UBC Theses and Dissertations

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UBC Theses and Dissertations

The Natural gas industry of the U.S.S.R. Dienes, Leslie 1965

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THE NATURAL GAS INDUSTRY OF THE USSR by LESLIE DIENES B.A., U n i v e r s i t y o f M c G i l l , 1963 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS- FOR THE DEGREE OP MASTER OF ARTS' i n the Department of GEOGRAPHY We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o the r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA A p r i l , 1965 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t of the requ i rements f o r an advanced degree at the U n i v e r s i t y of B r i t i s h Co lumbia, I agree that the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s tudy, I f u r t h e r agree that p e r -m i s s i o n f o r ex tens i ve copy ing of t h i s t h e s i s f o r s c h o l a r l y purposes may be granted by the Head of my Department or by h i s r e p r e s e n t a t i v e s . I t i s understood that copy ing or p u b l i -c a t i o n of t h i s t h e s i s f o r f i n a n c i a l g a in s h a l l not be a l lowed without my w r i t t e n pe rm i s s i on * Department of The U n i v e r s i t y of B r i t i s h Co lumbia, Vancouver 8„ Canada i i A B S T R A C T i i i The l a s t few y e a r s have w i t n e s s e d momentous d e c i s i o n s i n S o v i e t f u e l p o l i c y . A f t e r l o n g n e g l e c t , a sudden and a l l out p r i o r i t y was g i v e n t o the p r o d u c t i o n o f p e t r o l e u m and n a t -u r a l gas, and the c r e a t i o n o f a massive p e t r o c h e m i c a l i n d u s t r y was o r d e r e d . The o f f i c i a l s u p p ort and the e c o n o m i c a l l y more r a t i o n a l c l i m a t e o f the p o s t - S t a l i n decade proved a tremendous "boon t o the gas, o i l and p e t r o c h e m i c a l i n d u s t r i e s . I n compo-s i t i o n t he f u e l s t r u c t u r e o f the USSR i s f a s t a p p r o a c h i n g t h a t o f the U n i t e d S t a t e s , and the p e t r o c h e m i c a l b u i l d - u p — though y o u n g e r — i s a l s o v i g o r o u s . The new f u e l p o l i c y has a l r e a d y put i t s mark on the map o f the c o u n t r y , b u t the f u l l impact i s y e t t o come. The S o v i e t energy p i c t u r e , t h e r e f o r e , i s i n a s t a t e o f f l u x and f u r i o u s development, and the same goes f o r the c h e m i c a l i n d u s t r y . The new f u e l s have n o t y e t had time t o c r e a t e a c r y s t a l l i z e d and mature g e o g r a p h i c p a t t e r n , as i n the U n i t e d S t a t e s , but s u c h a p a t t e r n i s i n emergence and can now be examined. T h i s paper d e a l s w i t h the p o s i t i o n o f n a t u r a l gas i n t h e new S o v i e t f u e l geography and, i n a d d i t i o n , con-s i d e r s i t s c o n t r i b u t i o n t o t h e emerging p e t r o c h e m i c a l i n d u s t r y of the USSR. S i n c e the e a r l y f i f t i e s the n a t u r a l gas i n d u s t r y , w h i c h was c o m p l e t e l y undeveloped t h r o u g h o u t the S t a l i n e r a , e x per-i e n c e d a gro w t h , the r a t e o f w h i c h exceeded a l l o t h e r branches of the f u e l i n d u s t r y o f the USSR. C o n t r i b u t i n g l e s s than one-f o r t i e t h to the f u e l mix as l a t e as 1955, i t s share has grown to an e i g h t h i n 1963 and i s c l o s e t o a s i x t h t o d a y . The S o v i e t U n i o n i 3 thought to have f a r g r e a t e r r e s o u r c e s o f gas th a n any .iv o t h e r c o u n t r y i n t h e w o r l d but i t s f u l l y p roved r e s e r v e s a r e s t i l l o n l y a q u a r t e r of those of the U n i t e d S t a t e s . Over e i g h t y p e r c e n t of p r o d u c t i o n today comes from o n l y t h r e e r e g i o n s , a l l i n European R u s s i a , y e t t h e a r e a l d i s c o r d -ance between p r o d u c t i o n c e n t e r s and t h e major consuming a r e a s i s q u i t e c o n s i d e r a b l e . W i t h one or two e x c e p t i o n s , the i n d u s -t r i a l c e n t e r s of t h e c o u n t r y have no o u t p u t on t h e i r own and g e n e r a l l y a r e l o c a t e d f a r f rom s u p p l y i n g f i e l d s . T h i s a r e a l d i s c o r d a n c e and, c o n s e q u e n t l y , the l a r g e - s c a l e t r a n s p o r t o f n a t u r a l gas over g r e a t d i s t a n c e s a r e i n c r e a s i n g , as t h e immense r e s e r v e s , b e l i e v e d t o e x i s t s o u t h and e a s t o f the U r a l s , a r e proved and b r o u g h t i n t o p r o d u c t i o n . The amount consumed, the s h a r e o f gas i n the f u e l mix, and the s e c t o r i a l d i s t r i b u t i o n o f consumption d i f f e r g r e a t l y i n each economic r e g i o n . However, the share of i n d u s t r y ( t h e g e n e r a t i o n o f e l e c t r i c i t y i n c l u d e d ) everywhere p r e d o m i n a t e s , and f a r more h e a v i l y t h a n i n the U n i t e d S t a t e s . V a r i a t i o n s i n the amount consumed and the manner of u t i l i z a t i o n l e n d a d i s -t i n c t n e s s of c h a r a c t e r t o t h e gas i n d u s t r y i n each S o v i e t r e -g i o n . N e v e r t h e l e s s , s i m i l a r i t i e s i n c e r t a i n a r e a s a r e g r e a t enough t o p e r m i t r e g i o n a l g r o u p i n g s . The essay c o n s i s t s o f two main p a r t s : a g e n e r a l and a r e g i o n a l . I n P a r t I the e v o l u t i o n of S o v i e t f u e l p o l i c y , the p r o d u c t i o n o f , and markets f o r , n a t u r a l gas, the c h a r a c t e r i s t i c s o f S o v i e t r e s e r v e s and, f i n a l l y , the R u s s i a n p i p e l i n e network a r e c o n s i d e r e d . P a r t I I examines the p r i n c i p a l r e g i o n s where gas i s produced and i s u t i l i z e d , a t t e m p t s an i n t e g r a t e d t r e a t -ment o f the r o l e o f gas i n t h e r e g i o n a l economy, and a n a l y s e s i n t e r r e g i o n a l v a r i a t i o n s . Because the r e s e a r c h done so f a r on t h a t v e r y young i n d u s t r y u s u a l l y t r e a t s i t on a n a t i o n a l p l a n e , th e a n a l y s i s o f r e g i o n a l p r o f i l e , a t t e m p t e d i n P a r t I I , i s con-s i d e r e d to be t h e major c o n t r i b u t i o n o f t h i s p a p e r . x i v ACKS'OT/LEDGMENT I w i s h t o e x p r e s s my g r a t i t u d e t o D r . D. J . Hooson and Dr . J . D. Chapman f o r t h e i r a d v i c e and c r i t i c i s m i n the w r i t i n g and o r g a n i z a t i o n o f t h i s t h e s i s . I am a l s o i n d e b t e d t o D r . W. i£. A r m s t r o n g , Dean of M e t a l l u r g y , and D r . H. M. M c l l r o y , Department of M e c h a n i c a l E n g i n e e r i n g , f o r t h e i r h e l p i n some o f the t e c h -n i c a l q u e s t i o n s i n v o l v e d . S p e c i a l t h a n k s a r e due t o D r . R o b e r t C ampbell of I n d i a n a U n i v e r s i t y who made a c h a p t e r o f h i s f o r t h -coming book on the economics of S o v i e t o i l and gas a v a i l a b l e t o me. F i n a l l y , I am g r a t e f u l t o my w i f e , J e n n i e , who drew most o f my maps and a s s i s t e d me throughout the work. v i TABLE OF CONTENTS PART I - GENERAL SECTION I THE EVOLUTION OP SOVIET FUEL POLICY 1 E f f e c t of the New F u e l P o l i c y on the N a t u r a l Gas Ind u s t r y 7 The New F u e l P o l i c y i n World P e r s p e c t i v e 10 Re g i o n a l D i s t r i b u t i o n o f S o v i e t N a t u r a l Gas P r o d u c t i o n 12 I I MARKETS FOR NATURAL GAS 18 I n d u s t r i a l Uses of N a t u r a l Gas 22 The Use of Gas i n E l e c t r i c S t a t i o n s 24 The Use of Gas i n the I r o n and S t e e l Industry 27 N a t u r a l Gas i n the Chemical Industry 32 Household and M u n i c i p a l Consumption 41 I I I RESERVES 44 IV TRANSPORT 66 PART I I - REGIONAL SECTION 87 "V CONSUMING REGIONS 93 The C e n t r a l Region 94 The L e n i n g r a d Region 108 The B a l t i c R e p u b l i c s and B y e l o r u s s i a 115 VI REGIONS WHICH PRODUCE AND CONSUME 126 The G r e a t e r Ukraine 127 The V o l g a Region 138 The Transcaucasus 150 V I I PRODUCING REGIONS 159 The N o r t h Caucasus 160 C e n t r a l A s i a 167 V I I I POTENTIAL REGION — SIBERIA AND NORTHERN KAZAKHSTAN 180 v i i REGIONAL COST ANALYSIS 193 CONCLUSION 216 BIBLIOGRAPHY 225 APPENDIX TABLES 235 v i i i LIST of TABLES Table I Table I I Table I I I Table IV Table V Table VI Table V I I Table V I I I Table IX Table X Table X I Table X I I Table X I I I Table XIV Table XV Table XVI Table XVII Table X V I I I F u e l P r o d u c t i o n i n R u s s i a and the USSR (1913-1963) 3 P r o d u c t i o n of Gas i n the USSR 9 R e g i o n a l Breakdown of N a t u r a l Gas P r o d u c t i o n 13 Consumption of N a t u r a l Gas by S e c t o r s of Economy 21 Average Chemical Consumption of Gases i n the Major S o v i e t D e p o s i t s 40 Reserves of N a t u r a l Gas 48 Cost of T r a n s p o r t i n g V a r i o u s P u e l s over a D i s t a n c e of 1000 km. 70 Transport Costs of N a t u r a l Gas over P u l l Length of C e r t a i n Major P i p e l i n e s 77 Seasonal P l u c t u a t i o n over Major S o v i e t Gas P i p e l i n e s 81 P o r e c a s t of Moscow C i t y * s P u e l Mix i n 1966 104 The Use of N a t u r a l Gas i n the B l a s t Fur-naces of the Ukraine — Reduction of Coke Consumption 132 Consumption of N a t u r a l Gas by S e c t o r s of Economy i n Sa r a t o v O b l a s t 144 Cost of E t h y l e n e i n the Volga Region from Three D i f f e r e n t Sources 146 D r i l l i n g f o r Gas and Increase of Reserves i n the Uzbek SSR and i n the USSR as a I h o l e 170 P u e l Consumption by Thermal S t a t i o n s i n C e n t r a l A s i a 172 Cost of V a r i o u s P u e l s i n the USSR 195 E x t r a c t i o n Costs of N a t u r a l Gas, i n c l u d i n g T r a n s p o r t Cost by P i e l d G a t h e r i n g System 196 Costs of V a r i o u s Puels and Required C a p i t a l Investments i n the Major Regions of the UBSR (1959) 199 i x T able XIX Table XX Table XXI Table XXII P r o j e c t e d Costs of Vari o u s P u e l s i n 1965 a t Major Consuming Centers of the USSR and Re g i o n a l C a p i t a l Investment 200 Cost of LPS and N a t u r a l G a s o l i n e i n Gas-P r o c e s s i n g P l a n t s of the USSR 203 T e n t a t i v e Costs of Carbamide and Methyl A l c o h o l (from N a t u r a l Gas) i n V a r i o u s Regions 209 Cost I n d i c e s of A c e t y l e n e , E t h y l e n e , and Propylene i n Va r i o u s Regions of the USSR 211 X LIST o f APPENDIX TABLES T a b l e I T a b l e I I T a b l e I I I T a b l e IV T a b l e V T a b l e V I Tab l e V I I T a b l e V I I I T a b l e I X T a b l e X T a b l e X I T a b l e X I I T a b l e X I I I The F u e l M i x o f the U n i t e d S t a t e s from 1 8 8 0 - 1 9 2 0 2 3 6 G r o s s Consumption of Commercial S o u r c e s of Energy i n the World ( 1 9 2 9 - 1 9 5 0 ) 2 3 ? T e c h n i c a l I n d i c e s of B l a s t F u r n a c e Opera-t i o n w i t h and w i t h o u t N a t u r a l Gas 2 3 8 T r a n s p o r t C o s t o f N a t u r a l Gas 2 3 9 Cost S t r u c t u r e of N a t u r a l Gas T r a n s p o r t over the K i e v Network 2 4 0 Cost S t r u c t u r e o f N a t u r a l Gas E x t r a c t i o n 2 4 1 P r o j e c t e d C o s t s o f N a t u r a l Gas and C o a l i n 1 9 6 5 a t M a j o r Consuming C e n t e r s — Investment R e q u i r e d 2 4 2 C o s t I n d i c e s o f V i n y l C h l o r i d e i n V a r i o u s R e g i o n s 2 4 3 C o s t I n d i c e s o f A c e t a l d e h y d e Produced f r o m A c e t y l e n e and E t h y l e n e i n V a r i o u s R e g i o n s 2 4 3 P r o j e c t e d C o s t s and C a p i t a l Investment o f A c e t y l e n e i n V a r i o u s R e g i o n s 2 4 4 P r o j e c t e d C o s t s o f O l e f i n s i n V a r i o u s R e g i o n s 2 4 4 P r o j e c t e d C o s t s o f V i n y l C h l o r i d e and V i n y l A c e t a t e from N a t u r a l Gas and P e t r o l e u m P r o d u c t s i n V a r i o u s R e g i o n s 2 4 5 P r o j e c t e d C o s t s o f Some Other P e t r o c h e m i c a l P r o d u c t s i n Two R e g i o n s 2 4 6 x i LIST OF HAPS Map 1 R e s e r v e s and P r o d u c t i o n o f N a t u r a l Gas i n the USSR 15 & 49 Map 2 R e s e r v e s and P r o d u c t i o n of N a t u r a l Gas i n the European USSR 16 & 50 i Map 3 R e s e r v e s and P r o d u c t i o n of N a t u r a l Gas i n t h e A s i a t i c USSR 17 & 51 Map 4 P e t r o l i f e r o u s P r o v i n c e s o f t h e USSR 53 Map 5 Major Gas P i p e l i n e s o f the USSR 74 Map 6 R e g i o n a l F u e l M i x i n the USSR 89 Map 7 The Energy S u p p l y o f the C e n t r a l R e g i o n 95 Map 8 The Energy S u p p l y o f the L e n i n g r a d and B a l t i c R e g i o n s 109 Map 9 The U r a l R e g i o n 121 Map 10 The G r e a t e r U k r a i n e 128 Map 11 The V o l g a R e g i o n 139-Map 12 The Tran s c a u c a s u s 151 Map 13 The N o r t h Caucasus 161 Map 14 C e n t r a l A s i a 167 Map 15 S i b e r i a and N o r t h e r n K a z a k h s t a n 182 Map 16 S o u t h e r n S i b e r i a and N o r t h K a z a k h s t a n 183 x i i NOTE ON SOURCES There i s e x t e n s i v e and a p p a r e n t l y r e l i a b l e s t a t i s t i c a l d a t a a v a i l a b l e on the S o v i e t f u e l i n d u s t r i e s , and over the la.st decade the p r o b l e m of a r a t i o n a l f u e l mix has a l s o been exam-i n e d by a s m a l l number of S o v i e t s c h o l a r s . The n a t u r a l gas i n d u s t ^ , however, i s so young t h a t most w o r t h w h i l e i n f o r m a -t i o n on i t i s r e s t r i c t e d t o the 1960*s. Today one f i n d s a r e l a t i v e abundance of m a t e r i a l on d r y n a t u r a l gas, but s o u r c e s a r e s t i l l e x t r e m e l y s c a n t y on o i l - w e l l g a s e s , n a t u r a l gas l i q u i d s and t h e i r use as p e t r o c h e m i c a l f e e d s t o c k s . Owing to the v e r y y o u t h of the i n d u s t r y , R u s s i a n t e r m i n o l o g y i s some-t i m e s i n c o n s i s t e n t , e s p e c i a l l y c o n c e r n i n g n a t u r a l gas l i q u i d s and p e t r o c h e m i c a l s . T h i s makes i n t e r p r e t a t i o n and comparisons o c c a s i o n a l l y v e r y d i f f i c u l t . S o v i e t w r i t e r s g e n e r a l l y emphasize p r o d u c t i o n over con-sumption i n t h e i r works, and s t a t i s t i c a l d a t a i s l a c k i n g on many a s p e c t s o f consumption w h i c h a s t u d e n t o f the S o v i e t f u e l i n d u s t r i e s -would be i n t e r e s t e d to know. What e x i s t s on the u t i l i z a t i o n of n a t u r a l gas i s found almost e x c l u s i v e l y on an a i l - U n i o n b a s i s , a,nd the r e g i o n a l p a t t e r n o f consumption i s e x t r e m e l y d i f f i c u l t to g e t . P o r t h i s r e a s o n , the m a t e r i a l l e n d s i t s e l f more e a s i l y to an economic t h a n a g e o g r a p h i c an-a l y s i s . R e c e n t l y S o v i e t economists have shown c o n s i d e r a b l e s o p h i s t i c a t i o n i n t h e i r t r e a t m e n t of the economic e f f e c t s o f a l t e r n a t i v e uses f o r gas, but l i t t l e has been done y e t t o examine the r e g i o n a l p r o f i l e of t h e gas i n d u s t r y i n d e t a i l . x i i i The i r r a t i o n a l i t y of Soviet int e r n a l "boundaries pre-sents the greatest d i f f i c u l t y to the l a t t e r . The boundaries of major economic regions frequently break up economically homogeneous and t i g h t l y - k n i t areas. Considerable juggling and transforming of data are frequently required i n order to ar r i v e at reasonably accurate figures for more meaningful regions. In the writing of t h i s thesis extensive use had to "be made of technical materials. These included the chief gas and o i l journals of the USSR and the United States, chemical p e r i o d i c a l s and publications. Much valuable information was gained, mainly f o r the regional section, from economic and geographic publications and from newspaper a r t i c l e s . PART I GENERAL SECTION la Chapter I THE EVOLUTION OF SOVIET FUEL POLICY D e s p i t e h e r l e s s d e v e l o p e d economy and s m a l l e r a b s o l u t e p r o d u c t i o n o f energy, on t h e eve o f the F i r s t W o r l d War, T s a r i s t R u s s i a c o u l d i n some ways b o a s t a more "modern" f u e l mix than the U n i t e d S t a t e s . W h i l e i n the l a t t e r c o u n t r y c o a l a c c o u n t e d f o r 80 per c e n t o f a l l energy p r o d u c t i o n and o i l and gas m e r e l y 1 8 per c e n t , i n R u s s i a the share of c o a l s t o o d a t about 50 per c e n t and t h a t of o i l about 30 per c e n t . B o t h n a t i o n s were a l r e a d y moving away from wood a t a s w i f t pace, though i n R u s s i a i t s t i l l s u p p l i e d c l o s e t o a f i f t h of a l l energy, a share t w i c e as l a r g e as i n the U n i t e d S t a t e s . F o l l o w i n g the r e c o v e r y from the r a v a g e s of war, r e v o l u t i o n and c i v i l s t r i f e , the semi-c a p i t a l i s t i c Hew Economic P o l i c y f u r t h e r s t i m u l a t e d the u t i l i -z a t i o n o f more e f f e c t i v e f u e l s . I n 1928, the share o f o i l a g a i n reached c l o s e to o n e - t h i r d , and the p r o d u c t i o n of n a t u r a l 2 gas a l s o s t a r t e d . B e f o r e 1900, perhaps the g r e a t e r p o r t i o n o f R u s s i a ' s o i l was e x p o r t e d and d i d n o t e n t e r i n t o the d o m e s t i c f u e l mix. By the l a s t decade o f T s a r i s t r u l e , however, o n l y a s m a l l s h a r e o f the o u t p u t went abroad: 8 per c e n t i n 1908 3 and about a t e n t h i n 1913. Most of the o u t p u t , t h e r e f o r e , was consumed a t home. 1 Sam H. S c h u r r and B r u c e C. N e t s c h e r t : Energy i n the  A m e r i c a n Economy. John H o p k i n s P r e s s , B a l t i m o r e , I 9 6 0 , p. 497 T a b l e I I . 