Baker Institute experts available to comment on China-Russia gas deal

EXPERT ALERT

David Ruth
713-348-6327
david@rice.edu

Jeff Falk
713-348-6775
jfalk@rice.edu

Baker Institute experts available to comment on China-Russia gas deal

HOUSTON – (May 22, 2014) – China and Russia Wednesday agreed to a major 30-year natural gas deal that would send gas from Siberia by pipeline to China. The announcement caps a decadelong negotiation and is being heralded as a coup for Russian President Vladimir Putin and Chinese President Xi Jinping.

The following energy and China experts at Rice University’s Baker Institute for Public Policy are available to comment on this development and its implications for the future:

• Kenneth Medlock, the James A. Baker III and Susan Baker Fellow in Energy and Resource Economics at the Baker Institute and senior director of the institute’s Center for Energy Studies.

“The question now is whether or not Russia will use natural gas to gain political leverage in broader negotiations,” Medlock said. “That may be difficult when it comes to China. Specifically, China is developing a diversified approach to meeting its own gas demands, with supplies coming from domestic sources, Central Asia, South Asia, liquefied natural gas and now Russia. Indeed, China could arguably be developing a more diversified supply portfolio than even that in the U.S. So, despite greater pending gas exports to Asia, Russia’s ability to use gas as a political tool may be limited in matters to do with China. Nevertheless, at the very least, Russia has demonstrated that the leverage the West has over it on matters of natural gas is minimal at best.”

• Jim Krane, the Wallace S. Wilson Fellow for Energy Studies at the Baker Institute.

“For the rest of the world, the deal is something to watch,” Krane said. “If it comes to fruition, the market effects will have to be reckoned with. Cross-border pipeline projects are notoriously fraught with risk and many never happen. Whatever transpires, Russia’s breakthrough demonstrates that, while many players will vie for the Asian market, Putin will compete with all of them.”

• Steven Lewis, the C.V. Starr Transnational China Fellow at the Baker Institute.

“The Russia to China gas deal is more than just a story of global markets and geopolitics,” Lewis said. “The gas pipeline between China and Russia also represents concrete personal achievements that Vladimir Putin and Xi Jinping can point to in defending their authoritarian policies against criticism from home and abroad. Meanwhile, behind the scenes, the gas deal is a game of spigots: a well-timed effort by both Russia and China to simultaneously inject resources into ailing national oil and gas companies in exchange for new political control over these flagship state enterprises.”

Medlock, Krane and Lewis have written in-depth posts on the China-Russia gas deal for the Center for Energy Studies’ Forbes.com blog: www.forbes.com/sites/thebakersinstitute.

The Baker Institute has a radio and television studio available for media who want to schedule an interview with any of these three experts. For more information, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

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Founded in 1993, Rice University’s Baker Institute ranks among the top 15 university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blogs.chron.com/bakerblog.