A Price Is A Revenue


Comment on the video proceedings of the academic conference held at the University of Harvard during the 7th and 8th of March 2008 under the title :
“Reassessing Post-Soviet Energy Politics, Ukraine, Russia, and the battle for Gas from Central Asia to the European Union

 

Introduction to the Conference on YouTube :

All parts of the conference are available and accessible through links related  to this video.

The full programme of the conference is also available.

 

Introduction

It’s a truism now to repeat that the emergency, since the beginning of the XXIst Christian century, of newly organized media, related to the development on an industrial scale, of new technologies of communication, offers alternative supports to the Information as we knew it previously, I mean the way Information has been progressively channelled towards the general public or public opinion, through very ritualized and formalized shapes, like the tv news, since the creation of the first system of television network during the 1930’s.

Among the flourishing new broadcasting actors, many are non-commercial and non-economically driven sources, whose agenda may be pedagogical or cultural or political if they are not financially profitable. In these cases, when none agency of communication or professional is involved, the quality of the presentation may be far less professional than what is delivered on a national media, with dedicated studios, equipment and personnel. The pictures may be filmed with limited means (to reduce the weight of the production in a budget) by non-professional teams. The speakers and moderators, during a debate, may handle their verbal exchanges with less expertise of the timing than a journalist following the utmost standards of the profession would do, what, unavoidably, results in the leaving of lots of uninteresting silences and hollow seconds in the speech flow. But, in fine, the content may gain in depth compared to a predictable perfect documentary production when, instead of seeking for entertainment, we want to get a better idea on a very precise topic without being an expert of the domain.

This is the case with the recent wave of publications of video proceedings from academic conferences on video sites like YouTube, to mention the most famous worldwide brand of the sector nowadays. It is now possible to follow the non less than 7 hours and a half of the conferences and debates involving non less than 18 expert speakers which were held at the University of Harvard during 2 days, the 7th and 8th of March 2008, on a decisive if not critical topic : the energy politics on the Euro-Eurasian continent. Question on which, even if I am completely a novice, I consider having some reasons to get a better picture.

To the number of registered speakers, we must add a non-less significant number of well-informed persons in the public who contributed to the debates and enriched the discussions with varied and contradictory points of view of insiders. This aspect of the video recording also pays a great deal to the interest of this procedure since none cut is practiced and the videos released almost as raw material.

But then, what is the informative supplement of such a pedagogical document, 5 years or so after the depicted events, when a certain number of individuals, mentioned as players in the game, have changed, after an evolution of status ? Let’s try to find some substance beyond the personifications and the temporary forms of power.

These Holy Asymmetries

Initiated by the Harvard Ukrainian Research Institute and co-sponsored with the Davis Center for Russian and Eurasian Studies, this conference is placed under this bicephal approach and it appears rapidly that it is also driven by a critical focus on the relationship between the actors of a tense continental game. The conference echoes a previous conference held two years earlier at the same place, with the same institutions, some of the same speakers and on the same topic. At that time, the stake was to describe or to assess the immediate events of the gas war of January 2006 between the Russian side represented by Gasprom and the Ukrainian side represented by the gouvernment of the Orange Revolution. The March 2008 conference, in reflection, points to the current situation of the day which, at this point, despite being just a little bit less spectacular, though the supply cuts, and less worth a dramatic mention in a western tv news, was still quite worrying in terms of conflictual and unsolved tensions.

Let’s recall a first basic fundamental at the risk of hurting the most expert public.

A price is a cost as well as it is a revenue.

Of course, the sense of the money simply depends on the role you assume in the economic interaction or “transaction”. In other words, it takes its meaning from the side you hold in the asymmetry. So, a wealthy and responsible customer, who enjoys plenty of technical, operational and financial solutions, is fully aware that, by buying to a supplier, he/she is granting a revenue to the other side. In a continental game over a strategic quantity like energy, this huge amount of cash in which the price is converted is supposed to be the revenue not only of one person, a chief, a leader (a diabolized figure), but of a huge structure of persons, associated by interests, formal links, comparable status, hierarchal solidarities, mirroring behaviour, common implicit and unwritten rules, not to mention a corporate culture etc which, eventually form a ruling class.

This is why such a dimension may be discussed, again and again, since it appears to be problematic for many, in densely populated countries. The length and depth of the indirect consequences of our economic activities, like the conversion of the natural gas into an industrial need, defines the public, would say John Dewey. Not to mention the specific context of the historical background which lays between and behind the two major sides of the asymmetry : Western Europe and Russia.

But, during these 7 h 30 of speeches and discussions, that’s overall an acrimonious tone which prevails. Courtesy is often tainted with irony if not sarcasm, even among officials. In the depicted economic game, the different actors seem to be forced to act the ones with or towards the others in a strictly strained relationship even if all of them are reluctant to do so. The Europeans perfectly assimilated the fact that, by their growing industrial dependancy towards the Eurasian natural gas, they finance a series of eastern actors whose lack of transparency in the business domain can hardly be tempered by any form of contextual dialog. The West, by offering energetic rents to the local elites, is held co-responsible of the economic and political power thus allocated to openly criticized elites.

In the same time, the Eastern economies seem to be trapped in their dependancy to these rents which prevent them from performing deep restructuring reforms, to define more dynamic incentives in the economic and commercial domain. In the end, only the controlling elites appear to enjoy the situation of position in a ceaselessly repeated short term gains vision which offers a high standard of life for the happy few among a low levelled average population.