2 F o r s o u r c e s , see Table I . 3 Narodnoye Khozyaystvo SSSR v 1958 godu. S t a t i s t i c h e s k i y e z h e g o d n i k , Moskva, 1959, p. 208 and 802; S.D. P e l r d : E d i n y y  E n e r g e t i c h e s k i y B a l a n s Narodnogo K h o z y a y s t v o . I z d a t e l ' s t v o 'Ekonomika', Moskva, 1964, p. 283. 3. Table I F u e l P r o d u c t i o n i n R u s s i a and the USSR ( a l l f u e l s are converted to "nominal f u e l " : 1 ton=7000 C a l o r i e s ) Year A l l f u e l s C o a l O i l N a t u r a l Peat Shale Wood gas ( i n c l u d -i n g o i l w e l l gases)  M i l l i o n tons 1913(within 48.2 23.1 14.7 0.7 9.7 presen t boundaries) 1913(within .45.9 23.1 13.2 0.7 8.9 int e r - w a r boundaries) 1940 237.7 140.5 44.5 4.4 13.6 0.6 34.1 1945 185.0 115.0 27.8 4.2 9.2 0.4 28.4 1950 311.2 205.7 54.2 7.3 14.8 1.3 27.9 1955 479.9 310.8 101.2 11.4 20.8 3.3 32.4 1958 616.4 362.1 161.9 33.9 21.1 4.5 32.9 1960 692.8 373.1 211.4 54.4 20.4 4.8 28.7 1963 845.3 388.5 294.7 105.1 21.8 6.5 28.7 Percent of t o t a l 1 913(within 100 48 30.5 •* • tm 1.4k •» » 20.1 presen t boundaries) 1913(within 100 50.3 28.8 1.5 •» «• mm 19.4 inter-war boundaries) 1928(inter-war 100 52.0 30.8 0.6 4.1 12.5 boundaries) 1940 100 59.1 18.7 1.9 5.7 0.3 14.3 1950 100 66.1 17.4 2.3 4.8 0.4 9.0 1955 100 64.8 21.1 2.4 4.3 0.7 6.7 1958 100 58.8 26.3 5.5 3.4 0.7 5.3 1960 100 53.9 30.5 7.9 2.9 0.7 4.1 1963 100 46.0 34.9 12.4 2.5 0.8 3.4 Sources: Promyshlennost* SSSR. 1963. T s e n t r a l ' n o y e S t a t i s t i c h e s k o y e U p r a v l e n i y e , Moskva, 1964, p. 191; Narodnoye  Khozyaystvo SSSR v 1958 godu.» p. 200. Por 1928: S. P e l d : "Ob ekonomicheskom balanse narodnogo khozyaystva," Voprosy Ekonomiki, No. 3, 1960, Table 6. 4. I t i s , o f c o u r s e , p o s s i b l e t h a t the q u i c k e n i n g pace of i n d u s t r i a l development and a sharp i n c r e a s e i n f u e l consumption--s t i l l v e r y low i n a b s o l u t e t e r m s — would have r a i s e d somewhat the share of c o a l , r e l a t i v e to p e t r o l e u m and gas, i n the n a t i o n ' s energy s u p p l y . Indeed, the output of o i l had reached a peak i n the f i r s t f i v e y e a r s of the c e n t u r y , w h i c h i t d i d n o t r e a c h a g a i n u n t i l 1927. But the growth of c o a l p r o d u c t i o n 4 was r a p i d and, i n a d d i t i o n , unbroken u n t i l the R e v o l u t i o n . Y e t , t h e r a p i d growth of t h e o i l i n d u s t r y and the h i g h share of l i q u i d f u e l s i n the n a t i o n ' s energy s u p p l y was j u s t t o o s t r i k i n g t o be d i s m i s s e d a s a f l a s h - i n - t h e - p a n development. I t seems t h a t R u s s i a began i t s b e l a t e d I n d u s t r i a l R e v o l u t i o n w i t h an a l r e a d y "modern" f u e l mix, w h i c h — o t h e r t h i n g s r e m a i n i n g e q u a l - - would p e r s i s t . I t was a f u e l s t r u c t u r e w h i c h the U n i t e d S t a t e s would reach--though On an enormously g r e a t e r ab-s o l u t e s c a l e — o n l y i n the l a t e 1920's and Western Europe o n l y i n t h e l a s t decade. T h i s s u r p r i s i n g l y modern e a r l y energy s t r u c t u r e o f R u s s i a d i d n o t c o n t i n u e unbroken. The S t a l i n e r a was an un-q u e s t i o n a b l e s e t - b a c k f o r l i q u i d and gaseous as compared t o s o l i d f u e l s . A l t h o u g h o u t p u t o f p e t r o l e u m and n a t u r a l gas was g r a d u a l l y r i s i n g , the g r o w t h of p r o d u c t i o n was much s l o w e r t h a n i n t h e case of c o a l , s h a l e and p e a t . As a r e s u l t , i n the _ Narodnoye K h o z y a y s t v o SSSR v 1958 godu. p. 201 and 208. 5. f u e l mix of the USSR, the share of o i l and gas comprised l e s s t h a n a f i f t h of the t o t a l i n 1950-- an a l l - t i m e low even i f one i n c l u d e s the y e a r s of the C i v i l War. E s p e c i a l l y a f t e r 1935, S t a l i n a l s o f o r c e d the p r o d u c t i o n o f low q u a l i t y " l o c a l f u e l s " — l i g n i t e s , peat and s h a l e — i n a r e a s f a r f r o m major c o a l "basins, and even i n r e g i o n s where the presence o f o i l and/or gas was a l r e a d y known. The output of v e r y e x p e n s i v e , low q u a l i t y l i g n i t e s f r o m the U r a l i a n , C e n t r a l A s i a n and, e s p e c i a l l y , Moscow B a s i n s s o a r e d , w h i l e t h r o u g h o u t the 1950's the m i n i n g of s h a l e c o n t i n u e d i n the S y z r a n ( V o l g a ) and S t a v r o p o l ' ( N o r t h Caucasus) 5 r e g i o n s . The combined share o f l o c a l f u e l s r o s e i n r e l a t i v e i m p o r t a n c e , and i n 1950 c o n s t i t u t e d a s e v e n t h o f the n a t i o n ' s 6 energy b a l a n c e . Y e t t h e s e f u e l s — n o t a b l y p e a t - - appear t o 7 have been s u b s i d i z e d . T h i s o u t d a t e d f u e l mix was n o t due t o i g n o r a n c e about th e p o t e n t i a l i t i e s of the c o u n t r y ' s p e t r o l e u m and gas r e s e r v e s . A l t h o u g h t h e r e was p e s s i m i s m i n c e r t a i n q u a r t e r s , many l e a d i n g g e o l o g i s t s e x h i b i t e d an e a r l y awareness about the r i c h e s o f the S o v i e t s e d i m e n t a r y b a s i n s . E x c e l l e n t g e o l o g i c a l and g r a v i -m e t r i c s t u d i e s i d e n t i f i e d the s u b t e r r a n e a n s t r u c t u r e s o f most of European R u s s i a , M i d d l e A s i a , even p a r t o f Western S i b e r i a , 5 S. L i s i c h k i n & L. Tomashpol'sky t "Nekotorye m e t o d o l o g i -c h e s k i y e v o p r o s y t o p l i v n o - e n e r g e t i c h e s k i k h b a l a n s o v , * Voprosy  E k o n o m i k i , 1962, No. 11, pp. 48-49. 6 D. B. S h i m k i n : S o v i e t M i n e r a l - F u e l I n d u s t r i e s . U. S. D ept. of Commerce, Washington, 1962, p. 82, T a b l e I I I ; p. 85, Table V I I and p. 33. 7 I b i d . , pp. 43-45. 6. and the probable e x i s t e n c e and approximate whereabouts of huge o i l and gas d e p o s i t s were g e n e r a l l y known by the m i d - t h i r t i e s . Y e t t h i s d i d not l e a d to quick s e i s m i c mapping and vigorous 8 e x p l o r a t o r y d r i l l i n g f o r l a c k of o f f i c i a l support. Only the t e r r i b l e l e s s o n s of World War I I quickened, f i n a l l y , the pace of p r o s p e c t i n g , though even i n the m i d - f i f t i e s the amount of d r i l l i n g was s m a l l by American standards. T h i s t r e n d was c o n t r a r y to t h a t which was f o l l o w e d by the U n i t e d S t a t e s from the e a r l y twenties onward, and some f i f t e e n y e a r s l a t e r , a t a slower pace, even by the world a t l a r g e . The development of S o v i e t energy p r o d u c t i o n between 1928 and 1955 resembled not the contemporary trend i n the U n i t e d S t a t e s , but t h a t p r e v a i l i n g between 1880 and the end of the F i r s t World War (see Appendix, Table I ) . S o v i e t f u e l p o l i c i e s were based on non-economic c o n s i d e r a t i o n s - - on p o l i t i c a l and i d e o l o g i c a l b e l i e f s , such as r e g i o n a l autarky and the f o r c e d development of f e r r o u s m e t a l l u r g y , and r e f l e c t the b u r e a u c r a t i c b l u n d e r s f r e q u e n t i n an o v e r - c e n t r a l i z e d economy. The f a i l u r e to base f u e l p o l i c y on g e n u i n e l y economic grounds and thus favour the growth of the petroleum and gas i n d u s t r i e s was d e a r l y p a i d f o r . Even i f firewood i s excluded, i n 1955 the average c a l o r i f i c content of a k i l o g r a m of f u e l produced i n the USSR was only 5608 C a l . ( l e s s than the w o r l d average i n 1913), while the world average i n 1953 was 7520 _ I b i d . , p. 36; A. P r o b s t : "Voprosy r a z v i t i y a t o p l i v n o g o khozyaystva SSSR,tt Voprosy Ekonomiki, No. 1, 1956, p. 25. 7. C a l . Prom 1913 t o 1955, R u s s i a e x p e r i e n c e d m e r e l y 6 p er cent ( f r o m 1928 t o 1955 o n l y 1 p e r c e n t ) i n c r e a s e i n the c a l o r i f i c c o n t e n t p e r k g . o f f u e l p r o d u c e d . The i n c r e a s e f o r the w o r l d as a whole was a l m o s t 30 p e r c e n t . Over the same p e r i o d , the we i g h t o f f u e l e q u i v a l e n t p e r 100 kwh i n the U n i t e d S t a t e s d e c l i n e d by 35 k g . i n R u s s i a by o n l y 10 kg. The average number o f k i l o g r a m s r e q u i r e d t o produce 1000 kwh o f e l e c t r i -c i t y i n the USSR was much more i n ex c e s s o f t h a t r e q u i r e d i n 9 the U n i t e d S t a t e s i n t h e y e a r 1953 t h a n i t was i n 1913. The o u t d a t e d f u e l s t r u c t u r e a l s o l e d t o i n j u r i o u s e f f e c t s upon p r o d u c t i v i t y i n f u e l e x t r a c t i o n and r e f i n i n g . Output of raw m i n e r a l f u e l s p e r e x t r a c t i o n worker d i d not even d o u b l e between 1928 and 1950, and ou t p u t of r e f i n e d p r o d u c t s — coke, p e t r o l e u m p r o d u c t s e t c . — p e r r e f i n i n g w orker a c t u a l l y d e c l i n e d . I t has a l s o burdened the S o v i e t economy w i t h e x c e s s i v e t r a n s p o r t and 10 h a n d l i n g c o s t s and d e p r i v e d i t o f a wide range o f b y - p r o d u c t s . "EFFECT Off THE MEW FUEL POLICY ON THE  NATURAL GAS INDUSTRY Only a f t e r S t a l i n ' s d e a t h c o u l d the q u e s t i o n o f f u e l p r i o r i t i e s be s u b j e c t e d t o s e r i o u s c r i t i c a l e x a m i n a t i o n . The o b s o l e t e n a t u r e o f the c o u n t r y ' s energy s t r u c t u r e q u i c k l y became e v i d e n t and the w i d e r use o f l i q u i d and gaseous f u e l s 9 S. P e l d : "Ob ekonomicheskom b a l a n s e narodnogo k h o z y a y s t v a , " Voprosy Ekonomiki,No. 3, 1960, p. 23; S. P e l d : op. c i t . ( 1 9 6 4 ) , p. 48-53. 10 D. M. S h i m k i n : op. c i t . , T a b l e I , p. 80. 8. 11 was s t r o n g l y u r g e d . The new, p o s t - S t a l i n c l i m a t e , w i t h i t s i n c r e a s i n g degree of economic r a t i o n a l i t y , p r o v i d e d a p o w e r f u l s t i m u l u s f o r the growth o f the n a t u r a l gas i n d u s t r y . Output i n c r e a s e d t e n f o l d between 1955 and 1963, f r o m l e s s t h a n 9 b i l l i o n c u b i c meters t o over 90 b i l l i o n , and i s expected t o 12 r e a c h 128 b i l l i o n by the end o f 1965. As Table I I i n d i c a t e s , th e p r o d u c t i o n o f f r e e gases has been i n c r e a s i n g c o n s i d e r a b l y f a s t e r t h a n t h a t of o i l - w e l l g a s e s , w h i l e the volume of t h o s e manufactured f r o m c o a l and s h a l e has remained s t a t i o n a r y and of n e g l i g i b l e i m p o r t a n c e . N a t u r a l gas i s t a k i n g a p r o g r e s s -i v e l y g r e a t e r share i n the f u e l mix o f the USSR, a c c o u n t i n g f o r over 12 p e r c e n t i n 1963, a f i g u r e w h i c h i s t o r i s e to 13 17 p e r c e n t by t h e end o f 1965. O i l and gas j o i n t l y a l r e a d y s u p p l y more than h a l f o f a l l f u e l r e q u i r e m e n t and t h e i r share w i l l c o n t i n u e t o r i s e i n the f u t u r e . The S o v i e t U n i o n i s s t r i v i n g to a c h i e v e an e n e r g y - b a l a n c e r e s e m b l i n g t h a t o f the U n i t e d S t a t e s . I n a l l p r o b a b i l i t y , g i v e n a dozen y e a r s , the s h a r e s o f the t h r e e main f o s s i l f u e l s w i l l match c l o s e l y i n the two c o u n t r i e s . The p r e s e n t c h e m i c a l d r i v e — • a n o t h e r move i n the d i r e c t i o n of g r e a t e r r a t i o n a l i t y i n t h e S o v i e t economy— i s a l s o i n t i m a t e l y connected w i t h the development o f o i l and 11 A. P r o b s t : op. c i t . , Voprosy E k o n o m i k i , No. 1, 1956, p. 27. 12 T a b l e I and Theodore Shabad: "News Notes, 1* S o v i e t  Geography, Feb., 1964, p. 59. 13 O i l and Gas J o u r n a l , J a n . 6, 1964, p. 48; P r o m y s h l e n n o s t ' SSSR, 1963, p. 191. 9. T A B L E I I P r o d u c t i o n of Gas i n the USSR ( m i l l i o n cu.meters) YEAR PROM GAS WELLS PROM OIL WELLS MANUFACTURED' TOTAL 1950 3997.4 1763.5 419.6 6180.5 1955 5897.6 3083.3 1375.2 10356.1 1956 8408.1 3661.8 1613.0 13682.9 1957 14256.0 4327.1 1646.5 20229.6 1958 22674.9 5409.7 1807.5 29892.1 1959 28858.5 6532.5 1876.4 37267.4 1960 37596.9 7706.3 1910.9 47214.1 1961 50383.5 8597.8 1916.1 60897.4 1962 63511.4 10013.5 1718.7 75243.6 1963 77678.6 12145.7 1627.0 91451.3 Source: Yu. I . Bokserman: P u t i R a z v i t i y a Novoy  T e k h n i k i v Gazovoy Promyshlennosti, I z d a t . nNedra t t, Moskva, 1964, p. 5. gas e x t r a c t i o n and r e f i n i n g , s i n c e petroleum and n a t u r a l gas are the most important as w e l l as the cheapest raw m a t e r i a l s f o r the chemical i n d u s t r y . In most areas, n a t u r a l gas a l s o p r o v i d e s the l e a s t expensive energy f o r t h a t f u e l and power-i n t e n s i v e a c t i v i t y . The n e g l e c t of these f u e l s d u r i n g the S t a l i n e r a proved e x c e e d i n g l y harmful to the development of the chemical i n d u s t r y , which was p r a c t i c a l l y n o n - e x i s t e n t d e s p i t e the s t r o n g t r a d i t i o n of R u s s i a n chemistry. What l i t t l e e x i s t e d was based on c o a l and-- to a l a r g e extent-- even on vegetable raw m a t e r i a l s , wood and animal f a t . Costs were extremely h i g h and o p e r a t i o n s backward. The present c r a s h program to develop 10. a l a r g e - s c a l e p e t r o c h e m i c a l i n d u s t r y , reduce the share of c o a l and e l i m i n a t e the r e l i a n c e on p l a n t and animal sources, •would not be p o s s i b l e without the.:, change i n the f u e l p o l i c y which took p l a c e i n the second h a l f of the l a s t decade. THE MEW FUEL POLICY IN WORLD PERSPECTIVE I t i s important not to regard the S o v i e t f u e l and chemical r e v o l u t i o n s only i n t h e i r narrow n a t i o n a l context or as merely a c r u c i a l step i n the economic race w i t h the U n i t e d S t a t e s . These r e v o l u t i o n s are not p e c u l i a r to the two g r e a t superpowers alone, and the S o v i e t p o l i c y change i s best seen a g a i n s t an i n t e r n a t i o n a l background. Appendix, Table I I shows a r a p i d r i s e i n the share of l i q u i d and gaseous f u e l s a l l over the w o r l d . The case of Western Europe i s p a r t i c u l a r l y i l l u m i n a t i n g , f o r here energy consumption has l o n g reached a h i g h l e v e l , the chemical i n -d u s t r y was w e l l developed and the economy was e s s e n t i a l l y c oal-based. In most c o u n t r i e s , however, c o a l reached a peak by 1930, and from t h a t time o i l consumption has been i n c r e a s i n g a t a much f a s t e r r a t e . T h i s i s not true of Germany, d e d i c a t e d to the p r i n c i p l e of economic autarky and a f t e r 1945 p r o s t r a t e i n d e f e a t . The t r e n d , however, was strong i n coal-hungry c o u n t r i e s such as Sweden, H o l l a n d , Prance sjid I t a l y , and c l e a r l y e v i d e n t even i n c o a l - r i c h Great B r i t a i n by 1950. S i n c e 1950, t h i s t r e n d became a r e v o l u t i o n . The share of l i q u i d f u e l s i n the energy mix of Western Europe as a whole has now reached o n e - t h i r d , and, i n I t a l y and Sweden has w e l l 11. 