The current energy strategy of Russia is partially based on a decision adopted at the 1970s. Russia's current fuel balance (natural gas supplies up to 70% of fuel demand and 45% of energy output) is a result of so called "gas pause" strategy. Forty years ago - when the giant deposits of Western Siberia started to produce gas - they decided that the country would benefit the cheap gas and most of the power plants were modernized for gas utilization. This is a well-known fact that explains why natural gas is the key fuel now in Russia.

But another - less-known - decision was also adopted that time: to use the gas benefits period for developing new methods coal burning efficiency increase, and to return to coal as the key fuel after the "gas pause". They planned to do it by the mid 1990s. Such strategy assumed i) the era of cheap gas would end later or sooner, and ii) Russia would operate coal deposits with much larger reserves than natural gas deposits (in fuel equivalent).

The first part of the strategy - transfer of the country's economy to gas - was realized successfully and Russia benefits cheap gas for domestic use for more than thirty years. But the second part - development of coal-burning technologies and return to coal consumption - has been delayed for more than 15 years. Currently it's clear that the period of gas low domestic prices will end in 2-3 years; moreover there is possibility that Russia may meet a lack of gas for internal consumption.

Since 2006 Russia's coal industry meets interest from the national and global players who look at coal as the most prospective fuel for energy production in the country. 

For last six years Ignatov & Company predicts such splash of interest in coal - and it is a reason why we support "Coalmining in Russia" project since 2005. The current situation confirms we were right in our forecast - and we are glad that for past years we could become the leading providers of Russia's coalmining information for the global investors and miners.