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Export restraints on russian natural gas and raw timber : what are the economic impacts ?

Author

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  • Tarr, David G.

Abstract

Export restraints by the Russian Federation on natural gas and timber have been the source of major controversy between the European Union and the Russian Federation. The analysis of this paper suggests that the export restraints in natural gas very substantially benefit Russia. On the other hand, in raw timber the analysis suggests that a substantial reduction of Russian export taxes would increase Russian welfare. The paper explains that Gazprom has failed to invest adequately, resulting in little development of new gas supplies. The result has been progressively increasing use by Gazprom of Central Asian gas supplies, at progressively higher prices for Russia. The increased prices of gas for Russian consumers have shown that it is crucial for Russia to allow new entrants and to introduce competition in the Russian domestic market. Without export restraints, however, competition among multiple gas suppliers from Russia would erode or eliminate the monopoly profits of the Russian Federation on gas exports. Thus, with a more competitive domestic market, the Russian government would be expected to grant exclusive exporting rights to a single entity (as it presently does with Gazprom) or impose export taxes. Thus, Europe should not expect to achieve cheaper Russian gas as a result of structural reforms within the Russian gas market. A more promising avenue for European energy diversification is new pipeline construction to open up new sources of supply independent of Russia (especially the Nabucco pipeline), and liquefied natural gas purchases.

Suggested Citation

  • Tarr, David G., 2010. "Export restraints on russian natural gas and raw timber : what are the economic impacts ?," Policy Research Working Paper Series 5195, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5195
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    Citations

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    Cited by:

    1. Catherine Locatelli, 2015. "EU-Russia trading relations: the challenges of a new gas architecture," Post-Print hal-01131203, HAL.
    2. Russian Presidential Academy of National Economy and Public Administration authors collective, 2012. "The Consequences of Weak Competition: Quantitative Evaluation and Policy Implications (Think Tank Report)," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 1-49.
    3. Catherine Locatelli, 2013. "Les voies de la réforme du secteur gazier russe," Post-Print halshs-00822857, HAL.
    4. Catherine Locatelli, 2012. "Relations UE-Russie : les enjeux d'une nouvelle architecture gazière," Post-Print halshs-00755640, HAL.
    5. Finn Roar Aune & Rolf Golombek & Arild Moe & Knut Einar Rosendahl & Hilde Hallre Le Tissier, 2015. "Liberalizing Russian Gas Markets: An Economic Analysis," The Energy Journal, , vol. 36(1_suppl), pages 63-98, June.
    6. repec:hal:wpaper:halshs-00853776 is not listed on IDEAS
    7. Hoekman, Bernard & Martin, Will, 2012. "Reducing distortions in international commodity markets : an agenda for multilateral cooperation," Policy Research Working Paper Series 5928, The World Bank.
    8. Shastitko, Andrey E. (Шаститко, Андрей) & Golovanova, Svetlana (Голованова, Светлана) & Kurdin, Alexander (Курдин, Александр) & Novikov, Vadim (Новиков, Вадим) & Pavlova, Natalia (Павлова, Наталья), 2014. "Macroeconomic Effects of Competition Restrictions [Макроэкономические Эффекты Ограничений Конкуренции]," Published Papers om18, Russian Presidential Academy of National Economy and Public Administration.
    9. Shastitko, Andrey E. & Golovanova, Svetlana & Kryuchkova, Polina & Kurdin, Alexander & Novikov, Vadim & Pavlova, Natalia, 2013. "Effects of Weak Competition: Quantitative Assessment and Policy Implications," Published Papers dok31, Russian Presidential Academy of National Economy and Public Administration.
    10. Ménard, Claude & Kurdin, Alexander & Shastitko, Andrey, 2020. "Out by the door, in through the window: Politics and natural gas regulation in Russia," Utilities Policy, Elsevier, vol. 64(C).
    11. Tsatsos, Aristidis, 2012. "Die Liberalisierung des russischen Gassektors: 3 Szenarios? [The liberalisation of the Russian gas sector: 3 scenarios?]," MPRA Paper 44623, University Library of Munich, Germany.
    12. Locatelli, C. & Abbas, M., 2019. "Interdépendance complexe et hybridation des modèles institutionnels nationaux : le cas des relations énergétique UE-Russie," Working Papers 2019-02, Grenoble Applied Economics Laboratory (GAEL).
    13. Catherine Locatelli, 2015. "EU-Russia trading relations: the challenges of a new gas architecture," European Journal of Law and Economics, Springer, vol. 39(2), pages 313-329, April.
    14. Catherine Locatelli, 2020. "Une lecture institutionnaliste de la réforme du secteur gazier russe," Working Papers hal-02734835, HAL.
    15. Catherine Locatelli, 2014. "The Russian gas industry : challenges to the "Gazprom model"," Post-Print halshs-00853776, HAL.
    16. Kurdin, Alexander (Курдин, Александр), 2017. "Regulation of Enterprise Prices: Application Areas, Mechanisms and Methods of Regulation, Impact on Competition (Case Study of Gas Industry) [Регулирование Цен Предприятий: Области Применения, Меха," Working Papers 031703, Russian Presidential Academy of National Economy and Public Administration.
    17. Kenji Fujiwara, 2014. "Tax Principles and Coordination of Trade and Domestic Policies Under Imperfect Competition," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 29-40, June.
    18. Christophe Heyndrickx & Victoria Alexeeva-Taleebi & Natalia Tourdyeva, 2014. "To raise or not to raise: Impact assessment of Russia's gas price reform," ERSA conference papers ersa14p1535, European Regional Science Association.
    19. Heyndrickx, Christophe & Alexeeva-Talebi, Victoria & Tourdyeva, Natalia, 2012. "To raise or not to raise? Impact assessment of Russia's incremental gas price reform," ZEW Discussion Papers 12-052, ZEW - Leibniz Centre for European Economic Research.
    20. Locatelli, C., 2020. "Une lecture institutionnaliste de la réforme du secteur gazier russe," Working Papers 2020-04, Grenoble Applied Economics Laboratory (GAEL).
    21. Catherine Locatelli & Mehdi Abbas, 2019. "Interdépendance complexe et hybridation des modèles institutionnels nationaux : le cas des relations énergétiques UE-Russie," Working Papers hal-02100098, HAL.

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