14 surpassed the share of o i l i n the U n i t e d S t a t e s . Coupled w i t h i t came the phenomenal upsurge of pet r o c h e m i c a l i n d u s t r y even i n such a t r a d i t i o n a l c i t a d e l of coke chemistry as the Ruhr. In 1961-62, over h a l f of a l l organic chemical p r o d u c t i o n i n West Germany came from petroleum, i n Great B r i t a i n n e a r l y 15 t w o - t h i r d s . The f u e l and chemical r e v o l u t i o n s i n Western Europe were almost e x c l u s i v e l y "based on imported crude, a n d — due to sm a l l r e s e r v e s — n a t u r a l gas as y e t has played a very minor r o l e . T h i s s i t u a t i o n , however, i s about to change as the presence of huge gas d e p o s i t s around and under the Worth Sea are becoming e v i d e n t . A l t h o u g h i t i s u n l i k e l y t h a t Western Europe c o u l d ever r i v a l the S o v i e t Union i n n a t u r a l gas output, a marked i n c r e a s e i n the consumption of t h a t f u e l seems c e r t a i n . In any case, i t i s c l e a r that w i t h her new f u e l p o l i c y and pe t r o c h e m i c a l d r i v e , the S o v i e t Union i s not t r e a d i n g any no v e l or e x t r a o r d i n a r y path p e c u l i a r to her and the U n i t e d S t a t e s o n l y , but has simply j o i n e d i n a world-wide t r e n d , f o l l o w e d even by such European c o u n t r i e s which have no o i l , l i t t l e gas, and are r i c h i n c o a l . 14 U.N. S t a t i s t i c a l Papers. S e r i e s G. No. 6, p. 8; P e t e r R. O d e l l : An Economic Geography of O i l . London: G. B e l l & Sons, 1963, p. 86. 15 G. R. Peet: The L o c a t i o n of Pet r o c h e m i c a l I n d u s t r y . Master T h e s i s , 1963, U n i v e r s i t y of B r i t i s h Columbia, p. 31-32 and 62-64. 12. REGIONAL DISTRIBUTION OP NATURAL GAS PRODUCTION Table I I I , Maps?l; 2. and, % supply data about the output of n a t u r a l gas i n the c h i e f r e g i o n s of the USSR. A t pre s e n t , • p r o d u c t i o n i s sh a r p l y concentrated i n t h r e e a r e a s - - the Ukraine, the North Caucasus and the Volga-- which together accounted f o r over 80^ of a l l output i n 1962 (about 61.4 b i l l i o n cubic meters out of a t o t a l of 73.5 b i l l i o n ) . A l l three r e g i o n s are s i t u a t e d i n European R u s s i a which-- together w i t h the T r a n s c a u c a s u s — consumed 97 per cent of a l l gas a t the above 16 date. As Map 3 shows, the C e n t r a l A s i a n r e p u b l i c s and Kazakhstan s t i l l produce much l e s s than t h e i r v a s t r e s e r v e s would warrant, w h i l e p r o d u c t i o n has not yet begun i n Western S i b e r i a . At the same time, the shares of the Ukraine, the North Caucasus and most of the Volg a are h i g h e r i n p r o d u c t i o n than i n r e s e r v e s . (For a d e t a i l e d a n a l y s i s of r e s e r v e s , see Chapter I I I ) . The l a s t years of the c u r r e n t Seven Year:. P l a n . c a l l f o r a sharp i n c r e a s e i n output i n C e n t r a l A s i a . Prom a mere two b i l l i o n c u b i c meters i n 1962, i t i s to r i s e to 19 b i l l i o n by the end of 1965, 17 b i l l i o n of t h i s from the Uzbek R e p u b l i c . Over the l a s t decade important changes have taken p l a c e i n the gas i n d u s t r y of the Ukraine and the Nort h Caucasus. U n t i l the e a r l y f i f t i e s , most of the U k r a i n i a n output came from the o l d C a r p a t h i a n f i e l d s , and though sma l l i n a b s o l u t e volume, p r o d u c t i o n from these d e p o s i t s represented over a 16 D e r i v e d from p r o d u c t i o n data and the d i s t r i b u t i o n of p i p e l i n e network i n 1962. 13. Table III Regional Breakdown of Natural Gas Production ( b i l l i o n cubic meters) 1958 1962 1965(plan) Free O i l Well Free O i l Well Free Gases REGIONS gases gases gases gases (except for t o t a l USSR) USSR 22.67 5.40 63.5 10.01 128.0* RSFSR 10.16 3.58 31.5 6.78 Volga-Urals 4.22 3.00 a 9.9 5.50 a 26.5© Kuybyshev Ob. Orenburg Ob. Saratov Ob. Bashkir ASSR Volgograd Ob. Astrakhan Ob. & Kalmyk ASSR 0.65 1.57 2.00 0.7 0.7 5.2 1.1 2.7 0.2 North Caucasus 4.93 0.47a 20.8 0.8?a 38.7-40d Krasnodar Kray Stavropol 1 Kray Chechen-Ing.ASSR Dagestan ASSR 0.53 4.30 0.09 0.01 9.4 11.3 n.a n.a 19.7-21.0d 19.0 neg l i g i b l e n e g l i g i b l e Komi ASSR West S i b e r i a East S i b e r i a Sakhalin Ob. 1.03 0.10 0.8 0.06 3.10 n.a 3.656 Ukrainian SSR West Ukraine East Ukraine 9.10 4.95° 5.05C 0.398 0.398 25.3 7.9C 17.45° 0.851 0.851 38.0 11.4C 26.6° Azerbaydzhan SSR 3.33 1.115 4.6 1.990 Central A s i a 0.08 0.271 2.0 0.342 18.05-19.3 Uzbek SSR Turkmen SSR K i r g i z SSR 0.08 0.045 0.224 0.002 1.9 0.1 0.086 0.238 0.018 16.3-17.0d 1.0-1.6d 0.75 Kazakh SSR 0.042 0.046 0.06 14. q u a r t e r of the t o t a l f o r the whole USSR i n 1950 and over a t h i r d i f o i l - w e l l gases are excluded. By 1958, however, the c h i e f center o f p r o d u c t i o n i n the Ukraine has s h i f t e d to the newly d i s c o v e r e d huge S h e b e l i n k a f i e l d i n Kharkov O b l a s t ' • In t h a t year, S h e b e l i n k a a l r e a d y accounted f o r 55 per cent of the Notes f o r Table I I I : a) Approximate. C a l c u l a t e d by assuming the same g a s - o i l r a t i o f o r the North Caucasus as i n Azerbaydzhan, where o i l - f i e l d s are i n s i m i l a r depth and have been e x p l o i t e d f o r about the same l e n g t h of time. Data f o r the V o l g a Region was obtained by s u b t r a c t i n g p r o d u c t i o n i n the N o r t h Caucasus from the t o t a l f o r the RSFSR and a s s i g n i n g 110,000 cubi c meters f o r the other (very minor) r e g i o n s i n 1958 and 410,000 cubi c meters i n 1962. For data on o i l p r o d u c t i o n i n the North Caucasus, see f o o t n o t e 6, p> ~162(Chapter V I I ) . b) I n c l u d e s o i l - w e l l gases. e) Approximate. C a l c u l a t e d by t a k i n g the mid-value between the 1961 and 1963 p r o d u c t i o n a t S h e b e l i n k a , then sub-t r a c t i n g i t from t o t a l U k r a i n i a n p r o d u c t i o n to o b t a i n output i n the Western U k r a i n e . 1965 p r o d u c t i o n was c a l c u l a t e d by assuming the same r e l a t i o n s h i p between the output of the two U k r a i n i a n r e g i o n s that e x i s t e d i n 1963. d) Ranges are due to d i s c r e p a n c y among sources. e) These plans were formulated i n 1959 and i t i s now c l e a r t h a t they w i l l be f a r from r e a l i z e d . Sources: P a u l E . Lydolph & Theodore Shabad: " O i l and Gas I n d u s t r i e s i n the USSR, "Annals of the A s s o c i a t i o n of  American Geographers,"' Dec. 1960, p. 7, Table 7; U.S. C e n t r a l I n t e l l i g e n c e Agency: USSR A t l a s of T r a n s m i s s i o n P i p e l i n e s f o r  N a t u r a l Gas, 1963, p. 2; Theodore Shabad: "News Notes", S o v i e t  Geography, Feb. 1964, p. 57; Robert E . K i n g : " E x p l o r a t i o n and P r o d u c t i o n i n Europe i n 1963", American Asso c . of Petroleum  G e o l o g i s t , B u l l e t i n . Aug., 1964, p. 1342; Yu. I . Bokserman: op. c i t . , p. 5, Table 2, p. 7, Table 5, and p. 29, Table 19; V.T. B o r i s o v : " P r o i z v o d i t e l * n o s t 1 t r u d a . . . . v dobyche gaza," "Gazovoye D e l o . No. 10, 1963, p. 68. AZERBAIDZHAN CENTRAL ASIA \ y A+B+C+C, ( LOGARITHMIC SCALE) RESERVES AND PRODUCTION OF NATURAL GAS IN THE EUROPEAN USSR SCALE OF PRODUCTION = 2 ° * SCALE OF RESERVES 20 PRODUCTION RESERVES'-O i l well gases are excluded from production data. & The f u l l extent of these reserves i s not yet known. 17. output of the Ukraine, w h i l e by 1963, i t s share was n e a r l y 17 !§•%• In the N o r t h Caucasus, the l a r g e s c a l e p r o d u c t i o n of n a t u r a l gas began i n 1953 from the l a r g e North S t a v r o p o l ' f i e l d , Krasnodar Kray remaining unimportant u n t i l the present decade. Due to the development of s e v e r a l d e p o s i t s i n the Kuban, however, output i n Krasnodar and S t a v r o p o l ' Kray i s about equal today. As e x p l a i n e d i n more d e t a i l i n Chapter I I I , the present r a t e of p r o d u c t i o n i s s e v e r e l y t a x i n g the r e s o u r c e s i n many r e g i o n s of European R u s s i a , such as the Volga, the Transcaucasus and the U k r a i n e . A t the same time, the l a r g e r e s e r v e s of C e n t r a l A s i a and the Lower Ob V a l l e y are used very inadequately or not a t a l l today. As output from the o l d f i e l d s , cannot s u b s t a n t i a l l y be i n c r e a s e d any f u r t h e r , and new d i s c o v e r i e s i n here are l e s s l i k e l y than south and east of the U r a l s , a g r a d u a l s h i f t i n p r o d u c t i o n c e n t e r s c o u l d be expected i n the f u t u r e . 17 Promyshlennost' SSSR ,.1965;, p. 214-217; V.M. Vol'pe & V.S. K l u p t : L e k t s i i po Ekonomicheskoy G e o g r a f i i . , Leningradskogo U n i v e r s i t e t a , 1964, p. 18-19 and Robert E. K i n g : " E x p l o r a t i o n and P r o d u c t i o n i n Europe i n 1963," American  A s s o c i a t i o n of Petroleum G e o l o g i s t , B u l l e t i n , Aug. 1964, p.1342. 18. Chapter I I MARKETS FOR NATURAL GAS 19. S i n c e 1955, n a t u r a l gas i s p l a y i n g a p r o g r e s s i v e l y g r e a t e r r o l e i n the S o v i e t economy. I t i s consumed by a v a r i e t y o f u s e r s and i t s share i n the f u e l mix of the USSR i n c r e a s e s s t e a d i l y . To a n a l y z e i t s v a r i o u s u s e s , an under-s t a n d i n g of i t s t e r m i n o l o g y and b a s i c c a t e g o r i e s i s n e c e s s a r y . N a t u r a l gas may be d e r i v e d from d i s t i n c t gas d e p o s i t s as w e l l as f r o m o i l f i e l d s , where the gas forms a cap o v e r -l y i n g the c r u d e . B o t h c a t e g o r i e s a r e i n c l u d e d i n the term ' n a t u r a l gas' ( p r i r o d n y y gaz i n R u s s i a n ) , a l t h o u g h i n R u s s i a n l i t e r a t u r e the term can a l s o be r e s t r i c t e d t o mean f r e e gas o n l y , t o d i s t i n g u i s h i t f r o m o i l - w e l l gas w h i c h has a s e p a r a t e name, popytnyy. I n i t s b r o a d e s t meaning, however, n a t u r a l gas a l s o i n c l u d e s n a t u r a l gas l i q u i d s - - l i q u i d ' p e t r o l e u m gases (LPGr's), n a t u r a l g a s o l i n e , and c o n d e n s a t e s — p r o g r e s s i v e l y h e a v i e r h y d r o c a r b o n s , w h i c h a r e g e n e r a l l y s e p a r a t e d f rom meth-ane the c h i e f component of n a t u r a l g a s , i n g a s - p r o c e s s i n g p l a n t s . I n t r y i n g t o a n a l y z e the use of gas i n t h e S o v i e t economy, one i s h i n d e r e d by the i n c o n s i s t e n c i e s i n S o v i e t d a t a . I t i s n o t a l w a y s c l e a r i n S o v i e t l i t e r a t u r e w h i c h c a t e g o r i e s a r e i n c l u d e d i n the term ' n a t u r a l ( p r i r o d n y y ) g a s ' . P r o d u c t i o n f i g u r e s g e n e r a l l y i n c l u d e o utput of o i l - w e l l gases ( t h i s f a c t i s n e a r l y always i n d i c a t e d ) , a n d . i t i s easy t o see when they do n o t . Output d a t a r e f e r s t o gas b e f o r e i t i s p r o c e s s e d ; n a t u r a l gas l i q u i d s , t h e r e f o r e , a r e not t r e a t e d as a d d i t i o n a l o u t p u t . M a n u f a c t u r e d gases a r e c l e a r l y s e p a r a t e d i n p r o d u c t i o n s t a t i s t i c s t h a t r e f e r t o n a t u r a l ( p r i r o d n y y ) gas. On the o t h e r hand, consumption f i g u r e s f o r v a r i o u s s e c t o r s of t h e economy, 20. e s p e c i a l l y when they a r e g i v e n i n p e r c e n t a g e s , a r e f r e q u e n t l y ambiguous, f o r i t i s o f t e n h a r d to d e t e r m i n e w h i c h c a t e g o r i e s o f gas a r e i n c l u d e d i n t h e d a t a . T a b l e I V shows t h e consumption of n a t u r a l gas by s e c t o r s o f economy i n the USSR and the U n i t e d S t a t e s . S e v e r a l s o u r c e s p r o v i d e d a t a on S o v i e t gas consumption, a l l showing d i s a g r e e -ments. Two have been s e l e c t e d below, the second (Bokserman) g i v i n g t h e breakdown o n l y i n p e r c e n t a g e s . N o v i k o v e x p r e s s e d l y , and Bokserman, p r o b a b l y , i n c l u d e m anufactured gases i n t h e f i g u r e s , but s i n c e these gases r e p r e s e n t l e s s than two per cent of S o v i e t gas o u t p u t , t h e i r i n c l u s i o n does not g r e a t l y a f f e c t the a l l o c a t i o n p a t t e r n . The US t o t a l r e f e r s t o p r o c e s s e d gas f r o m w h i c h n a t u r a l gas l i q u i d s have been e x t r a c t e d . These l i q u i d s , however, seem t o be i n c l u d e d i n the S o v i e t f i g u r e s . I t cannot be d e t e r m i n e d what c o n v e r s i o n i s used between wet n a t u r a l gas and n a t u r a l gas l i q u i d s , and h e r e 100 per c e n t i s s i m p l y t a k e n as t o t a l o u tput b e f o r e p r o c e s s i n g . Only c e r t a i n c a t e g o r i e s o f consumption can be compared i n t h e two c o u n t r i e s . I n p a r t i c u l a r , i t i s not p o s s i b l e t o d e termine a c c u r a t e l y what p o r t i o n o f the t o t a l i s used as p e t r o c h e m i c a l raw m a t e r i a l ( s i n c e U.S. s t a t i s t i c s t r e a t n a t u r a l gas l i q u i d s s e p a r a t e l y , by f a r the g r e a t e s t p a r t o f gas-d e r i v e d raw m a t e r i a l s a r e , i n any c a s e , e x c l u d e d f rom the U.S. d a t a g i v e n b e l o w ) . 1 I am i n d e b t e d t o D r . R o b e r t W. Campbell of I n d i a n a U n i v e r s i t y f o r c a l l i n g my a t t e n t i o n t o the above problem. 21. Table IV Consumption of N a t u r a l Gas by S e c t o r s of Economy s 0 V I E T U N I O N U N I T E D S T A T E S A f t e r Novikov A f t e r Bokserman 1 9 6 1 1 9 6 2 1 9 6 2 B i l l . Per B i l l . Per B i l l . Per cu.m. cent cu.m. cent cu.m. cent Household. & Household. & Household & m u n i c i p a l 7.4 12.2 m u n i c i p a l 7.5 10.0 m u n i c i p a l 132.1 33.4 Chemical i n d . £ 2.2 3.6 Industry (ex- Carbon b l a c k 3.8 1.0 Energy needs cept power 46.0 61.2 of i n d u s t r y s t a t i o n s ) (except power Of which: F i e l d use 56.5 14.3 s t a t i o n s ) 32.9 54.0 a ) c h e m i c a l AA 4.7 6.2 Of which: b ) o i l & gas 6.6 8.8 O i l r e f i n i n g 22.2 5.6 a) m e t a l l u r g y 7.3 12.0 c) m e t a l l u r g y 11.0 14.7 I r o n & s t e e l ^ ^ 10.0 2.5 b) cement 3.8 6.3 d ) b u i l d i n g P o r t l a n d . m a t e r i a l 8.4 11.2 cement k tS". 8 cjmachine b l d g . e)machine b l d g • & metal work. 5.2 8.5 & metal work 7.8 10.4 f ) f o o d 2.9 3.9 d ) o t h e r branches 16.6 27.2 g ) o t h e r branches 4.5 6.0 E l e c t r i c E l e c t r i c E l e c t r i c s t a t i o n s 16.4 26.9 s t a t i o n s 20.5 27.0 s t a t i o n s 56.0 14.1 P i p e l i n e need & l o s s e s p l u s P i p e l i n e export 2.0 3.3 Transport 1.3 1.7 f u e l 13.5 3.4 A g r i c u l t u r e 0.7 0.1 A l l other f u e l 111.6 28.1 TOTAL 60.9 100.0 76.0 100.0 392.7 100.0 A Used, a p p a r e n t l y , only as raw m a t e r i a l . AA Used as f u e l and raw m a t e r i a l . Approximatev Included i n " A l l other f u e l " . Should not be i n c l u d e d i n t o t a l . 22. As i s e v i d e n t f rom the t a b l e , the p a t t e r n of gas consumption i n the USSR d i f f e r s s i g n i f i c a n t l y f r o m t h a t found i n the U n i t e d S t a t e s . I n the l a t t e r c o u n t r y , h o u s e h o l d and m u n i c i p a l u s e r s t a k e a f u l l t h i r d o f the t o t a l gas s u p p l y , w h i l e t h e r m a l e l e c t r i c s t a t i o n s b u r n o n l y one-seventh. I n R u s s i a the opposite i s t r u e . Power s t a t i o n s r e p r e s e n t the l a r g e s t s i n g l e consumer group, u s i n g w e l l over a q u a r t e r of a l l g a s , w h i l e the h o u s e h o l d and m u n i c i p a l s e c t o r s consume o n l y a t e n t h . The i n d u s t r i a l s e c t o r ( i n c l u d i n g the g e n e r a t i o n o f e l e c t r i c i t y ) c o m p l e t e l y dominates consumption i n the S o v i e t U n i o n , a c c o u n t i n g f o r 88 p e r c e n t of the t o t a l , a g a i n s t 63 p e r c e n t i n t h e U n i t e d S t a t e s . The f o l l o w i n g s e c t i o n o f t h i s paper examines t h e r o l e of gas i n t h r e e i m p o r t a n t b ranches o f i n d u s t r y then b r i e f l y t r e a t s i t s use by the h o u s e h o l d and m u n i c i p a l s e c t o r s . INDUSTRIAL USES OP NATURAL GAS Gas i n i n d u s t r y i s consumed i n two ways: as f u e l and as raw m a t e r i a l i n the m a n u f a c t u r i n g o f p e t r o c h e m i c a l p r o d u c t s . By f a r the g r e a t e r p o r t i o n of gas i s used as f u e l . Even the p e t r o c h e m i c a l i n d u s t r y burns perhaps the l a r g e r p a r t o f the Note to T a b l e IV: The d i f f e r e n c e s between the d a t a f o r the USSR a r e n o t due m e r e l y to the d i f f e r e n c e i n y e a r s . B o t h a u t h o r s g i v e breakdown f o r 1960 w i t h a p p r e c i a b l e v a r i a t i o n . S o u r c e s I N. I . N o v i k o v : "Nekotorye t e k h n i k o - e k o n o m i -c h e s k i y e p o k a z a t e l i gazovoy p r o m y s h l e n n o s t i SSSR, "Gazovoye D e l o , No. 5, 1963, p. 5; Y u . I . Bokserman: op. c i t . , p. 14; U.S. M i n e r a l Yearbook. 