Roman Kupchinsky

By the remarkable authority with which it is delivered, one of the most impressive speeches is due to the journalist and former head of Radio Svoboda/Radio Liberty Ukraine, Roman Kupchinsky, during the first session (morning of the 7th of March). By depicting with a demonstrative knowledge and a great luxury of details the extreme complication and intrication of the structure or network of private actors playing a role in the supposedly energetic policy of the Kremlin and conquerring strategy towards Europe, he clearly shows how the Russian attempt to take control over the European capacity of transit does not take the form of a block, an army perfectly aligned in a clear battle plan. He illustrates the idea that there is not exactly something like a big monolithic public giant, called Gasprom, promoting and defending abroad the national interests of Russia and operating in a clear and frontal way. Each entity, even if it is a state owned company, created by a Minister, is covered with clans, internal divisions, opposed loyalties, divisive issues.

The conception which emerges from the discussions is that a policy does not necessarily take the form of a clear tactics on a battlefield involving regular troops aligned according to a plan under an obviously identifiable uniform. A policy may be thought in terms not of clear targets and goals but in terms of creating a certain environment and context defined by pressures towards certain gains and letting actors be controlled in their behaviour by the pressures applied to this environment.

In this context, a certain political, decisional and managerial culture shows up. Kupchinsky denounces what, in fact, binds up the different actors, may they be Russian or Ukrainian : a certain style of decision making, like official meetings in the back of the gouvernment to fix up the main transactions, secrecy imposed on the terms of the most important agreements, nomination of weak amateurish persons without background as representatives of intermediary bodies and, therefore, huge interests.

Christoph van Agt

Another great very convincing speech appears during the third session with the intervention of Christoph van Agt who gives a very synthetic approach and adds many practical details revealing, in a certain way, how much the contiental gas industry works against any probability, including against the legal conceptualization.

Anita Orban and David Dusseault

During this very same third session, the comments produced by Anita Orban (Hungary) and David Dusseault (USA) helpfully complete the picture which can be made of the game seen as a whole, from the zones of production in the East to the zones of consumption, in the West.

Olcott

Olcott also very relevantly points out, during the session 2, that the market, in fragile economies like Turmenistan, can’t open up in a blink of an eye, simply because the elites — let’s say that they practice capitalism with a little amount of capital — would be otherwise overwhelmed by foreign capital and would then loose the control of their game. Therefore, they practice a very defensive capitalism in which the control over the energetic rents is vital for them, even if it gives the ground to a very conservative system of relationships and loyalties.

Professor Konoplyanik

Some inteventions, like the one of the Professor Konoplyanik (session 3), despite being more scholar, present the great advantage of bringing some clear reminders of fundamental or practical notions, like the pricing principles for energetic rents or the move of the delivery points from the borders of the Europe-15 to the territory of the Europe-27. To show how much the relationship is placed under the long term contractual perspective in which the West can’t merely complain on the misbehaviour of its bride, Mr Konoplyanik, very justifiably, mentions that the first gas export from the eurasian continent reached Western Europe in 1968, which shows, once more, if it was yet necessary, the reality of the economic links which bound the supposedly opposed camps of the the Cold War, through the iron curtain.

Conclusion

The informative interest of such audiovisual proceedings is the diversity of the points of view. The 5 years which saw Victor Yushchenko coming out of the game and Russia be opposed in a short but dramatic war with Georgia, do not push this documents to history, adding just an interesting distance of observation. A phenomenon like the continental exchange of natural ressources can hardly be resumed by one person, under one approach, one focus. With the huge number of suppliers, intermediaries, consumers, actors, institutional or private, this system of consequent interactions desserves to be analysed with a complex process, served by a panel of competent and even, at times, passionate speakers. This is exactly what this sort of conference can bring to the motivated follower.

There is nothing like a unity of place, time and action here. But rather a strange community of suppliers and consumers based on compromise and gathered around very divisive interests and issues. As a speaker (Olcott) says : I don’t want to say where there is the more corruption.

Couver picture : Major natural gas pipelines from Russia to Europe (text : Wikipedia)
source : By Samuel Bailey (sam.bailus@gmail.com) (Own work) [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)%5D, via Wikimedia Commons

14 thoughts on “A Price Is A Revenue

  1. Greetings, I’m Joni and I’ve recentlyy begun to get involved with what you’re speaking about.
    I am not sure where you’re finding your ideas, but
    solid job even so. I need to spend some time learning and understanding more.
    Thanks for the article: this is just what I was looking for for my search.

    Like

    1. Hello Joni, I thank you very much for your straight appreciation and that’s a pleasure if my article played a modest role in your research.
      I am not at all an expert of this industry. I just try to deliver a well thought comment as anybody has the right to speak, in as coherently a manner as possible, about a topic which can be seen as a public concern and a fundamental element of the public debate.
      As direct consumers of energy or indirect consumers of goods produced thanks to the consumption of energy, we must have a view on such a broad issue, even when we are not experts of a sector.
      Then, I may be wrong in my views and everybody has the right to assess the points I have made.

      Like

  2. Wow that was odd. I just wrote an extremely long comment but after I clicked submit my comment didn’t
    show up. Grrrr… well I’m not writing all that over again.
    Regardless, just wanted to say great blog!

    Like

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    Like

    1. Thank You very much for your appreciation, Sammy. I really try to do my best with the very interesting informative sources and historical archives that we find now on the internet. As an independant commentator, I try to have a non-classical approach and view on the facts but without seeking for the easy appeal of the scandals or the provocative assertions given “per se”.

      Like

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