One of the most memorable events of the International Forum on Environmental Management and Conservation of Natural World Heritage, which took place in the city on the Neva River and gathered delegations from 70 countries, was a keynote presentation by leading expert in the field of fuel and energy, rector of the St. Petersburg Mining University Vladimir Litvinenko. Is it possible to find a balance between field development and environmental protection? Whose role in the strategic planning of mineral resources development should be paramount? The state or the specialized companies? Why is it that countries, the subsoil of which is rich in mineral resources, for the most part demonstrate low rates of socio-economic development? Is it really all about the notorious "resource curse"?
Forpost cites excerpts from Vladimir Litvinenko's speech, which provide an answer to these and many other questions.
Backbone of civilizational progress
Litvinenko: Raw materials are the foundation of sustainable development on a planetary scale. The basis of any civilization, in addition to cultural unity, has always been natural resources, or rather the ability of society to extract them efficiently and involve them in processing. Everything we see around us, from the tables you sit at to the high-tech communications system, was created primarily because mining companies extracted minerals from the subsoil, which became the first link in a long process chain of added value.
The problem is that when we have a discussion about ecology or climate change, we often forget about it. And we start discussing only the negative impact that subsoil users or energy facilities have on the biosphere. Yes, this is the most important issue, and we must make every effort to introduce the best available technologies to reduce damage to the environment in the mineral, fuel, and energy sectors. This should undoubtedly be a priority, but by no means the only goal, because we must not forget about the economic component and social development. We all want to preserve existing ecosystems and biodiversity, but let's be honest: we also want to keep the light in our windows burning, without having to pay for it at the last minute.
Personnel are the key to everything
Litvinenko: In the Soviet Union, it was well understood that a specialist capable of working with subsoil resources should be trained for at least five and, in some cases, six years. But then, suddenly appeared an opinion, inspired to us by our Western partners, that this term could be painlessly reduced by two years. Many took this innovation "with flying colors," especially young people, who are often inclined to seek easier ways of life.
The diploma of higher education has turned into a sham, because the level of knowledge and skills of its holder has a priori become lower than that of the graduates of previous years. In other words, the quality of the talent pool of mining and oil and gas companies has dropped dramatically, which has led to a shortage of competent engineers in the labor market. If someone thinks that this is not the biggest problem, and that they will be trained later, let me give you a little analogy. Would you get your teeth treated by a dentist who graduated from medical school in 4 years and then went straight into practice? I highly doubt it, most likely you would look for a specialist who graduated after 6 years of training and then went through an internship and residency.
Our society lives under illusions, believing that it is easier to work in technologically advanced and science-intensive industries, such as operating a drilling rig, than to treat people's teeth. By the way, Germany, which once also joined the Bologna process and had to move its technical universities to the two-level system, continues to train engineers with the old curricula, very similar to the Soviet ones. They are well aware that otherwise the Federal Republic of Germany would simply not be able to retain its status as the driving force of the Eurozone.
But they have another problem. It is no secret that today the consciousness of children and teenagers is influenced not so much by their parents or school as by social networks. The impact of online systems on immature minds, not always capable of serious critical analysis, is often destructive and creates unnatural trends. One of the most fashionable trends nowadays among Western youth is the rejection of everything that in any way goes against the "green" course.
This is, of course, utterly illogical, since all these kids have a phone, a computer, and a huge number of other things whose creation has been detrimental to the environment. Nevertheless, those students who want to pursue a career in mining or processing often become outcasts, and there have been cases where someone has even been boycotted because of this. As a result, Germany has a shortage of about 50% of its own engineers. And Germans are ready to pay any money to have specialists from other countries come to them who can "patch up the holes."
St. Petersburg Mining University has retained the training of specialists in its curricula along with bachelor's and master's degrees. Moreover, we have already reached an agreement with Minister Valery Falkov to increase the plan for enrollment at the specialist level next year by 300 budgetary places at the expense of a similar reduction at the bachelor's level. That is, we are not abandoning the two-tier system of education, but are beginning to gradually transform it to avoid imbalance. This includes the implementation of joint projects with universities from China, India and other countries that are still participants in the Bologna process.
The Neocolonialist System
Litvinenko: Europe's prosperity has long been based on cheap energy from Russia. It was thanks to the enormous spread between the cost of raw materials and end-consumption goods produced in the EU that the Old World managed to gain a serious competitive advantage in the global market. And significantly raise the level of well-being of its citizens.