1962. Bureau o f M i n e s , p. 337; Sam H. S c h u r r : op. c i t . . p. 564-565, T a b l e A - l l and T a b l e A-13; A. M. L e e s t o n e t a l . : The Dynamic N a t u r a l Gas I n d u s t r y , U n i v e r s i t y o f Oklahoma P r e s s , Norman, Oklahoma, 1963, p. 198. 23. amount consumed to produce t h e r m a l energy. The v a r i o u s c a t e -g o r i e s of gas, however, a r e u t i l i z e d i n d i f f e r e n t ways. Dry n a t u r a l g a s — composed m a i n l y of methane, a p a r a f f i n * , e x p e n s i v e t o c r a c k - - i s l e s s s i g n i f i c a n t as a p e t r o c h e m i c a l f e e d s t o c k and i s used o v e r w h e l m i n g l y t o produce h e a t . A l a r g e p o r t i o n of n a t u r a l gas l i q u i d s , on the o t h e r hand, i s consumed as raw m a t e r i a l . A l t h o u g h d r y n a t u r a l gas i s used p r i n c i p a l l y f o r one pu r p o s e , the p r o d u c t i o n of t h e r m a l energy, i t has many advan-t a g e s over o t h e r f u e l s . I t r e q u i r e s l i t t l e p r o c e s s i n g f rom the p r o d u c e r arid imposes no h a n d l i n g or s t o r a g e problems on the consumer. I t i s c l e a n and easy t o c o n t r o l d u r i n g combus-t i o n , l e a v e s no waste m a t e r i a l s , and has been g e n e r a l l y cheaper t h a n o t h e r f u e l s . Due t o i t s s p e c i a l q u a l i t i e s , i n most m e t a l i n d u s t r i e s i t can improve the q u a l i t y — and t h e r e f o r e the v a l u e -- of the p r o d u c t a t no g r e a t e r c o s t . I t i s no wonder t h a t s i n c e the war gas had made such r a p i d i n r o a d s i n most i n d u s t r i e s i n N o r t h A m e r i c a and i s now d o i n g the same i n the USSR and Western Eu r o p e . As i n d u s t r i a l f u e l , gas i s u t i l i z e d i n two ways: under b o i l e r s and i n ovens ( f u r n a c e s ) . Thermal power p l a n t s , the c h e m i c a l , l e a t h e r , t e x t i l e and f o o d i n d u s t r i e s b u r n gas c h i e f l y under b o i l e r s t o produce steam, w h i l e t h e m e t a l l u r -g i c a l , b u i l d i n g m a t e r i a l s and e n g i n e e r i n g i n d u s t r i e s b u r n i t i n f u r n a c e s . 24. THE USE OF GAS IN ELECTRIC STATIONS I n f u e l - p o w e r p l a n t s t h e r m a l energy i s u t i l i z e d t o produce e l e c t r i c i t y . Heat i s s u p p l i e d t o a " working f l u i d " ' (steam or v a r i o u s gases) w h i c h d r i v e s the t u r b i n e by expand-i n g . A l m o s t a l l t h e r m a l e l e c t r i c i t y today i s g e n e r a t e d by steam produced i n b o i l e r s , w h i c h can be h e a t e d by any f u e l f r o m peat t o n a t u r a l g a s . T a b l e IV shows the heavy consump-t i o n o f gas by e l e c t r i c s t a t i o n s b o t h i n t h e U n i t e d S t a t e s and t h e USSR. Though a c c o u n t i n g f o r a l o w e r share of t o t a l consump-t i o n t h a n t h e i r c o u n t e r p a r t s i n the S o v i e t U n i o n , US power p l a n t s burned 56 b i l l i o n c u b i c m e t e r s (1965 b i l l i o n c u b i c f e e t ) i n 1962, w h i l e R u s s i a n p l a n t s burned 20 b i l l i o n c u b i c 1 m e t e r s . A I n r e c e n t y e a r s the gas t u r b i n e has become f u l l y com-p e t i t i v e w i t h t h e steam t u r b i n e i n t h e r m a l power p l a n t s and f u r t h e r improvement i n i t s p o s i t i o n can be e x p e c t e d . GaB t u r b i n e s r e q u i r e no b o i l e r and t h o s e w h i c h o p e r a t e on an open c y c l e - - d i s c h a r g i n g the exhaust gases i n t o the a t m o s p h e r e -need no condensers or c o o l i n g a p p a r a t u s e i t h e r . T h i s s i g n i -f i c a n t l y r e d u c e s c o n s t r u c t i o n and maintenance c o s t s and f o r t h e open c y c l e p l a n t s c o m p l e t e l y e l i m i n a t e s the need f o r w a t e r . Such p l a n t s a r e i d e a l i n a d e s e r t environment and a number of them a r e under c o n s t r u c t i o n i n S o v i e t C e n t r a l A s i a . I n f o r m a t i o n on t h e t e c h n o l o g y and economic advantages of steam and gas t u r b i n e power p l a n t s may be found i n : J . Kenneth S a l i s b u r y : Steam T u r b i n e s and T h e i r C y c l e s . New Y o r k , John W i l e y & Sons, I n c . , 1950, e s p e c i a l l y C h a p t e r s 1,2,4 and 14; D. G. Shepherd: I n t r o d u c t i o n t o the Gas T u r b i n e . London, C o n s t a b l e & Co. L t d . , 1960, e s p e c i a l l y C h a p t e r s 1,2,3, t o 11; K.P. R o d d a t i s : " I s p o l 1 zovanife P r i r o d n o g o Gaza v E n e r g e t i k e , " I s p o l 1 z o v a n i y e Gaza v . P r o m y s h l e n n o s t i , Tashkent,1963,p.176-182. 1 See s o u r c e s f o r T a b l e I V . 25. The r e l a t i v e l y low p r i c e - e s p e c i a l l y d u r i n g the summer p e r i o d - i s no doubt the c h i e f r e a s o n f o r such m a s s i v e use. N e v e r t h e l e s s , the s p e c i a l f e a t u r e s of n a t u r a l gas produce s t i l l a d d i t i o n a l b e n e f i t s . S i n c e no h a n d l i n g , p u l v e r i z a t i o n or d r y i n g of f u e l i s n e c e s s a r y as i s the case w i t h c o a l , l i g n i t e o r p e a t , l a b o u r c o s t s i n g a s - f i r e d p l a n t s may be as much as 20 p e r c e n t l o w e r t h a n i n c o a l or p e a t - f i r e d s t a t i o n s of comparable c a p a c i t y . Because of b e t t e r flame c o n t r o l , n a t u r a l gas f u r t h e r improves the o p e r a t i o n of the a l r e a d y h i g h l y e f f i c i e n t b o i l e r . B o i l e r e f f i c i e n c y , d e f i n e d as t h e r a t i o of the h e a t absorbed by t h e w a t e r t o the h e a t c o n t e n t of t h e . f u e l , can r e a c h 92 p e r c e n t when gas i s burned b u t a t I 2 most 85^ p e r cent i f c o a l i s used. The m a j o r i t y o f t h e r m a l s t a t i o n s , b o t h i n the U n i t e d S t a t e s and t h e S o v i e t U n i o n , p u r c h a s e n a t u r a l gas on an i n t e r -r u p t i b l e b a s i s . The extreme v e r s a t i l i t y o f modern steam p l a n t s e n a b l e s them t o burn p r a c t i c a l l y any f u e l w i t h l i t t l e change i n t h e i r e f f i c i e n c y . To keep p i p e l i n e s f u n c t i o n i n g as near f u l l c a p a c i t y as p o s s i b l e d u r i n g the summer months, n a t u r a l gas i s made a v a i l a b l e t o e l e c t r i c p l a n t s i n t h i s p e r i o d a t v e r y low p r i c e s . S a l e s a r e i n t e r r u p t e d once c o l d e r weather p r o v i d e s more l u c r a t i v e markets f o r the gas. These i n t e r --L. Smyshlyayeva: " R a z v i t f t e Gazovoy P r o m y s h l e n n o s t i i I s p o l * z o v a n i y e Gaza v SSSR,"Voprosy E k o n o m i k i , S e p t . 1960, p. 116;, Yu. I . Bokserman e t . a l : "Nekotorye v o p r o s y gazovogo s n a b z h e n i y a Narodnomu K h o z y a y s t v u , t t P l a n o v o y e K h o z y a y s t v o , March, 1960, p. 31; K.P. R o d d a t i s : op. c i t . , p. 176. 2.6. ' r u p t i b l e s a l e s a r e g e n e r a l l y a t p r i c e s below the p r o d u c t i o n and t r a n s p o r t c o s t of the f u e l , y e t , because they a r e i n l a r g e volumes and go f a r towards e v e n i n g out s e a s o n a l f l u c t u a t i o n s i n demand, th e y a r e p r o f i t a b l e f o r the gas i n d u s t r y and, n a t u r a l l y , f o r the power p l a n t s . A c c o r d i n g t o the new p r i c e system ( e f f e c t i v e s i n c e 1964) the USSR S t a t e P r o d u c t i o n Committee f o r N a t u r a l Gas, f o r i n s t a n c e , s e l l s gas t o power s t a t i o n s two r u b l e s below the p r i c e l e v e l , d u r i n g the summer 3 p e r i o d . I n s e v e r a l r e g i o n s o f the USSR, however, many t h e r m a l e l e c t r i c s t a t i o n s b u r n or w i l l b u r n n a t u r a l gas a l l y e a r a r o u n d . S w i t c h i n g t o o t h e r f u e l s i n w i n t e r i 3 o f t e n n o t p o s s i b l e e c o n o m i c a l l y a t a number of p l a n t s i n the Moscow R e g i o n , the B a l t i c , the U r a l s , M i d d l e A s i a , the Caucasus and M o l d a v i a . The use o f n a t u r a l gas as b o i l e r f u e l has i n c r e a s e d g r e a t l y i n a b s o l u t e t erms, and the share o f t h a t consumption 4 was between 27 and 28 p e r cent f r o m 1959 t o the end o f 1962. However, t h e r e i s now c o n s i d e r a b l e c r i t i c i s m a g a i n s t t h e i n -d i s c r i m i n a t e use o f t h a t q u a l i t y f u e l under b o i l e r s i n c e r t a i n a r e a s , n o t a b l y the U k r a i n e and the V o l g a . Because of i t s s p e c i a l c h a r a c t e r i s t i c s , i t s use i n f u r n a c e s and as c h e m i c a l 3 T. A. Brents:. "Novye optovye t s e n y na g a z , "Gazovoye D e l o , No. 8, 1963, p. 47. 4 Yu. I . Bokserman: op. c i t . , p. 14 and N. I . N o v i k o v : "Nekotorye t e k h n i k o - e k o n o m i c h e s k i y e p o k a z a t e l i gazovoy p r o m y s h l e n n o s t i SSSR, "Gazovoye D e l o , No. 5, 1963, page 5, T a b l e 3. 27. 5 raw m a t e r i a l could r e s u l t i n g r e a t e r gains to the economy. T h e r e f o r e , a r e l a t i v e decrease i n the gas consumption by thermal s t a t i o n s i s l i k e l y i n the f u t u r e and a number of p l a n t s , run-n i n g on gas, may be switched to other f u e l s a t l e a s t f o r the wi n t e r p e r i o d . The wider e x t e n s i o n of i n t e r r u p t i b l e s a l e s , however, i s continued to be urged, and the r i s i n g demand f o r e l e c t r i c i t y w i l l r e s u l t i n an a b s o l u t e i n c r e a s e i n the use of 6 n a t u r a l gas by power p l a n t s . THE USE Off NATURAL GAS IH THE IRON AND STEEL INDUSTRY The m e t a l l u r g i c a l i n d u s t r i e s consume gas c h i e f l y i n f u r n a c e s , where i t s s p e c i a l f e a t u r e s y i e l d great b e n e f i t s . A pure flame, the absence of harmful p r o d u c t s , an even d i s t r i b u t i o n of temperature and easy r e g u l a t i n g of combustion are h i g h l y d e s i r a b l e and o f t e n i mperative i n modern furnaces designed f o r good q u a l i t y metals. In the l a s t decade, the i r o n and s t e e l i n d u s t r y has become the second l a r g e s t i n d u s t r i a l consumer of n a t u r a l gas i n the S o v i e t Union and the t h i r d l a r g e s t i n the U n i t e d S t a t e s . 5 See f o r i n s t a n c e : V. Sluysarenko: "Khimicheskaya Promyshlennost' S o v i e t s k o y K a r p a t i i , " Ekonomicheskaya Gazeta, Dec. 7, 1963; B. J a r a m c h i s h i n : " P e r s p e k t i v i r o z v i t k u zakhidnou-k r a i n s k o y e n e r g o s i s t e m i , "Ekonomika Radianskoy Ukraine, No. 1, 1963, p. 72; Mi- Sidorenko; "Gaz-soyuznik k h i a i k o v , " Ekonomi-cheskaya Gazeta. No. 9, 1963, p. 8. 6 K. P. R o d d a t i s : op. c i t . , pp. 176-177, 181. 28. In both c o u n t r i e s , gas now h o l d s second p l a c e i n the f u e l r e -quirement of f e r r o u s m e t a l l u r g y , b e i n g exceeded only by c o a l . N a t u r a l gas i s consumed i n the p r o d u c t i o n of s t e e l as w e l l as p i g i r o n , but the r o l e and s i g n i f i c a n c e of i t s u t i l i z a t i o n d i f f e r c o n s i d e r a b l y i n t h e i r p r o c e s s e s . I r o n making i s e s s e n t i a l l y a p r o c e s s of r e d u c t i o n : i r o n oxide (the ore) i s reduced by carbon monoxide produced d u r i n g the slow bu r n i n g of a f u e l . Very h i g h temperatures and r a t e of heat t r a n s f e r i s necessary f o r such an o p e r a t i o n . For t h i s reason, the b l a s t furnace i n which coke i s i n t e r m i n g l e d and i s i n d i r e c t c o n t a c t w i t h the ore - thus p e r m i t t i n g a h i g h r a t e of heat t r a n s f e r - has r e t a i n e d i t s supremacy i n the p r o d u c t i o n of p i g i r o n . N a t u r a l gas (or o i l ) , t h e r e f o r e , w i l l not oust c o a l as the p r i n c i p a l f u e l i n the s m e l t i n g of i r o n ore, e s p e c i a l l y s i n c e coke p r o d u c t i o n from poorer q u a l i t y c o a l s i s now f e a s i b l e . However, the i n j e c t i o n of gas i n t o the furnace -p a r t i c u l a r l y i f e n r i c h e d w i t h oxygen - can reduce g r e a t l y the amount of coke needed f o r the p r o c e s s , and a coke consumption 7 r a t e of 0.3 ton per ton of p i g i r o n i s now a n t i c i p a t e d . Table I I I i n the Appendix i l l u s t r a t e s the advantages gained by g a s - i n j e c t i o n . Over h a l f of a l l b l a s t f u r n a c e s i n the S o v i e t Union used n a t u r a l gas i n 1963 and smelted 60 per cent of a l l S o v i e t 7 See f o r i n s t a n c e : H.R. Brown and W.R. Hesp: "Metal-l u r g i c a l Coke from S u b s t i t u t e Goals, " J o u r n a l of M e t a l s , A p r i l , 1964, p. 346; Yu. I . Bokserman: op. c i t . , p. 230-35. 29. 8 p i g i r o n . T h i s share i s soon to r i s e s h a r p l y as p i p e l i n e s r e a c h a l l the major U r a l m i l l s . Ten of the l a r g e s t works i n the Ukraine have experienced a 10 to 20 per cent r e d u c t i o n i n coke consumption s i n c e they began to b l a s t w i t h gas, even though they s t i l l do not take f u l l advantage of the new te c h -9 n i q u e s . I f i t g a i n s widespread acceptance, the new process of p r e - r e d u c t i o n of ore w i l l f u r t h e r i n c r e a s e the consumption of n a t u r a l gas i n p i g i r o n p r o d u c t i o n . The r o t a r y k i l n s , i n which the ore i s p a r t i a l l y reduced b e f o r e b e i n g loaded i n t o the b l a s t f u r n a c e , are f i r e d e i t h e r by l i q u i d or gaseous f u e l s . S i n c e r o t a r y f u r n a c e s are r e l a t i v e l y easy and inexpensive to c o n s t r u c t , and as they can save much coke f o r the b l a s t f u r n a c e , a wide a p p l i c a t i o n of the technique i n the f u t u r e may be ex-pected. In c o n t r a s t to p i g i r o n p r o d u c t i o n , where c o a l i s s t i l l k i n g , steel-making i s now the domain of gas and o i l . S i n c e 1910, most of the world's s t e e l i s made i n open-hearth f u r n a c e s (85 per cent of the t o t a l output i n both the S o v i e t Union and 10 the U n i t e d S t a t e s t o d a y ) , although new methods are begin n i n g 8 Promyshlennost 1 SSSR,,1963;, p. 176. 9 Yu. I . Bokserman: op. c i t . , p. 232; Z.I. Nekrasov: " I s p o l * z o v a i n y e prirodnogo gaza domennom p r o i z v o d s t v e , I s p o l ' z o v a n i y e Gaza v Promyshlennosti. Akad. Nauk. USSR, Tashkent, 1963, p. 97-101. 10 Promyshlennost' SSSR.'1963;, p. 167; U.N. Economic Commission f o r Europe: Comparison of Steel-making P r o c e s s e s . New York, 1962, F i g u r e 3, p. 4. 