Russia is the world’s largest exporter of energy
Not many people are aware of the fact that Russia is the world’s largest
exporter of energy. Russia has the largest natural gas reserves in the
world, the eighth largest reserves of oil, and the second largest
reserves of coal. Russia is second only to Saudi Arabia in the amount of
oil they export every year. And, energy production in Russia has
increased dramatically just within the past few years. This has been
driven by high oil prices, rising energy use by neighboring countries
such as China, the low cost of producing most minerals, and Russia's
advantageous geographical location in between Europe and Asia which
makes it very easy for them export coal and oil to those countries. In
order to accomodate demand, Russia's coal and mining industry has
developed rapidly, and has been a major factor in the recent revival of
the Russian economy.
However, most of the coal and oil exported from Russia are produced using outdated technology and second rate equipment. Most of the mines in Russia are worn out and actually quite hazardous to work in. And the equipment used in the Russian mining industry is of very poor quality. But now, with a large influx of revenue coming in from energy sales, there are many opportunities for these energy exporting companies to grow and upgrade to better technologies. And this means that U.S. companies will be able to supply their technologically advanced machinery to these Russian companies. Currently, there are no quotas on the amount of coal mining equipment that can be imported into Russia. Customs taxes on equipment that is imported ranges from 5% to 35%, although the percentage of tax charged on most mining equipment is usually at the lower end of this scale.
Russia has the second largest reserves of recoverable coal in the world, and is currently the third largest exporter of black coal. All of the extractive industries in Russia together constitute 33% of Russia’s GDP and account for 60% of Russia's federal budget revenues. These natural resources have been and will continue to be a major driving force of the Russian economy, and will also be invaluable resources in the world market. The role of energy should receive special attention from the U.S. government since as the world’s leading energy importer, the U.S. stands to gain or lose the most when it comes to Russia's continuing development of energy security.