At the same time, the quality of life of Russians themselves in the 1990s left much to be desired. Hyperinflation, unpaid wages and pensions - all this was primarily the result of a short-sighted policy in the mineral sector. Concession agreements, which our country signed at that time with Western transnational companies, did not assume the involvement of domestic engineering personnel in the mining process, nor the development of our own core technologies. Everything was given to foreigners, and the budget received minimal funds.
The situation changed only after the election of President Vladimir Putin and his decision to abandon production sharing agreements and switch to license agreements that imply mandatory regular payments to the state for subsoil use. The West continued to receive the main rent from monetization of our natural resources at the expense of their involvement in deep processing, nevertheless, it was this step that allowed Russia to get out of the structural crisis of the nineties.
Unfortunately, the governments of many developing countries have not learned from the mistakes we made 30 years ago and continue to cooperate with U.S. and European corporations under concession contracts. As a result, there are profound inequalities in the exploitation and use of natural resources on a planetary scale. The post-industrial powers are building the world economy according to their geopolitical interests, which are to reduce the share of income from industrial production on their own territory and to increase it significantly at the expense of external management of other people's mineral resources.
In this case, the states, the subsoil of which is rich in raw materials, get the minimum rent from its sale, and in parallel they are imposed debts, the servicing of which in the future requires significant costs. That is, the West, which is only 10% of the population of the planet, artificially hinders the socio-economic progress of the rest of civilization. And it is not even going to take into account the interests of that part of the world community which is simply doomed to hunger and poverty in this development paradigm.
So there is no "resource curse", in reality we are only talking about neocolonialism - the desire of the U.S., EU and their allies to put under their control the world's resources. And the inability of their real owners to independently engage in subsoil use at the expense of their own engineering personnel and managers.
The way out is to strengthen state regulation
Litvinenko: The liberal economic model gives the state the role of an observer and protector of borders. It implies that the formation and coordination of business processes within these borders should be left at the mercy of the market, which itself will put everything in its place. This is the essence of the ideology that was imposed on us by the collective West in the 90s and has taken root quite well in our country.
Unfortunately, in reality this rule does not always work. And the volatility and growth of quotations, which we observe today on the raw materials markets, is another proof of this. It is obvious that the world economy is entering a phase of acute crisis, the global relationship between energy, food, water and welfare is broken, which leads to structural inflation across the planet. To a large extent this happens precisely because of the lack of a clear and effective international policy in the field of subsoil use regulation.
However, things are no better at the national level. In different countries various forms of civil-legal relations are now used between governments and extractive companies. But the vast majority of them take into account neither the need to increase reserves, nor the need to create added value, nor the expectations of the local population, including in the sphere of environmental management. There is also no clear state policy aimed at creating mutually beneficial "rules of the game" for business and the state and contributing to more effective management of mineral resources. At the same time, the economy of any state, including our country, can be self-sufficient only with professional market regulation of the process of extraction and growth of reserves.
For example, mining or oil and gas companies now get most of their profits from the export of raw materials, and therefore are not very interested in the construction of processing, in particular oil and gas chemical plants. Such projects, although they are highly profitable, but at the same time require huge financial investments, i.e. are also highly risky. The task of the government is to assess which factors (tax deductions, preferential loans or something else) motivate an investor and create the most favorable business climate. Then determine the specific volume of raw materials from certain deposits that should be involved in deep processing at this enterprise.
The world must change the paradigm from fragmented and often inefficient resource management to a more integrated model. This is all the more important because resource economies, in today's realities, have a special role to play in minimizing environmental problems arising from the exploitation of deposits and improving the quality of life for the entire world population. While about 10 percent of the world's inhabitants live in extreme poverty, about the same number have no access to electricity.
It must be understood that without changing the existing system of consumption at the planetary level, the volume of consumption of minerals will double by 2060. This is largely due to the construction of the infrastructure necessary for the development of renewable energy, since it requires an increase in the volume of production of a whole group of metals, such as copper, nickel and many others. An a priori consequence of the growing demand for them must be the intensification of the search for and exploration of new deposits, as well as the consumption of more and more energy, including fossil fuels.
Taking all of the above into account, we need the optimal model of a transparent and capable state policy in relation to minerals. Only then can minerals, which are inert natural capital, be transformed into human, social and physical capital. Strengthening state regulation is the most effective way to ensure the balance between supply and demand, and thus the sustainability of human development. Including at the expense of minimizing the technogenic impact on nature.