30. to c h a l l e n g e t h i s monopoly. In the open-hearth furnace the m e t a l l i c charge ( s c r a p and p i g i r o n ) i s p u r i f i e d through the p r o c e s s of o x i d i z a t i o n "by a flame blown d i r e c t l y onto i t . Because flame c o n t r o l w i t h s o l i d f u e l s i s poor and l a b o u r c o s t s h i g h , gaseous and l i q u i d f u e l s have n e a r l y completely r e p l a c e d c o a l i n the steel-making p r o c e s s . Although n a t u r a l gas and f u e l o i l f u r n i s h s l i g h t l y d i f f e r e n t flames but t h i s produces no a p p r e c i a b l e d i f f e r e n c e i n the working of the open-hearth furnace or the q u a l i t y of the s t e e l produced, and may be used i n t e r c h a n g e a b l y as economy d i c t a t e s . Most companies i n the U.S.A. now u t i l i z e both f u e l s i n t h e i r f u r n a c e s , purchasing gas cheaply on an i n t e r r u p t i b l e b a s i s d u r i n g the summer p e r i o d of low demand f o r n a t u r a l gas and s w i t c h to o i l d u r i n g the w i n t e r months. In a few i n s t a n c e s , b l e n d i n g i s p r a c t i s e d . On the whole, however, n a t u r a l gas p r o v i d e s a h i g h e r percen-11 tage of t o t a l c a l o r i e s than f u e l o i l . In the USSR, the r e l a t i v e s i g n i f i c a n c e of n a t u r a l gas i n open-hearth f u r n a c e s may soon become even g r e a t e r . The great b u l k of S o v i e t o i l i s h i g h l y s u l f u r o u s , and of a l l i m p u r i t i e s , s u l f u r i s the most harmful to both p i g i r o n and s t e e l . The h i g h q u a l i t y Caucasian o i l has been i n g r e a t demand i n the m e t a l l u r g i c a l c e n t e r s of the E a s t e r n Ukraine and the U r a l s . But i t i s r e l a t i v e l y s carce as w e l l as expensive. A t p r e s e n t , the m a j o r i t y of open-hearth furnaces s t i l l operate on a mixture of coke-oven and b l a s t - f u r n a c e gases, which have 11 American Iron and S t e e l I n s t i t u t e : Report of Tech-n i c a l Committee on Open-Hearth and B a s i c Oxygen S t e e l Making. 1964, passim 31. 12 low heat v a l u e . C o n s i d e r a b l e a t t e n t i o n i s t h e r e f o r e p a i d to the more i n t e n s i v e u t i l i z a t i o n of n a t u r a l gas i n open-hearth 13 f u r n a c e s throughout the USSR. The open-hearth o p e r a t i o n , however, i s no l o n g e r the most e f f i c i e n t p r ocess of steel-making, and not many open-h e a r t h f u r n a c e s w i l l be b u i l t from now on. The f u t u r e i s 14 f o r the oxygen c o n v e r t e r , which r e q u i r e s no f u e l . The t e c h -n o l o g i c a l development, t h e r e f o r e , seems to bode i l l f o r n a t u r a l gas i n the steel-making p r o c e s s . One must remember, however, t h a t due to sheer i n e r t i a and h i g h c a p i t a l investment open-hearth f u r n a c e s w i l l continue to provide the dominant share of s t e e l output over the next decade or two. Moreover, the p o s s i b i l i t y of u s i n g e x t e r n a l heat i n oxygen c o n v e r t e r s which would combine the b e s t f e a t u r e s of both the open-hearth and the c o n v e r t e r p r o c e s s , cannot be r u l e d out, and indeed was 15 a l r e a d y suggested. F i n a l l y , i f f o r t e c h n o l o g i c a l reasons, n a t u r a l gas w i l l be unable to g a i n a market i n the newest s t e e l m i l l s and e v e n t u a l l y l o s e some of i t i n the o l d ones, 12 V.F. Andreyev et a l : Ekonomika Chernoy M e t a l l u r g i i  SSSR. M e t a l l u r g i z d a t , Moskva, 1963, p. 160 and 191. 13 See f o r i n s t a n c e : V.B. K a r b i v n i c h i y - K u z n e t s o v : "Uluchsheniye I s p o l ' z o v a n i y a Prirodnogo Gaza p r i O t o p l e n i i Martenovskikh Pechey, " I s p o l 1 z o v a n i y e Gaza v Promyshlennosti, Tashkent, 1963, p. 102-130 and Yu. I. Bokserman: op. c i t . , p. 235-242; V.P. Andreyev et a l : op. c i t . , p. 191-92. 14 U.N. Economic Commission f o r Europe: Comparison of  Steel-making P r o c e s s e s , New York, 1962, p. 12, 54. 15 I b i d . , p. 82. 32. i t may f i n d compensation i n i t s i n c r e a s i n g a p p l i c a t i o n f o r the p r o d u c t i o n of p i g i r o n . Both b l a s t f u r n a c e s and' p r e - r e d u c i n g v e s s e l s u t i l i z e i t to an i n c r e a s i n g degree. Because b l a s t furnaces are immensely expensive, i r o n works hope to meet i n c r e a s i n g demand by t e c h n o l o g i c a l improvement r a t h e r than new c o n s t r u c t i o n . NATURAL GAS IN THE CHEMICAL INDUSTRY The chemical i n d u s t r y u t i l i z e s n a t u r a l gas both as f u e l and as raw m a t e r i a l . I t a l s o makes use of the s u l f u r , o f t e n found i n n a t u r a l gas, c o n s t i t u t i n g a harmful i m p u r i t y which must be e x t r a c t e d . As f u e l , gas i s used c h i e f l y under b o i l e r s to produce steam and may be r e p l a c e d by any f u e l as economy d i c t a t e s . Most branches of the chemical i n d u s t r y r e q u i r e a g r e a t d e a l of thermal energy which - together with e l e c t r i c i t y -may c o n s t i t u t e h a l f the t o t a l c o s t of a p a r t i c u l a r product. S i n c e n a t u r a l gas has been g e n e r a l l y cheaper than other f u e l s , i n those c o u n t r i e s where i t i s a v a i l a b l e i n l a r g e amounts, i t serves as the most important producer of thermal energy f o r the. chemical i n d u s t r y . As f u e l , i t s r o l e i s simple and, because i t i s burned c h i e f l y under b o i l e r s , i s s i m i l a r to t h a t p l a y e d i n the p r o d u c t i o n of e l e c t r i c i t y . More i n t e r e s t i n g , and i n many r e s p e c t s more important, i s i t s r o l e as a chemical raw m a t e r i a l , e s p e c i a l l y s i n c e once i t i s used as a chemical f e e d s t o c k , i t almost i n v a r i a b l y p r o v i d e s the necessary thermal energy a l s o . 33. Natural G-as a a Raw Material The u t i l i z a t i o n of natural gas and natural gas l i q u i d s as chemical raw materials cannot be understood without some knowledge of technology, a l l the more so since they can be read i l y replaced by refinery products, derived from crude o i l . Natural gas, as wel l as crude o i l , i s a mixture of hydrocarbon molecules and, i n addition, frequently contain impurities. A hydrocarbon molecule i s made up of carbon and hydrogen atoms i n various arrangements. By f a r the most impor-tant i s the open chain series known as paraffins which, together with some impurities, compose natural gas, l i q u i d petroleum gases, as wel l as the largest f r a c t i o n of most petroleum, condensates and natural gasoline. The p a r a f f i n series consists of methane (CH^), ethane {G^Q) t propane (C^HQ), butane (C^H^Q) and pentane plus ( O ^ H ^ to CgH-]_g). Natural gas i s "dry", when composed overwhelmingly of methane, and "wet1*, when propane, butane, pentane, make up a large percentage. When the gas i s processed, the propane, butane, pentane and, to some extent, ethane fra c t i o n s are extracted from the gas and l i q u e f i e d . Liquefied petroleum gases, especially propane and butane, are the most important raw materials for the manufacturing of organic petrochemicals. (The term "petrochemical" refers to chemical elements and com-pounds produced from o i l and natural gas hydrocarbons and sold for chemical uses. Organic chemicals generally contain carbon molecules while inorganics do not. Organic petrochemicals serve as chief raw materials for the synthetic industries, 34. while inorganic petrochemicals are used mainly as f e r t i l i z e r s . ) The production of petrochemicals involve a large number of complicated processes, which i n essence change and re-arrange the hydrocarbon molecules, combine them with other elements and each other. Pa r a f f i n s , the most important hydro-carbon feedstocks, however, are by nature unreactive and do not combine with other elements. To make them reactive therefore, they are made to lose some hydrogen atoms: ethane thus turns into ethylene, propane into propylene, butane into butylene, and so on. Such hydrocarbon molecules are c a l l e d o l e f i n s and are very reactive. Methane, the simplest hydrocarbon and the main constituent of natural gas contains only one carbon atom and does not, therefore, have an o l e f i n . Two methane mole-cules, however, as well as the other p a r a f f i n s , may be turned into acetylene (H-CSC-H), which i s extremely reactive on account of the t r i p l e bond. But t h i s process requires higher temperatures and energy inputs than the forming of o l e f i n s . Olefins are the chief basic chemicals used i n organic synthesis. Their major source i s LPG's (from wet natural gas) & Por example: H H H H H H H H H H I I \ / I I I 1 1 / H—C — C—H C = C H— C — C — C — H H - C — C = C I I / \ I I I I \ H H H H H H H H H ethane ethylene propane propylene Ethylene i s also made from propane by the more dr a s t i c (but cheaper) method of knocking off one C and four H atoms. 35. and p e t r o l e u m f e e d s t o c k s . I n the U n i t e d S t a t e s , f o r i n s t a n c e , h a l f o f a l l e t h y l e n e i s d e r i v e d f r o m wet n a t u r a l gas and some 45 per cent f r o m ( o i l ) r e f i n e r y g a s e s . I n E u r o p e , most e t h y l e n e as w e l l as p r o p y l e n e and b u t y l e n e , i s produced from 16 o i l . Thus, wet n a t u r a l gas has t o compete w i t h p e t r o l e u m i n th e p r o d u c t i o n o f the s e "basic c h e m i c a l s and l o c a l c o n d i t i o n s d e t e r m i n e w h i c h source i s used. Dry n a t u r a l gas cannot be u t i l i z e d e c o n o m i c a l l y f o r t h i s purpose because the r e q u i r e d f e e d s t o c k s , ethane, propane, butane, a r e p r e s e n t i n v e r y low c o n c e n t r a t i o n . Because methane has no o l e f i n s , i t i s l e s s u s e f u l i n o r g a n i c s y n t h e s i s t h a n the above f r a c t i o n s , a l t h o u g h a few h i g h l y i m p o r t a n t o r g a n i c c h e m i c a l s ( e . g . m e t h y l a l c o h o l and formaldehyde) a r e made from i t on a l a r g e s c a l e . I t i s , however, a b a s i c f e e d s t o c k f o r the p r o d u c t i o n o f i n o r g a n i c s , such as ammonia, u r e a and o t h e r n i t r i c f e r t i l i z e r s . Methane can a l s o be c r a c k e d t o form a c e t y l e n e w h i c h v i e s w i t h e t h y l e n e as a v e r s a t i l e raw m a t e r i a l f o r a h o s t o f o r g a n i c p e t r o -c h e m i c a l s . Because i t s g r e a t e r i n v e s t m e n t , f u e l and e l e c t r i -c i t y r e q u i r e m e n t s , however, a c e t y l e n e a l w a y s found i t h a r d t o compete w i t h e t h y l e n e . I n 1961, t h e U n i t e d S t a t e s produced over f i v e and a h a l f b i l l i o n pounds o f e t h y l e n e ( t h e most i m p o r t a n t o l e f i n ) a g a i n s t some 200 m i l l i o n pounds o f a c e t y l e n e d e r i v e d from n a t u r a l gas. (Only about a q u a r t e r of a l l a c e t -y l e n e i s d e r i v e d from h y d r o c a r b o n s o u r c e s ; a l m o s t a l l of i t R i c h a r d F. G o l d s t e i n : The P e t r o l e u m C h e m i c a l I n d u s t r y . 2nd e d i t i o n , London, E. & P.M. Spon, 1958, p. 107; Dept. o f Commerce and I n d u s t r y , Oklahoma: The M a n u f a c t u r e o f E t h y l e n e  and i t s M a j o r D e r i v a t i v e s i n Oklahoma, pamphlet, p. I l l - 1. 36. 17 from methane the r e s t i s made from c o a l v i a c a l c i u m c a r b i d e . ) The disadvantageous p o s i t i o n of a c e t y l e n e , versus ethylene i s the c h i e f reason f o r the r e l a t i v e l y meager use of dry n a t u r a l gas f o r organic s y n t h e s i s . However, i n c e r t a i n r e g i o n s a c e t y l e n e - and t h e r e f o r e dry n a t u r a l gas - may become com p e t i t i v e f o r the p r o d u c t i o n of s y n t h e t i c m a t e r i a l s . By u s i n g the p a r t i a l combustion p r o -cess ( r e a c t i o n of methane w i t h oxygen), the manufacturing of a c e t y l e n e i s combined w i t h t h a t of s y n t h e s i s gas (G0fHo)» the 18 c h i e f raw m a t e r i a l f o r b o t h ammonia and methyl a l c o h o l . I t i s easy to see th a t a c e t y l e n e p r o d u c t i o n by the above method appears a t t r a c t i v e enough where ammonia or methyl a l c o h o l can a l s o be p r o f i t a b l y marketed. Dur i n g the manufacturing of one ton of a c e t y l e n e , t e n to eleven thousand cub i c meters of s y n t h e t i c gas i s a l s o obtained, enough to make 4.2 tons of ammonia or 3.4 tons of methyl a l c o h o l . To o b t a i n a u n i t amount of ammonia p l u s a c e t y l e n e by t h i s p rocess r e q u i r e s only a l i t t l e more n a t u r a l gas - used both as raw m a t e r i a l and f u e l -than by the methane-steam process ( a l s o v i a s y n t h e s i s g a s ) , 19 which i s the cheapest way to produce ammonia a l o n e . A c e t y l e n e by the e l e c t r i c or thermal c r a c k i n g of methane i s more ex-pen s i v e , but may prove economic i n areas which do not have 17 The O i l and Gas J o u r n a l , Jan. 13, 1964, p. 47. 18 R i c h a r d F. G o l d s t e i n : op. c i t . , pp. 3846 and 262-67. 19 Vysstavka D o s t i z h e n i y Narodnogo Khozyaystva SSSR,Nov., 1963, p. T r a n s l a t e d i n U.S. JPSS 22744, p. 79; N.A. S i m u l i n : " R a z v i t i y e azotnoy p r o m y s h l e n n o s t i , M Khimicheskaya Promyshlennost*, No. 1, 1964, p. 8. 37. a c c e s s to cheap IPG's or r e f i n e r y gases hut possess dry n a t u r a l gas and low-cost power - e i t h e r from gas or other sources. The p r o d u c t i o n of IPG's and indeed of a l l l i q u i d gases i n the USSR i s s t i l l very undeveloped. Russian data and t e r -minology i s o f t e n c o n f u s i n g on t h a t s u b j e c t . The term "szhizhennye gazy" i s sometimes being used to r e f e r to l i q u i f i e d propane and butane, sometimes to a l l n a t u r a l gas l i q u i d s and sometimes to a l l l i q u i d gas i n c l u d i n g r e f i n e r y l i q u i d gases as w e l l . Be t h i s as i t may, i n 1962, t o t a l p r o d u c t i o n of "szhizhennye gazy" i n the USSR amounted to l e s s than 1 per cent of l i q u i d gases produced by g a s - p r o c e s 3 i n g p l a n t s i n the U n i t e d S t a t e s . (Output i n the S o v i e t Union was 1.3 m i l l i o n tons a g a i n s t n e a r l y 39.5 m i l l i o n tons i n the U.S. In the l a t t e r c ountry, an a d d i t i o n a l 13.3 m i l l i o n tons of l i q u i f i e d gas was produced i n petroleum r e f i n e r i e s , w h i l e i n the S o v i e t Union r e f i n e r i e s produced only about 160,000 tons.) In 1963 the 20 S o v i e t p l a n c a l l e d f o r 1.8 m i l l i o n tons from both sources. O i l - w e l l gases r e p r e s e n t the most v a l u a b l e source of n a t u r a l gas l i q u i d s , but the u t i l i z a t i o n of these gases i n the USSR i s proceeding very i n a d e q u a t e l y . D e s p i t e constant complaints, only some 60 per cent o f a s s o c i a t e d gases, r e -l e a s e d d u r i n g petroleum p r o d u c t i o n , i s u t i l i z e d today, the r e s t i s f l a r e d or vented. And only t w o - f i f t h s of the p o r t i o n 20 "Gazovaya promyshlennost* - moshchnaya basa r a z v i t i y a Bolshoy K h i m i i , " Gazovaya Promyshlennost*, Ho. 1, 1964, p. 28; D.A. Tsvetkov: " I s p o l ' z o v a n i y e szhizhennykh gazov v narodnom Khozyaystve SSSR," Gazovoye Delo, No. 11, 1963, p. 42; L.P. Gas, A p r i l , No. 4, 1963, p. 36; Butane-Propane News, No. 10, 1962, p. 53. P r o d u c t i o n by r e f i n e r i e s i n the USSR was obtained by s u b t r a c t i n g p r o d u c t i o n by g a s - p r o c e s s i n g p l a n t s g i v e n i n G.P. from t o t a l f i g u r e , given i n G.D. 38. not wasted — some 4 b i l l i o n c u b i c meters i n 1963 — i s pro-21 cessed, the g r e a t e r p a r t i s burned as f u e l . An acute shortage o f gas p r o c e s s i n g p l a n t s h o l d s up the development of the LPG i n d u s t r y . At the be g i n n i n g of 1964, the USSR had, a t most, a dozen such p l a n t s and some of them s t i l l work f a r below f u l l 22 c a p a c i t y . The Seven Year P l a n had f o r e c a s t the c o n s t r u c t i o n of 20 g a s - p r o c e s s i n g works, but i t i s now c e r t a i n t h at t h i s 23 o b j e c t i v e w i l l not be reached f o r another few y e a r s . One important consequence of t h i s shortage i s t h a t the budding p e t r o c h e m i c a l i n d u s t r y i n the USSR i s l a r g e l y d e p r i v e d of the most convenient and perhaps the cheapest raw m a t e r i a l s f o r o r g a n i c s y n t h e s i s . T h i s i s a l l the more t r u e s i n c e the l a r g e r p o r t i o n of l i q u i d gases i s not used as chemical f e e d -s t o c k but as f u e l . (Propane and butane are very important i n r u r a l households while h e a v i e r hydrocarbons r e a d i l y serve as motor f u e l ) . I n t r y i n g t o d i v i n e the r o l e t h a t n a t u r a l gas w i l l p l a y i n the development of S o v i e t p e t r o c h e m i c a l i n d u s t r y , one must remember t h a t wet o i l - w e l l gases - the main source of LPG's -re p r e s e n t l e s s than 20 per cent of the t o t a l n a t u r a l gas output 21 S.A. Orudzhev: op. c i t . , Heftyanoye . .Khozyaystvo, No. 3, 1964, p. 3; D.A. Tsvetkov; op. c i t . , Gazovoye Delo, No. 11, 1963, p. 43; M. Sidorenko: "Gaz-soyuznik khimikov," Ekonomicheskaya Gazeta, No. 9, 1963, p. 8. 