exploited 525 million tons of oil and 668 billion cubic meters of natural gas.Russia mined 533 million tons of oil in 2015.Among all oil and gas resources mined in Russia,90% of the natural gas and 10% of the oil are produced in Russia's Arctic.By 2016,Russia has extracted 571 million tons of oil in total.Arctic oil accounts for 17% of the total oil and gas production in Russia and 80% of Arctic gas.In Russia's total natural gas reserves,the Arctic accounts for 91%.The rich natural resources of the Arctic region will surely have a huge impact on the country's economic development.Russia intends directly to improve the level of development in the Arctic region and promote infrastructure construction that also would indirectly affect on economic development.However,based on the "resource curse",it can negative impact on the fragile ecology in the Arctic region.The author believes that for the Russian economy,Russia's Arctic oil and gas resources have the economic multiplier effect,conducive to the formation of highly competitive clusters.In the stages of exploration,development,transportation,processing and export,modern Arctic oil and gas resources not only provide development opportunities for oil and gas-related industries,but also create conditions for the development of non-oil and gas industries.At the same time,Arctic rich oil and gas resources are one of the important reasons for attracting countries to shift their attention to the development of the Northern Sea Route.The development of Arctic oil and gas in the Arctic is undoubtedly positive for the construction of the Northern Sea Route.To avoid the negative impact of “resource curse”,the Russian government should also use the fiscal revenue obtained from energy trade,set up industry-led funds,rationally plan the development of industry and professional talents,enhance the diversified development of the local economy,and pay attention to the construction of the system.The advanced technologies ensures a good local business environment and efficient government management capabilities.In order to protect the local ecological environment,the Russian government should improve relevant environmental protection policies,learn from advanced environmental management practices in other countries,conduct constructive dialogues with international environmental organizations,carry out national environmental protection projects and conduct real-time supervision of the prevention of ecological and environmental pollution in the Arctic Measures.In order to reduce the non-economical nature of Arctic mining,Russia needs to promote the innovation of core technologies in mining and transportation,improve the level of digitization and informational support of operations,change the dependence on imported equipment and foreign technologies,and enhance the international competitiveness of Russia's domestic manufacturing industries competitiveness.Finally,a stable political environment is an important guarantee for development.Russia should join into the framework of multilateral cooperation to create preventive measures for the development of the Arctic region and use regional authoritative organizations such as the Arctic Council to discuss Arctic oil and gas development issues.Also,Russia can deepen the cooperation in the field of Arctic development with Kazakhstan,India and China.China's “ice-silk road” initiative project and the development project in the Russian Arctic are much in line with the strategic directions of the two countries and so,Russia would take the initiative to implement strategic cooperation.