Is Moscow's secret oil tank going dry?
A basic reason for nefarious Soviet behavior in Afghanistan and also Iran may be the Kremlin's intense concern over its own deteriorating energy situation. Soviet oil reserves have been considered state secrets since 1947, and no direct estimations have been published in the USSR -- in contrast with disclosures on natural gas and coal reserves, where official figures do exist. Until 1977 the accepted approximation of Soviet proven oil reserves was usually taken to be the British Petroleum Statistical Yearbook, which estimated that Soviet "proven" reserves (in a loose sense) were about 70-80 billion barrels.
But in 1977 the CIA published two reports on Soviet oil prospects that were revolutionary, particularly in the finding that ". . . Soviet proven reserves are 30-35 billion barrels . . . there is no doubt that Russian proven reserves have been falling in recent years and there is little chance that new oil will be discovered during the next few years to appreciably improve the reserves-to-production ratio." This view was affirmed more recently by the CIA's latest publication, "The World Oil Market."
Three rather special conditions govern Soviet energy prospects.
First, of course, is geography and climate. The Soviet Union is so cold that its energy demands are much heavier than ours.The last two winters, for example, in order to save energy, the Soviets have been closing important factories such as nonferrous metal processing plants for two months out of the year.
Second is distance. In addition to the fact that Soviet coal is of poor quality and in extremely deep mines, it is far from the industrial areas where it is required for power generation, heat, etc.
Third is geology. Oil production has been declining in European Russia for five years. And in West Siberia -- which is all that is left -- production has been increasing by modest amounts such as to indicate that no giant fields have been or are being discovered. What is more, the giant fields that do exist will start going into decline within a few years, and new small fields have not been coming in as planned. Overall, Soviet oil production in November of 1979 is said to have been 800,000 barrels per day short of plan.
In late 1979, however, a Swedish consulting firm, Petrostudies of Malmo, published a new report, "Soviet Proven Oil Reserves 1946-80." This was the third in a series of reports by this company; the first two went against the grain of the CIA analysis by arguing that the Soviets would be able to greatly increase production and exports of both fuels through the end of the century. Less credence was given to these reports than to those of the CIA and others.
But the third report, which had taken two years to compile, was said to have used an approach ". . . never used before in the study of Soviet oil reserves which has for the first time made it possible to reconstruct Soviet absolute figures on discovered oil reserves over the past 30 years." The conclusion of the report is that the Soviets have systematically downplayed new oil finds over the past 20 years and that the USSR in fact now possesses the world's largest oil reserves: more than 150 billion barrels, equal to the reserves of Saudi Arabia.
The report notes: "There is no danger at all that the USSR will become a net importer of oil in the next ten years at least, and compete with other nations for the purchase of OPEC oil. On the contrary, the Soviet leadership has a long-term policy to increase oil exports to the West -- particularly refined products -- in order to earn hard currency.
A layman is hard put to say which of these views, the CIA's or Petrostudies', is correct in view of the official secrecy from the Kremlin. Interestingly, it is possible to work diligently through the Soviet published literature and come up with two such different figures.
The CIA viewpoint seems to be the prevailing one at present, since it has become known and confirmed that the Soviets have expressed increasing concern about oil reserves, primarily owing to lack of attention to exploratory drilling. It also seems that Moscow's finding rates have not kept pace with production and that the reserves-to-production ratio has fallen.
If such is the case, and Moscow does indeed become a new oil importer in the coming several years, then its lunge toward the Gulf makes additional sense. Not only could it head off an American intervention in the area but it could more positively protect its own sources of necessary energy. This makes its moves in Iran and Afghanistan all the more comprehensible.