22 Ekonomicheskaya Gazeta, Eeb. 1, 1964, p. and Nov. 9, 1963, p. 8; V . I . L i z i n : "Nekotorye ekonomicheskiye p o k a z a t e l i p o l u c h e n i y a z h i d k i k h produktov i z nefyanogo gaza," Gazovoye  D e l o , No. 8, 1963, p. 50; A.S. Shaposhnikov: "Srednye-Volzhskiy ekonomicheskiy rayon - f o r p o s t k h i m i i , " V e s t n i k Moskovskogo U n i v e r s i t e t a , No. 2, 1964, p. 6; Gazovaya Promyshlennost, No.11, 1963, p. 4. 23 "Poputnye nefyanye gazy, "Gazovaya Promyshlennost, No. 5, 1959, p. 1. 39. of the USSR. (Though t h e i r share c o u l d "be r a i s e d to 30 per cent i f a l l amounts r e l e a s e d -were u t i l i z e d . ) Table "V p r e s e n t s the chemical composition of S o v i e t gases, both f r e e and asso-c i a t e d . I t can be observed t h a t most of R u s s i a ' s f r e e gases a r e very d r y . Methane i s preponderant even i n the condensate d e p o s i t s , and b e s i d e s methane many of them c o n t a i n only ethane i n a p p r e c i a b l e q u a n t i t i e s . A s s o c i a t e d ( o i l -well) gases are r i c h i n the ethane to pentane f r a c t i o n s , although those of Azerbaydzhan are s u r p r i s i n g l y "dry" c o n s i d e r i n g t h a t they are d e r i v e d from o i l w e l l s . Only i n the Middle Volga, however, are "wet" gases produced i n r e a l l y s i g n i f i c a n t q u a n t i t i e s , w h i l e a g a i n i t i s only i n the Volga Region and i n Krasnodar Kray that gases from gas w e l l s c o n t a i n more than a n e g l i g i b l e amount of h e a v i e r p a r a f f i n f r a c t i o n s . I t i s , t h e r e f o r e , easy to understand why S o v i e t p l a n n e r s a t t a c h so great importance to a c e t y l e n e , e s p e c i a l l y when combined w i t h the manufacturing of ammonia, urea, and other n i t r i c f e r t i l i z e r s . The p r i n c i p a l S o v i e t a g r i c u l t u r a l r e g i o n s possess r i c h r e s o u r c e s of n a t u r a l gas, or have l o n g - d i s t a n c e p i p e l i n e s p a s s i n g through them. A t the same time, these same r e g i o n s are i n d i r e need of n i t r i c f e r t i l i z e r s , the manufacturing of which can p r o f i t a b l y be combined w i t h that of a c e t y l e n e as o u t l i n e d above. Si n c e LPG p r o d u c t i o n i s i n c r e a s i n g r a t h e r slowly due to the l a c k of g a s - p r o c e s s i n g p l a n t s , and s i n c e they would have to be shipped to most r e g i o n s by r a i l , i n many areas the new o r g a n i c p e t r o c h e m i c a l p l a n t s seem to be b e t t e r based on dry n a t u r a l gas ( v i a a c e t y l e n e ) than on "imported" LPG's ( v i a 40. Table V Average Chemical Composition of Gases i n the Major S o v i e t D e p o s i t s Prom Gas W e l l s Composition of gas (percent of t o t a l volume) D e p o s i t s CH 4 C 2 H 6 C 3 H 8 C4H10 c5HT.2 0 0 2 HgS' N2+ r a r e . &hger. elements S t a v r o p o l ' Kray 98.6 0.40 0.14 0. 06 — 0.10 -- 0.70 Krasnodar Kray 92.9 6.00 0.50 - - 0.50 0.01 — 0.09 Western Ukraine 98.5 0.25 0.20 0. 15 0.10 — . 0.80 Saratov O b l a s t ' 92.2 2.60 1.10 0. 40 0.05 0.28 3.37 Volgagrad O b l a s t ' 96.7 0.96 1.19 0. 09 0.11 0.25 1.70 Kuybyshev O b l a s t ' 75.3 6.20 1.94 0. 90 0.80 0.58 0.37 13.96 Orenburg O b l a s t * . 73.6 6.00 1.70 0. 52 1.10 0.28 0.28 16.50 G a z l i 98.1 1.60 0.03 - - 0.05 0.12 -- 0.10 S h e b e l i n k a 92.9 4.5 0.8 0. 6 0.6 0.1 _ _ 0.5 Stepnoye (Saratov O b l a s t ' ) 95.1 2.3 0.7 0. 4 0.8 0.2 — 0.5 Kanevskoye (Krasnodar Kray) 88.8 4.8 1.4 0. 5 1.8 0.2 —— 2.5 B u s s k i y Khutor 69.1 11.3 3.3 1. 7 8.6 2.7 — 3.3 Karadag (Az e rbayd zhan) 93.4 2.2 1.4 1. 1 1.2 0.5 —— 0.5 From O i l W e l l s Azerbaydzhan 91.8 4.49 1.62 1. 08 0.81 0.20 —-T a t a r ASSR 48.0 16.6 16.1 7. 30 2.90 -- — 9.10 B a s h k i r ASSR 41.0 19.7 17.0 7. 30 3.20 0.20 -- 11.60 Kuybyshev O b l a s t ' 68.5 12.5 5.5 4. 00 2.50 1.50 3.00 1.50 Krasnodar Kray 65.5 10.3 9.4 6. 80 6.50 1.00 — 0.50 Western Ukraine 30-45 51-76 not ; g i v e n (approx*) Source; Yu. I . Bokserman: op. c i t . , p. 53-54 (Tables 21, 22, 2 3 ) ; V. B a y e v i c h : "Developing gas and o i l p r o d u c t i o n i n tne U k r a i n e , " Rabochaya Gazeta, Nov. 27, 1963; t r a n s l a t e d i n US JPRS 22785, p. 17; Ya. D. Savvina: "Kondenzaty i z gazokon-denzatnykh zalezhey mestorozhdeniya "Russky Khutor"," Gazovoye D e l o , No. 9, 1963, p. 15. 41. o l e f i n s ) . P a r t s of the U k r a i n e and o f the N o r t h Caucasus, the whole of M i d d l e A s i a , the C e n t r a l R e g i o n c o u l d f a l l i n t o t h a t c a t e g o r y . I n r e g i o n s such as E a s t S i b e r i a , w h i c h "boast e x t r e m e l y cheap energy, a c e t y l e n e p r o d u c t i o n f r o m methane c o u l d 24 become economic even by the e l e c t r i c c r a c k i n g p r o c e s s . I t seems, t h e r e f o r e , t h a t b o t h wet and d r y gases v / i l l p r o v e e s s e n t i a l as raw m a t e r i a l s to t h e d e v e l o p i n g p e t r o -c h e m i c a l i n d u s t r y of the USSR. Due t o f o r c e s o f l o c a t i o n , d r y n a t u r a l gas i n the S o v i e t U n i o n seems t o be i n an econ-o m i c a l l y more f a v o u r a b l e p o s i t i o n v i s a v i s o t h e r h y d r o c a r b o n s o u r c e s than i t i s i n the U n i t e d S t a t e s . The two k i n d s o f g a s e s , however, have advantages i n v e r y d i f f e r e n t r e g i o n s due t o the i n f l u e n c e o f t e c h n o l o g y and t r a n s p o r t . As f u e l s , t h e i r cheapness and g r e a t c onvenience g u a r a n t e e s t h e i r i n t e n s i v e u t i l i z a t i o n i n t h a t energy-hungry i n d u s t r y . HOUSEHOLD AND MUNICIPAL CONSUMPTION The most s t r i k i n g d i f f e r e n c e between the consumption of n a t u r a l gas i n t h e USSR and t h e U n i t e d S t a t e s a p p e a r s i n the h o u s e h o l d and m u n i c i p a l s e c t o r s . The s m a l l share of o n e - t e n t h v e r s u s o n e - t h i r d i s s t i l l more ap p a r e n t when one c o n s i d e r s t h e f a c t t h a t the S o v i e t f i g u r e seems to i n c l u d e b o t t l e d propane and butane d e l i v e r e d m a i n l y to r u r a l and s m a l l town house-h o l d s . Consumption of b o t t l e d gas i n US s t a t i s t i c s i s t r e a t e d s e p a r a t e l y f r o m t h a t o f n a t u r a l gas, but o ver 40 per c e n t o f 24 N. Pedorenko and A. Vayn:  nK problems r a z m e s h c h e n i y a k h i m i c h e s k o y i n d u s t r i i , n P l a n o v o y e - K h o z y a y s t v o , No. 5, 1964, p. 30. 42. the very c o n s i d e r a b l e propane-butane p r o d u c t i o n (176 m i l l i o n 25 tons i n 1962) i s consumed by the domestic s e c t o r . A t the beginning of 1963, a f u l l 30 percent of a l l l i v i n g q u a r t e r s i n the USSR (1,637,800 out of a t o t a l of 26 5,398,500) r e c e i v e d gas not through p i p e l i n e s but i n c y l i n d e r s . Assuming f i v e people per household, n a t u r a l gas-- b o t t l e d gas i n c l u d e d — was a v a i l a b l e to only 12 percent of the S o v i e t p o p u l a t i o n . A c c o r d i n g to the t a r g e t of the Seven Year P l a n , which may not be reached, only a qua r t e r of the S o v i e t popu-27 l a t i o n was hoped to be s u p p l i e d by the end of 1965. The g e n e r a l n e g l e c t o f the r e s i d e n t i a l s e c t o r and the r e l a t i v e importance of b o t t l e d gas are r e f l e c t e d by the f a c t t h a t the l e n g t h of the S o v i e t d i s t r i b u t i o n l i n e s i s much s m a l l e r than t h a t of the t r a n s m i s s i o n network (17,600 km. v s . 25,300 i n 1962), w h i l e i n the Un i t e d S t a t e s , the l e n g t h of the d i s t r i -b u t i o n system i s more than twice t h a t of the t r a n s m i s s i o n 28 l i n e s (427,600 m i l e s v s . 200,200 m i l e s i n the same y e a r ) . I t i s f a i r to p o i n t out, however, t h a t the share o f household and m u n i c i p a l s e c t o r s i n the consumption of n a t u r a l gas i s somewhat un d e r s t a t e d . The m a j o r i t y of S o v i e t thermal s t a t i o n s , and n e a r l y a l l of them i n l a r g e urban c e n t e r s , are 25 L. P. G s, A p r i l , (No. 64), 1963, p. 36; Butane-P opane News, No. 10, 1962, p. 53. . 26 "Gazovaya p r o m y s h l e n n o 3 t * v 1962 g.," Gazovaya Promysh-l e n n o s t , No. 10, 1963, p. 55. 27 Yu. I . Bokserman, op. c i t . , Pianovoye Khozyaystvo, March, 1960, p. 31. 28 N.I. Novikov: op. c i t . , Gazovoye Delo, No. 5, 1963, p. 5, U.S. M i n e r a l Yearbook, 1962, p. 332. 43. s o - c a l l e d t h e r m a l e l e c t r i c c e n t e r s (TETs) w h i c h produce n ot o n l y e l e c t r i c i t y b u t a l s o b y - p r o d u c t h e a t f o r h o u s e h o l d s and f a c t o r i e s . Pages 103-104, Ghapter V, shows t h e i r i mportance i n the C e n t r a l R e g i o n and the C i t y o f Moscow. T h i s p r a c t i c e , c a l l e d t o p l i f i k a t s i y a , u n d o u b t e d l y r a i s e s the share o f the d o m e s t i c s e c t o r i n the consumption o f n a t u r a l gas t o some degree. Two f u r t h e r q u a l i f i c a t i o n s , however, must be made. P i r s t , t h i s p r a c t i c e a l s o r a i s e s the share of the i n d u s t r i a l s e c t o r . S i n c e much of the steam r e q u i r e d i n i n d u s t r y i s a l s o p r o v i d e d o r 29 p l a n n e d t o be p r o v i d e d by TETs's, the i n c r e a s e i n the share o f c e r t a i n i n d u s t r i a l s e c t o r s may.be even g r e a t e r . S e c o n d l y , much n a t u r a l gas i n the U.S. homes i s u t i l i z e d v i a e l e c t r i c i t y , much more th a n i n S o v i e t h o u s e h o l d s . I f i n d i r e c t uses o f gas, such as t o p l i f i k a t s i y a , a r e a l l o w e d f o r i n the case o f the USSR, i n d i r e c t uses t h r o u g h e l e c t r i c i t y s h o u l d a l s o be con-s i d e r e d f o r the U n i t e d S t a t e s . 29 See, f o r i n s t a n c e , N. N e k r a s o v : op. c i t . , Y o p r o s y  E k o n o m i k i , Ho. 3, 1964, p. 31-32. 44. Chapter I I I RESERVES 45. Hydrocarbon reserves are notoriously d i f f i c u l t to e s t i -mate; they can be proved only by the d r i l l i n g of w e l l s . Natural gas reserves can be r e l i a b l y appraised even from one w e l l , provided that i t had produced enough to make a measurable decline 1 i n the reservoir pressure. This l a t t e r , however, i s a c r u c i a l l i m i t a t i o n for i t r e s t r i c t s trustworthy estimates to developed areas and e s s e n t i a l l y to producing f i e l d s . In addition, the "proved reserves" concept, used by the gas industry, l i m i t s reserves to those recoverable under present operating prac-t i c e s . Thus, i n the l a s t analysis, i t i s a function of pro-duction. I t s role i s c r u c i a l f or the immediate future and d i s t r i b u t i o n of the industry but i s obviously inadequate for any long-term forecast. Any other estimates, however, are uncertain. They are usually based on geological studies of sedimentary basins and on past and present production of known petroliferous provinces. Es p e c i a l l y d i f f i c u l t i s the evaluation of gas reserves con-tained i n petroleum reservoirs: these are generally calculated 2 from g a s - o i l r a t i o s applied to crude-oil estimates. Soviet categories of reserves are only p a r t l y comparable to those used i n the United States or Canada. The main cate-gories used by the Soviet o i l and gas industries are A, B, C-j_ and C£» to which two extremely uncertain further d i v i s i o n s -Kenneth K. Landes. Petroleum Geology, Wiley, New York, 1962, p. 237. 2 Sam H. Schurr and Bruce C. Netschert: op. c i t . , pp. 391-92 and pp. 401-410. 46. a r e sometimes added. C a t e g o r y A r o u g h l y c o r r e s p o n d s t o US "proved r e c o v e r a b l e r e s e r v e s ' 1 , though S o v i e t r e c o v e r y e x p e c t -a t i o n s a r e s e t h i g h e r than the A m e r i c a n , w h i l e C a t e g o r y B s t a n d s f o r r e s e r v e s w h i c h a r e f u l l y s u r v e y e d as t o q u a n t i t y though i n c o m p l e t e l y as t o q u a l i t y , r e c o v e r a b i l i t y and e x a c t d i s t r i b u t i o n of p r o d u c t i v e s t r a t a . I n p u b l i s h e d s t a t i s t i c s A and B a r e u s u a l l y combined under the t e rm " i n d u s t r i a l r e s e r v e s " . They a r e used i n comparisons w i t h US "proved r e s e r v e s " e s t i m a t e s b o t h i n S o v i e t s o u r c e s and i n t h i s p a p e r , though i t i s c l e a r t h a t v i s a v i s the A m e r i c a n c l a s s i f i c a t i o n t h e S o v i e t f i g u r e s a r e somewhat i n f l a t e d . C a t e g o r y C^ g e n e r a l l y i n c l u d e s new f i e l d s c o v e r e d o n l y by reconnaissance p r o s p e c t i n g or such h o r i z o n s i n o l d e r de-p o s i t s . A, B and C^ combined and c a l l e d " b a l a n c e r e s e r v e s " embrace a l l f i e l d s d i s c o v e r e d t o date and a p p r o ximate US e s t i -mates of the r e s e r v e s o f known r e s e r v o i r s . C a t e g o r y C 2 r e p -r e s e n t s e s t i m a t e s o f f u t u r e d i s c o v e r i e s upon f a v o u r a b l e geo-l o g i c a l and g e o - p h y s i c a l e v i d e n c e s i n a l r e a d y s u r v e y e d p e t r o -l i f e r o u s a r e a s . Though u n c e r t a i n , they must be d i s t i n g u i s h e d f r o m " p r e d i c t e d " or " u l t i m a t e r e s e r v e s " , w h i c h a r e c a l c u l a t e d o n l y f r o m t h e e x t e n t o f s e d i m e n t a r y b a s i n s , most of w h i c h a r e 3 y e t untouched. S l i g h t l y over t h r e e - q u a r t e r s o£ a l l n a t u r a l gas known today i n t h e USSR i s f o u n d i n d i s t i n c t gas d e p o s i t s , w h i l e the r e s t i s c o n t a i n e d i n o i l r e s e r v o i r s , as a gas-cap 4 o v e r l y i n g the c r u d e . _ D m i t r i B. S h i m k i n : op. c i t . , p. 153-54 and p. 157j Y u . I . Bokserman: op. c i t . , p. 19-20. 4 I b i d (Bokserman): p. 27 47. At the beginning of 1963, t o t a l i n d u s t r i a l reserves of natural gas i n the USSR amounted to nearly two t r i l l i o n (2,000,000,000,000) cubic meters, or well over twice the proved reserves of Canada and close to a quarter of that of 5 the United States. Unlike coal, where nine-tenths of the reserves are located east of the Urals, the d i s t r i b u t i o n of natural gas i s more favourable. More than two-thirds of proved reserves and close to a t h i r d of a l l p o t e n t i a l ones are found 6 i n European Russia, where -- i f the Urals are included --f o u r - f i f t h s of a l l f u e l and energy consumption i s concentrated. Mapsllj 2and 3 and Table VI show the detailed d i s t r i b u t i o n of i n d u s t r i a l reserves (Category A & B), and of reserves i n Category C.^  and Cg. It i s worth n o t i c i n g that nearly nine-tenths of a l l natural gas known today i s found i n only four areas: the North Caucasus, the Ukraine, Uzbekistan and the Volga. Three giant f i e l d s alone -- G a z l i , Shebelinka and North-Stavropol 1 — 7 account for nearly h a l f of a l l gas discovered to date. The large extent of sedimentary basins i n S i b e r i a , where the presence of gas has already been proved, however, also deserves notice. With the continuing attention given to the develop-ment of the southern part of S i b e r i a , the discovery and ex-p l o i t a t i o n of large f i e l d s could be expected. In addition, Western S i b e r i a i s i n a better geographic p o s i t i o n to provide -Ibid..p. 17 and.28. 6 I b i d i , p . 24 and 28. 7 Yu. I. Bokserman; op. c i t . , p. 27 48. Table VI Reserves of N a t u r a l Gas A + B A+ B + Ci A + B + C 1 + C2 b i l l . per b i l l . per b i l l . per REGIONS cu.m. cent cu.m. cent cu.m. cent USSR 1942.1 100.0 2786.5 100.0 6091.3 100.0 RSESR 930.1 48.0 1315.4 46.4 2002.6 33.0 V o l g a - U r a l s 217.3 11.2 279.6 10.0 732.8 12.1 Kuybyshev Ob. 4.9 _-- 8.3 35.6 Orenburg Ob. 19.1 26.7 . . . 187.8 ---Saratov Ob. 70.4 88.2 --- 138.7 B a s h k i r ASSR 1.9 13.2 — - 69.1 Volgograd Ob. 105.1 114.9 211.4 Astrakhan Ob. -& Kalmyk ASSR 15.7 27.9 90.2 N o r t h Caucasus 634.S 32.7 842.7 29.9 1072.3 17o8 Krasnodar' Kray 376.1 —__ 508.2 _ _ _ 548.2 _ S t a v r o p o l ' Kray 252.2 — - 323.8 505.8 Chechen-Ing.ASSR - — 11.4 Dagestan ASSR «•» » mm- 0.1 Rostov Oblast 5.2 K.-Balkar & S.-Ocetin ASSR's - — 1.6 Komi ASSR 10.2 .6 16.5 0.5 17.5 .15 West S i b e r i a 49.3 2.5 130.1 4.5 130.1 2.1 E a s t S i b e r i a S a k h a l i n Ob. 18 .5 1.0 46.5 1.5 46'. 