December 8, 2011
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№ 11 (November 2011)

Editor's Letter

Back to the USSR, You Don’t Know How Lucky You Are!

Pat Davis Szymczak

   I’m writing from Houston this month. And I’ve picked up two books which make interesting reading when read at the same time:
“From Soviets to Putin and Back – The Dominance of Energy in Today’s Russia”, by Michael J. Economides and Donna Marie D’Aleo; and
“Why We Hate the Oil Companies,” by John Hofmeister, former CEO of Shell Oil USA.

   I’d recommend both books – if you read English. In the first, Economides, a former consultant to YUKOS and Mikhail Khodorkovsky describes how the Russian State uses the country’s energy riches as a tool of foreign policy to advance the interests of the State.

   In the second, Hofmeister describes how the United States doesn’t really have an oil policy and how American energy independence and foreign policy is hurt. Politicians in Congress and the White House scapegoat the oil industry for the populist vote. So for example, the President stopped offshore drilling after the Gulf of Mexico oil spill last year – a political play to the environmental lobby. And now Mr. Obama is attempting to defer to after the 2012 election a decision on construction of an oil pipeline from Canada to U.S. refineries in Texas.

   As I’ve been watching on television “ad nauseum” Canada says if the U.S. is not going to agree to take Canadian oil until 2013, Canada will ship its oil to China. And the irony about offshore drilling? Just outside of U.S. territorial waters offshore Florida, China is drilling. As one television commentator noted: U.S. companies can’t drill within U.S. territorial waters but China is drilling just outside and if there is a spill, Florida gets the damage. So how dumb is that?

   Of course the difference in the Russian and the US systems has to do with elections. But could you imagine the Kremlin deferring construction on a pipeline or a drilling project by Rosneft or Gazprom because of fear of losing an election from pressure by the environmental lobby?

   Further to my “Back to the USSR” theme – Dr. Economides knows far more about how that is manifest in the oil business than I do. But as an American Muscovite, I must say I am encountering more and more evidence to support this, from everyday life.

   In late October I attended a press briefing at the Renaissance Moscow Monarch Hotel on Begovyaul. This is a Marriott brand. Just go to the Internet and Google Marriott in Moscow.  If I hadn’t seen it on the Internet, I would have never believed it.  So the press briefing ends at 11 a.m. and I decide to get a cup of coffee and a bowl of soup before heading to my office.

   In the foyer is a very large café and only two tables are occupied. I approach the waitress: “Table for one, please.” She replies, “There is no place” (“Мest nyet!”). I actually started laughing! “But I see 20 empty tables,” I replied. The waitress said: “Maybe, but we are serving a group lunch at noon.” So all I want is a bowl of soup and a cup of coffee. She offers no alternatives but I see the bar across the lobby has tables.

   I ask, “You sure this is a Marriott?” She replies, “Of course.” I ask, “Can I order coffee and a snack at the bar?” “Yes,” she says. So I find a table in the bar area, and the waiter comes to take my order. “A cup of coffee and a bowl of borsch please,” I say. “I can bring you coffee but no borsch, the kitchen doesn’t open until noon,” the waiter says. Again, I ask, “This is a Marriott, right?” He says, “Oh, yes.” So for fun, I ask, “If I were a guest and I wanted to order borsch from my room, are you saying there isn’t any room service?” He replies, “Oh no, you could do that because the room service kitchen is a different kitchen.”

   “This is a Marriott?” I ask and third time. And then I just got a coffee. Fortunately, there is a Chocoladnitza on my route to the office.

   So while Dr. Economides analyzes Russia’s return to Soviet times by how it runs its energy policy; I find the evidence in how difficult it is for a person to order a bowl of borsch and a cup of coffee in the lobby of an international-brand hotel.

   Please keep in mind, I’m not making any value judgments but I must say that at a couple of events I’ve attended here in Houston these last few days, I keep bumping into young Russian energy professionals who say they prefer Houston to Moscow because in the U.S., the system seems to be built “for people” whereas they feel that in Russia, the system is built “for officials.” At a Marriott here, I also couldn’t order borsch but that’s because they don’t have it on the menu in the U.S. So I ordered chicken soup. It didn’t matter what time of day – there was a table and the kitchen was always open.

   I can tell you this much – there is a reason that the U.S. president flies to and from work in a helicopter. If Washington DC police attempted to block traffic the way Moscow police do around the Kremlin at rush hour, there would be a riot! Drivers just wouldn’t stand for it. In Moscow, I had to trade my manual shift car for an automatic transmission because of leg cramps. (And it was a blow to my pride considering that I’ve always enjoyed being one of the very few Americans who actually prefer manual transmissions – they’re more fun to drive.)

See you next month and I hope you enjoy our November issue!

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