7 .75 U k r a i n i a n SSR 373.4 19.2 529.9 20.0 689.0 11.3 West Ukraine 179.9 6.5 — l a s t Ukraine 350.0 12.5 Azerbaydzhan SSR 37.2 1.9 57.4 2.0 101.3 • 1.6 C e n t r a l A s i a 594.4 30.6 866.2 30.9 3262.1 53.6 Uzbek SSR 518.6 26.5 633.2 22.6 969.6 15.9 Turkmen SSR ' 71.2 3.7 219.0 7.8 2246.9 37.0 K i r g i z SSR 4.2 9.9 39.0 Tadzhik SSR 1.4'' 4.1 6.6 Kazakh SSR 6.0 .3 17.6 0.7 36.4 .6' Source: Yu.I. Bokserman: op. c i t . , Table 15, p. .22-24 and Table 18, p. 28. AZERBAIDZHAN CENTRAL ASIA 1965 ^37 A+B+C+C, ( LOGARITHMIC SCALE) -100 ^3000 O i l w e l l gases are excluded from production data. & The f u l l extent of these reserves i s not yet known. 52. gas f o r the U r a l s than C e n t r a l A s i a and should e v e n t u a l l y v i e w i t h the l a t t e r as the c h i e f s u p p l i e r of t h a t i n d u s t r i a l r e g i o n . I t i s evident from the maps (Maps. 1,,2 & 3) and Table VI t h a t the two r i c h e s t p r o v i n c e s a t present are the North Caucasus and Middle A s i a , each a c c o u n t i n g f o r some t h i r t y per cent of the t o t a l i n d u s t r i a l as w e l l as balance r e s e r v e s . Next i n l i n e come the Ukraine and the V o l g a - U r a l , a c c o u n t i n g r e s p e c -t i v e l y f o r a f i f t h and a t e n t h of a l l gas d i s c o v e r e d to date i n the S o v i e t Union. The North Caucasian p e t r o l i f e r o u s a r e a c o n s i s t s of the Azovo-Kuban downwarp, the S t a v r o p o l 1 a n t i c l i n e and the depres-s i o n of the Terek V a l l e y which merges i n t o the Caspian Lowland. The d e p o s i t s are found i n Cretaceous l a y e r s , but both the d e e p e r - l y i n g J u r a s s i c and the c l o s e r T e r t i a r y beds show g r e a t promise. Most of the proved r e s e r v e s are concentrated i n Krasnodar Kray, e s p e c i a l l y i n i t s north-western p a r t , and i n the S t a v r o p o l * P l a t f o r m , occupying the western p o r t i o n of S t a v r o p o l * Kray. Very l i t t l e gas has y e t been d i s c o v e r e d i n the Terek V a l l e y , but the a r e a i s thought to have g r e a t po-8 t e n t i a l s . G i r d l i n g the shores of the Caspian Sea i s a huge a r e a of r e c e n t d e p o s i t i o n extending on the east to the f o o t h i l l s of the Tienshan. I t i s u n d e r l a i n by Mesozoie formations w i t h a number of f o l d s and u p l i f t s on whose f l a n k s very promising. 8 Ibid.-, p. 28 - 31. A f t e r F.J. F O H S , A M . A S S O C . OF P E T R O L E U M G E O L O G I S T S , B U L L E T I N , V O L . 4 6 . 1962 , p. 1978-9 54. 9 p e t r o l i f e r o u s s t r u c t u r e s occur. T h i s may prove to be the p o t e n t i a l l y r i c h e s t p r o v i n c e f o r n a t u r a l gas i n the S o v i e t Union. Small amounts of o i l and gas have been produced on the shores of the Caspian and i n the Fergana B a s i n but r e s e r v e s — e s p e c i a l l y of gas — were i n s i g n i f i c a n t . Then, w i t h the up-surge of p r o s p e c t i n g i n the m i d - f i f t i e s , came the d i s c o v e r y of the Bukhara d e p o s i t s , near the p l a c e where the Zeravshan R i v e r p e t e r s out i n the sand of the southern K y z y l Kum. The Bukhara a r e a now c o n t a i n s over h a l f a b i l l i o n cubic meters of i n d u s t r i a l r e s e r v e s and an a d d i t i o n a l 170 b i l l i o n i n Category C^. T h i s i s not f a r from the known r e s e r v e s of A l b e r t a . One f i e l d alone, G a z l i , accounts f o r over 450 b i l l i o n cubic meters i n C a t e g o r i e s A, B and G-,, that i s , h a l f as much as the g i g a n t i e x 10 Hugoton i n the Texas Panhandle. The two l a r g e Mubarek d e p o s i t s southeast of G a z l i , c o n t a i n 30 b i l l i o n cubic meters each i n 11 the A, B and C]_ c a t e g o r i e s . The presence of gas i n Middle A s i a has now been proved i n numerous p l a c e s to j u s t i f y hopes of other s i m i l a r f i n d s . The Kara Kum P l a t f o r m and the a d j o i n i n g Prekopet Dag D e p r e s s i o n 9 P. J u l i u s Pohs: " P e t r o l i f e r o u s P r o v i n c e s of the USSR -A R e v i s i o n , 1 * B u l l e t i n of the American A s s o c i a t i o n of Petroleum  G e o l o g i s t s . No. 11, 1962, V o l . 46, p. 1982; Yu. I . Bokserman, op. c i t . , p. 44-46. 10 Yu. I . Bokserman; op. c i t . , p. 44; A.M. Lee s t o n . e t a l ; The Dynamic N a t u r a l Gas I n d u s t r y , U niv. of Oklahoma P r e s s , 1963, p. 30, 43, 339. 11 Kh. T. Tulyaganov; "Sostoyaniye i p e r s p e k t i v y g e o l o -gorazvedochnykh rabot na gaz i n e f t * v Uzbekskoy SSR," Gazovoye  D e l o . No. 1, 1963, p. 9. 55. t o t h e s o u t h a r e e s p e c i a l l y a t t r a c t i n g a t t e n t i o n . I n e a r l y 1964 a v e r y p r o m i s i n g s t r i k e was made a t D a r v a z y , i n t h e c e n t e r of the Turkmen SSR,and the f i e l d i s now thought to c o n t a i n some 50 " b i l l i o n c u b i c m e t e r s . E s p e c i a l l y l a r g e d e p o s i t s a r e s u s -p e c t e d i n t h e C r e t a c e o u s and J u r a s s i c beds on t h e s o u t h e r n f l a n k o f the P l a t f o r m but remoteness and d i f f i c u l t p h y s i c a l con-12 d i t i o n s h i n d e r e x p l o r a t i o n . Because of t h e metamorphism o f t h e P a l e o z o i c beds, t e s t s below 2000 - 4700 meters appear un-13 w a r r a n t e d i n M i d d l e A s i a . T h i s h e l p s t o r e duce c o s t s , but may l i m i t somewhat the p o t e n t i a l i t i e s o f the r e g i o n . P r o s p e c t s f o r gas r e s e r v e s a r e v e r y good a l s o i n the C a s p i a n Lowland, where as y e t o n l y the s m a l l Emba r e g i o n i s e x p l o r e d . P r a c -t i c a l l y t h e e n t i r e Lowland i s d o t t e d w i t h underground s a l t domes ana l o g o u s i n s t r u c t u r e t o t h o s e o f the G u l f C o a s t i n L o u i s i a n a and Texas. These, however, o f t e n l i e a t g r e a t depths and have 14 h a r d l y been s t u d i e d . The U k r a i n i a n d e p o s i t s a r e l o c a t e d i n two d i s t i n c t p e t r o l i f e r o u s a r e a s , s e p a r a t e d by the c r y s t a l l i n e r o c k s o f the P o d o l i a n M a s s i f . The West U k r a i n i a n f i e l d s a r e much o l d e r . 12 I z v e s t i y a , March 29, 1964, p. 5; P r a v d a , May 3, 1964, p. 4.; Y u . I . Boksermani op. c i t . , p. 45. 13 E. J u l i u s Eohs; op. c i t . , p. 1982; A t l a s SSSR, Moskva, 1962, p. 72. 14 K.V. D o l g o p o l o v e t a l g H e f t 1 i Gazy SSSR, Moskva, 1960, p. 154; Y u . I . Bokserman: op. c i t . , p. 35; F. J u l i u s Pohs: op. c i t . , p. 977. 56. Together with minor o i l deposits, they are found i n the former Habsburg province of G a l i c i a . Many of them were known even before World War I, although only some of the o i l f i e l d s were producing. Reserves of gas are not very large and they have been exploited longer than most Soviet deposits. The combined balance reserves (A, B and C^ } of some dozen f i e l d s , found i n Jurassic and Upper Tertiary beds, are appraised as 180 b i l l i o n 15 cubic meters. Hemmed i n between the Carpathians and the Podolian Block, t h i s p e t r o l i f e r o u s province extends, however, a l l the way to the Black Sea and the Balkan Mountains, covering also h a l f of Rumania. The presence of gas has already been proved i n the Crimea, north of the Y a i l a Range, and geologists consider the whole of Moldavia a promising area. In addition, the shallow sea of Azov and the Bay of Odessa may become scenes 16 of prospecting i n the future. The East-Ukrainian gas province i s a long, f a i r l y narrow syncline, wedged between the Podolian and Voronezh Massifs. Despite i t s excellent l o c a t i o n , i t was not c a r e f u l l y prospected u n t i l the m i d - f i f t i e s . Small amounts of gas have been found i n ffiesozoie and Late Paleozoic formations at over a dozen places 15 V. Ya. Klimenko: Nafta Ta Prirodniy Goryuchniy Gaz  Ukrainskoy RSR. Akademiya Nauk URSR, Kiev, 1957, p. 13-17 and 30-37; Robert E. King: "Exploration and production i n Europe i n 1963," American Association of Petroleum Geologists, B u l l e t i n , p. 1342,. 16 V. Ya. Klimenko; op. c i t . , p. 49-50; Robert E. King: op. c i t . . American Association of Petroleum Geologists B u l l e t i n , August 1964, p. 1342; A t l a s SSSR. p. 72. 57. and one g i a n t f i e l d a t Sh e b e l i n k a , near the c i t y of Kharkov. I t i s the second l a r g e s t d e p o s i t i n the S o v i e t Union w i t h balance r e s e r v e s of 350 b i l l i o n c u b i c meters; i t s p r o p i t i o u s l o c a t i o n , h i g h f i e l d p r e ssure and r i c h n e s s have made i t the most p r o d u c t i v e f i e l d i n the country. The p o s s i b i l i t i e s of t h i s E a s t - U k r a i n i a n downwarp are by no means exhausted. Re-c e n t l y a h i g h - p r e s s u r e w e l l was blown i n Donets Oblast and g e o l o g i c a l e x p l o r a t i o n i n d i c a t e s t h a t the ga s - b e a r i n g s t r a t a may extend as f a r east as the Don Bend, j o i n i n g the r e g i o n to 17 the V o l g a B a s i n . The Volga and Pechora p r o v i n c e s are now co n s i d e r e d t o be one enormous p e t r o l i f e r o u s a r e a , s t r e t c h i n g from the Caspian to the Kara Sea between the U r a l s and the R u s s i a n P l a t f o r m . I t s n o r t h e r n p a r t i s l i t t l e known y e t , but the Volga B a s i n i s now w e l l e x p l o r e d . The r e g i o n i s famous mainly f o r i t s o i l d e p o s i t s , y e t i t s gas r e s e r v e s are a l s o q u i t e c o n s i d e r a b l e . D i s t i n c t i o n must be made between the n o r t h e r n p a r t of the r e g i o n , comprised of Kuybyshev and Orenburg O b l a s t s and the Tata r and B a s h k i r Autonomous R e p u b l i c s , and i t s southern por-t i o n , made up of Saratov and Volgograd O b l a s t s . In the former a r e a most of the gases are a u x i l i a r y gases a s s o c i a t e d w i t h o i l w e l l s , w h i l e i n the l a t t e r they are mainly f r e e gases. The g a s - o i l r a t i o i n the Middle V o l g a i s f a i r l y l o w — only 40-50 c u b i c meters per ton of o i l compared to 100 cu b i c meters f o r 17 V. Y a . Klimenko: op. c i t . , p. 37-48; Yu. I . Bokserman, op. c i t . . p. 42-43. 58, 18 the USSR average or 340 c u b i c meters f o r the U n i t e d S t a t e s , — n e v e r t h e l e s s , the t o t a l amount of o i l - w e l l gases r e p r e s e n t s a very l a r g e r e s o u r c e . The presence of f r e e gases i n the Lower Volga a r e a were known even b e f o r e the R e v o l u t i o n , and the d e p o s i t s of S a r a t o v are some of the o l d e s t e x p l o i t e d i n the USSR. Y e t , here too, l a r g e - s c a l e p r o s p e c t i n g began only i n the 1950*s. A l t h o u g h most of the f i e l d s are of modest s i z e , t h ree o f them boast c o n s i d e r a b l e r e s e r v e s , between 20 and 30 19 b i l l i o n c u b i c meters each. In c o n t r a s t to the m a j o r i t y of S o v i e t gas d e p o s i t s which are l o c a t e d i n Cretateous and J u r a s s i c beds, those of the V o l g a B a s i n a re found i n P a l e o z o i c formations, o f t e n i n the deep-l y i n g Devonian, which a l s o produces most of R u s s i a ' s o i l . They are a s s o c i a t e d w i t h numerous u p l i f t s p a r a l l e l i n g the U r a l s and 20 the Caspian — Emba D e p r e s s i o n . The Pechora a r e a , which i s but a northward e x t e n s i o n of the V o l g a - U r a l p e t r o l i f e r o u s pro-v i n c e , i s s t i l l very i n a d e q u a t e l y p r o s p e c t e d , though i t i s one of the few areas where gas d e p o s i t s were known to e x i s t even b e f o r e the R e v o l u t i o n . Proved r e s e r v e s do not exceed 20 b i l l i o n 18 I b i d (Bokserman): p. 65; D. M. Shimkin: op. c i t . , p. 131; I r a H. C r a i n : "Impact of S o v i e t O i l , " American A s s o c . of Petroleum G e o l o g i s t s . B u l l e t i n . J u l y 1961, p. 1023. 19 Ibid.(Bokserman): p. 31-39, esp. p. 34; G.S. U r i n s o n et a l : " R a z v i t i y e gazovoy promyshlennosti S a r a t o v i k o y O b l a s t i , " Gazovoye Delo, No. 4, 1963, p. 3. 20 Ibid.(Bokserman): p. 31-39. ! 59. c u b i c meters and there i s l i t t l e hope of augmenting them u n t i l more complete g e o l o g i c a l and g r a v i m e t r i c s t u d i e s have "been c a r -21 r i e d out. L i k e the Middle V o l g a , the TrainsCaucasus, too, i s famous more f o r i t s petroleum than n a t u r a l gas. Here, too, much gas i s found i n o i l w e l l s and t h e i r i n d u s t r i a l use f i r s t began i n t h a t r e g i o n . There are two condensate gas f i e l d s — Karadag and Z y r y a , w i t h combined i n d u s t r i a l r e s e r v e s of 20 b i l l i o n c u b i c meters. They both l i e i n Upper T e r t i a r y beds at the base of the Apsheron P e n i n s u l a . The Lower T e r t i a r y and the s t i l l untouched Mesozoic l a y e r s h o l d g r e a t promise both f o r o i l and n a t u r a l gas, but t h e i r g r e a t depth (3-5000 meters) makes 22 s p e c i a l d r i l l i n g techniques n e c e s s a r y . Only the e a s t e r n Transcaucasus i s p e t r o l i f e r o u s . Armenia c o n t a i n s no sedimentary b a s i n s and t h e i r extent i n the Georgian R e p u b l i c i s minuscule. As can be seen from Map 3, s u b s t a n t i a l r e s e r v e s of n a t u r a l gas have a l r e a d y been proved i n S i b e r i a and the Par E a s t . A l l but two of these d e p o s i t s are l o c a t e d i n the Cre-t a c i o u s beds of the West S i b e r i a n Lowland, a huge p e t r o l i f e r o u s p r o v i n c e which r i v a l s the Volga-Pechora i n s i z e , extending a l o n g the A r c t i c to i n c l u d e the Khatanga B a s i n i n the Taymyr 23 P e n i n s u l a and i n t o Kazakhstan to embrace the Turgay Lowland. 21 I b i d . , p . 28; A. P. A n u f r i y e v : E n e r g e t i c h e s k i y e Resursy  Komi ASSR; Akademiya Mauk SSSR, Moskva, 1963, p. 15. 22 Yu. I . Bokserman: op. c i t . , p. 46. 23 P. J . Pohs: op. c i t . , p. 1978-79. 60. To date, over 20 f i e l d s have "been d i s c o v e r e d i n t h i s a r e a but few of them are explored c a r e f u l l y enough to be i n c l u d e d i n the c a t e g o r y of i n d u s t r i a l r e s e r v e s . Most of these d e p o s i t s are found along the Lower Ob. With few e x c e p t i o n s , they are s m a l l and expensive to e x p l o i t due to complicated g e o l o g i c a l s t r u c -t u r e s although two f i e l d s , the Punga and the Taz, boast w i t h estimated r e s e r v e s of 100 b i l l i o n c u b i c meters each. T h e i r p r o p i t i o u s l o c a t i o n s -- one near the U r a l s , the other near 24 N o r i l s k -- w i l l assure them an important r o l e i n the f u t u r e . By r e c k o n i n g of many S o v i e t g e o l o g i s t s , t h i s huge Trans-U r a l a r e a i s f a b u l o u s l y endowed and may c o n t a i n a t h i r d of a l l u l t i m a t e gas and o i l r e s e r v e s . In the o p i n i o n of some western g e o l o g i s t s , however, the r e l a t i v e shallowness of the b a s i n and the metamorphosis of P a l e o z o i c basement rocks may r e s t r i c t 25 i t s y i e l d . P r o s p e c t i n g i n t h i s a r e a i s d i f f i c u l t and slow. The severe c l i m a t e , impassable swamps, and l a c k of t r a n s p o r t f a c i l i t i e s c r e a t e major problems. P r a c t i c a l l y a l l equipment and p r o v i s i o n have to he flown i n , i n c l u d i n g the clumsy d r i l l -i n g r i g s weighing o f t e n more than f o u r thousand pounds. S p e c i a l types of t w i n - t u r b i n e h e l i c o p t e r s are employed to move the r i g s over hundreds of m i l e s , and wherever p o s s i b l e e x t e n s i v e use i s 24 I . I. N e s t e r o v et a l t N e f t ' S i b i r i , p. 26, 27; Pravda, Ja n . 26, 1964, p. 2; Yu. I . Bokserman: op. c i t . , p. 39; Robert E . K i n g : op. c i t . , American A s s o c i a t i o n of Petroleum G e o l o g i s t s , B u l l e t i n . Aug. 1964, p. 1342. 25 O i l and Gas Journal", June 8, 1964, p. 113; P.J. Pohs, op. c i t . , p. 1974; A t l a s SSSR,- p. 72. 61. 26 made of the r i v e r s . The g r e a t s h i e l d a r e a of n o r t h - c e n t r a l S i b e r i a h o l d s l i t t l e p r o s p ect f o r n a t u r a l gas. However, i t c o n t a i n s a few sedimentary b a s i n s which must be c o n s i d e r e d . Three of them, the Tunguska, Lena and Kolyma-Indigirka are too shallow to show much promise, although t h e i r a r e a l extent i s q u i t e l a r g e . Two o t h e r s , however, are of g r e a t e r v a l u e . In the s m a l l V i l y u y s y n c l i n e b a s i n , which a d j o i n s the Lena, a r i c h d e p o s i t was opened some ye a r s ago a t Tas-Tumus. Though t h i s gas w i l l m a t e r i a l l y a f f e c t the economy of Y a k u t i a , i t s remoteness from a l l c e n t e r s of p r o d u c t i o n renders i t i n s i g n i f i c a n t i n the n a t i o n a l p i c t u r e . Much b e t t e r l o c a t e d i s the long Angara-Lena downwarp, squeezed between the C e n t r a l S i b e r i a n M a s s i f and the B a y k a l Mountains. The b a s i n i s somewhat shallow, but a very good o i l w e l l was blown here r e c e n t l y from the Cambrian. I t proves t h a t t h i s f o r m a t i o n -- together w i t h other Lower P a l e o z o i c beds — cannot be r u l e d out as petroleum p o s s i b i l -27 i t i e s , a l t h o u g h i t produces very l i t t l e elsewhere. Very l i t t l e gas has been d i s c o v e r e d y e t , but such f i n d s c o u l d be h i g h l y s i g n i f i c a n t to the r a p i d l y growing i n d u s t r i a l b e l t between the Kuzbass and Lake B a y k a l . Very r e c e n t l y , a p p r e c i a b l e r e s e r v e s of n a t u r a l gas have been d i s c o v e r e d on the n o r t h e r n p a r t of S a k h a l i n , estimated to be i n the neighbourhood of 50 b i l l i o n c u b i c meters. The g e o l o g i c a l formations h o l d promise f o r an 26 O i l and Gas Journals June 8, 1964, p. 112. 27 ]?. J . Pohs: op. c i t . , p. 1975 and Map on pp. 1978-79; A t l a s SSSRi p. 73. 62. a d d i t i o n a l 50 b i l l i o n . T h e i r r e l a t i v e p r o x i m i t y t o Komsomol'sk and Khabarovsk, "which l a c k cheap s o u r c e s o f energy, w i l l r e n d e r 27a them h i g h l y i m p o r t a n t a l r e a d y i n the c u r r e n t decade. A t p r e s e n t r a t e of p r o d u c t i o n , t o t a l i n d u s t r i a l r e s e r v e s (A + B) a r e s u f f i c i e n t t o l a s t f o r n e a r l y a q u a r t e r o f a cen-t u r y . A t w e n t y - y e a r s u p p l y i s c o n s i d e r e d the u s u a l s a f e t y l i m i t , b o t h i n t h e S o v i e t U n i o n and the U n i t e d S t a t e s . One f i n d s , however, g r e a t d i f f e r e n c e s among the i n d i v i d u a l r e g i o n s . W h i l e t h e enormous Uzbek d e p o s i t s can l a s t over a c e n t u r y a t the p r e s e n t r a t e o f p r o d u c t i o n and over 80 y e a r s even a t the p l a n n e d 1965 l e v e l , t he r e s e r v e s o f the N o r t h Caucasus a r e s u f f i c i e n t f o r l e s s t h a n two decades and thos e o f the U k r a i n e f o r l e s s t h a n a dozen y e a r s . The d e p o s i t s o f the V o l g a and of A z e r b a i d z h a n a r e t a x e d the most: t h e i r l i f e e x p e ctancy i 3 28 o n l y 10 y e a r s and 8 y e a r s r e s p e c t i v e l y . The l a r g e e x t e n t o f p r o m i s i n g p e t r o l i f e r o u s a r e a s , t h e r e f o r e , g a i n s g r e a t i m p o r t a n c e , and the p r e s e n t d i s t r i -b u t i o n o f r e s e r v e s may change s i g n i f i c a n t l y i n the near f u t u r e . S o v i e t g e o l o g i s t s put the maximum e x t e n t o f h o p e f u l sedimen-t a r y b a s i n s , i n c l u d i n g o f f s h o r e a r e a s , as ne a r 12 m i l l i o n square k i l o m e t e r s ( f o u r and a h a l f m i l l i o n square m i l e s ) - a t e r r i t o r y t w i c e t h e s i z e o f s i m i l a r a r e a s i n the U n i t e d S t a t e s , A l a s k a i n c l u d e d . The more p r o m i s i n g a r e a , however, i s perhaps 27a Y u . I . Bokserman: op. c i t . , p. 39; R o b e r t E. K i n g : op. c i t . , p. 1342. 28 Y u . I . Bokserman: op. c i t . , p. 28, 29 ( T a b l e s 18 and 1 9 ) ; Theodore Shabad: News N o t e s , S o v i e t Geography, Review  and T r a n s l a t i o n s , Eeb. 1964, p. 59. 63. c l o s e r to three m i l l i o n square m i l e s . The g r e a t v a r i e t y and number of s t r a t i g r a p h i c and s t r u c t u r a l anomalies bode w e l l f o r f u t u r e d i s c o v e r i e s and there i s every reason f o r the op-29 timism of S o v i e t g e o l o g i s t s . The p r e s e n t p a t t e r n , however, i s l i k e l y to change. As shown e a r l i e r , over h a l f of a l l r e s e r v e s today are l o c a t e d i n the North Caucasus and the Ukraine, a l t h o u g h the combined ex-t e n t of p e t r o l i f e r o u s t e r r i t o r y i n these two r e g i o n s form but 4 per cent of the enormous t r a c t of sedimentary areas c o n s i d -ered p r o m i s i n g f o r gas f i n d s . In a d d i t i o n , these r e g i o n s produce some t h r e e - q u a r t e r s of a l l f r e e gases e x t r a c t e d i n the 30 USSR, which p l a c e s a g r e a t s t r a i n on t h e i r d e p o s i t s . I t i s obvious t h a t i f output i s t o i n c r e a s e as planned -- to over 300 b i l l i o n c u b i c meters by 1970 and c i r c a 700 b i l l i o n by i t 1980 — many new f i e l d s w i l l have to be opened i n h i t h e r t o l i t t l e p r o s p e c t e d a r e a s . L a t e l y a u t h o r i t a t i v e a r t i c l e s i n the S o v i e t & These f i g u r e s i n c l u d e o i l - w e l l gases u t i l i z e d i n the course of petroleum e x t r a c t i o n . However, a s s o c i a t e d gases today compose but 15 per cent of S o v i e t n a t u r a l gas p r o d u c t i o n and 25 per cent o f the t o t a l gas withdrawal ( t o t a l withdrawal f i g u r e s i n c l u d e gas f l a r e d , vented or r e c y c l e d ) . In the more mature gas i n d u s t r y of the U n i t e d S t a t e s , o i l - w e l l gases make up 30 per cent of the t o t a l withdrawal and much of i t i s r e -c y c l e d . I t seems reasonable to assume, t h e r e f o r e , t h a t the p r o p o r t i o n of a s s o c i a t e d gases i n the t o t a l u t i l i z e d output n a t u r a l gas i n the S o v i e t Union w i l l not be above t h i s f i g u r e . See: Yu. I . Bokserman: op. c i t . , p. 5, Table 1; I.M. Z l o t n i k o v : nK voprosu ob i s p o l * z o v a n i i neftyanogo gaza," G-azovoye Delo, No. 12, 1963, p. 3; S.H. Schurr et a l : op. c i t . , p. 414, Table 113. . 29 Yu. I . Bokserman: op. c i t . , p. 22 (Table 1 5 ) ; I r a H. Cram: op. c i t . , p. 1020-21. 30 Yu. I . Bokserman: op. c i t . , p. 22-24 (Table 1 5 ) , p.29 (Table 19) and p. 5 (Table 2 ) ; Theodore Shabad, op. c i t . , p.59. 64. p r e s s have been c r i t i c i s i n g the low l e v e l of e x p l o r a t i o n i n p r o m i s i n g r e g i o n s of Middle A s i a and West S i b e r i a ; more i n t e n -s i v e p r o s p e c t i n g work i n these p r o v i n c e s c o u l d , t h e r e f o r e , be expected i n the f u t u r e . The former r e g i o n i n p a r t i c u l a r i s c a l l e d upon to supply over 40 b i l l i o n c u b i c meters of gas to other p a r t s of the country by 1970 and over a hundred b i l l i o n , t e n y e a r s l a t e r — a p l a n t h a t r e q u i r e s a d r a s t i c i n c r e a s e of 31 r e s e r v e s . The successes a l r e a d y achieved on the West S i b e r i a n D e p r e s s i o n and the r e g i o n ' s p r o x i m i t y to the U r a l s should a c t as powerful i n c e n t i v e s f o r f u t u r e p r o s p e c t i n g i n t h i s a r e a a l s o . D i s c o v e r i e s i n other r e g i o n s are u n l i k e l y to a f f e c t a p p r e c i a b l y the geographic p a t t e r n of g a s - r e s e r v e s . As men-t i o n e d b e f o r e , some f i n d s are l i k e l y i n the southern p a r t of the Angara-Lena Downwarp, but c h i e f l y as a r e s u l t , of a search f o r o i l , s i n c e i n energy-saturated C e n t r a l S i b e r i a , the urgency f o r n a t u r a l gas i s not r e a l l y p r e s e n t . The other areas i n S i b e r i a are too remote from p o p u l a t i o n c o n c e n t r a t i o n and too h a r s h c l i m a t i c a l l y f o r i n t e n s i v e p r o s p e c t i n g . The much b e t t e r l o c a t e d C a s p i a n Lowland w i l l p l a y a s i g n i f i c a n t r o l e only a f t e r an important improvement i n d r i l l i n g technology and a r e d u c t i o n i n the p r e s e n t c o s t of deep d r i l l i n g . The p e t r o l i f e r o u s form-a t i o n s here l i e a t g r e a t depth. However, the much p u b l i c i z e d u l t r a - d e e p e x p l o r a t o r y w e l l near A r a s o r , begun i n 1961, appar-e n t l y c o u l d not reach the d e s i r e d depth of 7000 meters, which 32 bodes i l l f o r s u c c e s s f u l p r o s p e c t i n g i n t h i s a r e a . Yu. I . Bokserman: op. c i t , , p. 307. 32 Robert B. K i n g : op. c i t . , p. 1341. 65. Although, the marked c o n c e n t r a t i o n o f gas r e s e r v e s i s l i k e l y to change as e x p l o r a t i o n spreads i n t o new ar e a s , the g e n e r a l w e s t e r l y o r i e n t a t i o n w i l l remain. One may c o n f i d e n t l y assume that f o r the next 20 y e a r s , perhaps even l o n g e r , a t l e a s t n i n e - t e n t h s of a l l S o v i e t gas w i l l be obtained i n an ar e a c o v e r i n g a t h i r d of the U.S.S.R. Very n e a r l y a s e c t o r of a g i a n t c i r c l e , t h i s a r e a i s bounded by the S o v i e t border from L'vov to the Pamir and by two s t r a i g h t l i n e s converging on Noril'sk. While the o l d e r b a s i n s i n the densely populated southwestern s e c t i o n w i l l continue to r e p r e s e n t an important share of the t o t a l , the West S i b e r i a n D e p r e s s i o n and C e n t r a l A s i a w i l l probably succeed to the dominant p o s i t i o n by 1975. T h i s expected change i n the geographic d i s t r i b u t i o n of n a t u r a l gas may be compared to th a t which overtook the o i l i n d u s t r y i n the 1950's. In c o n t r a s t to petroleum, however, which g r e a t l y improved i t s p o s i t i o n by the massive s h i f t from the Caucasus t o the Midd l e Volga, a s i m i l a r move to C e n t r a l A s i a and north-west S i b e r i a w i l l c r e a t e problems f o r the gas i n d u s t r y . As European R u s s i a and the U r a l s w i l l s u r e l y remain the c h i e f consumers of n a t u r a l gas, the l o n g - d i s t a n c e t r a n s -p o r t of t h i s f u e l on an ever l a r g e r s c a l e w i l l be necessa r y . 66 Chapter IV* TRANSPORT 67. In the modern i n d u s t r i a l age, when l a r g e q u a n t i t i e s of energy have to move over l o n g d i s t a n c e s , low c o s t , f l e x i b i l i t y and ease of t r a n s p o r t a t i o n a c q u i r e g r e a t importance and can d e c i s i v e l y s e t f o r a w h i l e the energy p a t t e r n of r e g i o n s or gas even whole c o u n t r i e s . Long distance/y t r a n s p o r t i s a t once a monument to the achievement of modern t e c h n o l o g y — e f f i c i e n t , r e l i a b l e and i n c r e a s i n g l y e c o n o m i c a l — and an example of t h a t s o v e r e i g n i n f l u e n c e that t r a n s p o r t can h o l d upon a f u e l which i s dependent on one unique mode of conveyance. While s o l i d and l i q u i d f u e l s are a b l e to take advantage of a v a r i e t y of t r a n s -p o r t media, n a t u r a l gas - l i k e e l e c t r i c i t y - i s to some extent handicapped by r i g i d i t y i n i t s mode of conveyance. As y e t i t s only commercially p r a c t i c e d mode of t r a n s p o r t a t i o n i s by p i p e l i n e . Shipment of f r o z e n gas by methane tankers - while t e c h n i c a l l y s o l v e d - seems to be p r o f i t a b l e i f very l a r g e q u a n t i t i e s can be d e l i v e r e d , but only where t r a n s p o r t by p i p e -l i n e must be r u l e d out. Thus, w h i l e energy-hungry c o n t i n e n t s may embark on l a r g e - s c a l e ocean shipment of f r o z e n gas, c a b o t a g e — marine shipment between p o r t s of the same c o u n t r y — 1 w i l l not be p r a c t i c e d i n the near f u t u r e . In the l a n d - l o c k e d S o v i e t Union such p r a c t i c e would be e s p e c i a l l y d i f f i c u l t . L a r g e - s c a l e n a t u r a l gas p r o d u c t i o n t h e r e f o r e , i s un-t h i n k a b l e without a developed p i p e l i n e system, and p i p e l i n e t r a n s p o r t possesses a number of unique c h a r a c t e r i s t i c s not -A. M. L eeston, op. c i t . , p. 256. 68. shared by any other t r a n s p o r t media. I t does not i n v o l v e r e t u r n f r e i g h t and t h e r e are no i n t e r m i s s i o n s i n d e l i v e r y . T h i s con-t i n u o u s , one way movement f a c i l i t a t e s automation and l e a d s to g r e a t economies of l a b o u r , but i t a l s o demands u n i n t e r r u p t e d a b s o r p t i o n a t the end of the l i n e . P i p e l i n e companies or t r u s t s must r e s o r t to a number of techniques to c o u n t e r a c t the seasonal and d i u r n a l f l u c t u a t i o n s i n consumption. I n t e r r u p t i b l e s a l e s are made d u r i n g p e r i o d s of weak demand to power s t a t i o n s and, o c c a s i o n a l l y , to c e r t a i n i n d u s t r i e s , which r e p l a c e gas w i t h other f u e l s d u r i n g peak seasons, f r e e i n g gas f o r more l u c r a t i v e uses. Manufactured gases and-- i n the f u t u r e — f r o z e n methane may be u t i l i z e d f o r s h o r t - t i m e peaking, and to an ever i n c r e a s i n g extent underground storage i s employed to r e c t i f y the severe d i s c r e p a n c y between h i g h w i n t e r and low summer con-sumption. The t r a n s p o r t of n a t u r a l gas r e q u i r e s massive c a p i t a l o u t l a y . S i n c e l a r g e - c a p a c i t y t r u n k l i n e s must have l a r g e d i a -meters, minimum w a l l t h i c k n e s s and h i g h t e n c i l s t r e n g t h , the p i p e s must be produced of s p e c i a l s t e e l . As the moving gas l o s e s p r e s s u r e , the drop must be made good by p e r i o d i c com-p r e s s i o n . Modern, e f f i c i e n t t r u n k l i n e s have compressor s t a t i o n s on every 60 to 100 m i l e s and i n the S o v i e t Union they con-s t i t u t e about h a l f the t o t a l c a p i t a l c o s t s of the t r a n s m i s s i o n 2 network. 2 M. Sidorenko and K. I . Tenkin: "Energoprivod kompress-ornykh s t a n t s i i , " Gazovaya Promyshlennost', No. 7, 1963, p. 43. 69. N a t u r a l gas i s expensive to t r a n s p o r t . General com-p a r i s o n s of t r a n s p o r t c o s t s f o r energy i n d i f f e r e n t forms, however, can be q u i t e m i s l e a d i n g due to a number of v a r i a b l e s t h a t depend on l o c a l circumstances. Transport of energy i n v a r i o u s forms, among many other t h i n g s , i n v o l v e s d i f f e r e n t pro-p o r t i o n s of f i x e d and v a r i a b l e c o s t s , h a n d l i n g and storage charges, e t c . , a l l of which vary d i f f e r e n t l y from p l a c e to p l a c e . I t i s not s u r p r i s i n g , t h e r e f o r e , t h a t J . D a v i s i n Canada and V. K. S a v e l e v i n the U.S.S.R. have a r r i v e d a t d i f f e r e n t c o n c l u s i o n s about the r e l a t i o n s h i p of v a r i o u s forms of energy t r a n s p o r t . A c c o r d i n g to D a v i s , n a t u r a l gas (converted to c o a l e q u i v a l e n t . ) i s about h a l f as expensive to t r a n s p o r t by a 34 3 i n c h diameter p i p e l i n e as bituminous c o a l by r a i l . S a v e lev c l a i m s t h a t hard c o a l — t r a n s p o r t e d by e l e c t r i f i e d r a i l w a y - -i s cheaper, a l t h o u g h brown c o a l and l i g n i t e are more expensive. S a v e l e v 1 s f i g u r e s are g i v e n below, to g e t h e r w i t h Robert Campbell's c o r r e c t i o n s ( t h i r d column) f o r o p e r a t i n g c o s t s . (Since Savelev does not i n c l u d e any c a p i t a l charge, which i s extremely important i n the case of t r a n s p o r t by p i p e l i n e , P r o f e s s o r Campbell c o r r e c t s the o p e r a t i n g c o s t s w i t h an a r b i -t r a r y i n t e r e s t r a t e of 10%). 3 J . D a v i s : Canadian Energy P r o s p e c t s , 1957, p. 366. Quoted from H. V. Warren: "Some P e r t i n e n t F a c t o r s i n Energy S t u d i e s , " Canadian Geographer, 1961, p. 17. 70. Table Y I I Cost of T r a n s p o r t i n g V a r i o u s F u e l s over a D i s t a n c e of 1000 km. (per ton of nominal f u e l ) C a p i t a l Costs Operating Costs Operating ( r u b l e s ) without i n t e r - C o s t s , w i t h es t ( r u b l e s ) i n t e r e s t at 10% (kopeks per ton/km) Crude o i l by p i p e l i n e 720 mm 630 mm 35 35 46 4.0 4.0 5.4 .75 .75 1.0 C o a l by e l e c t r i f i e d r a i l roads of C l a s s I 7,000 C a l / t o n 5,000 C a l / t o n 3,000 C a l / t o n 81 113 189 13.3 18.6 31.0 2.1 3.0 5.0 N a t u r a l gas p i p e l i n e of 1020 mm diameter 136 16.2 3.0 E l e c t r i c power t r a n s m i s s i o n DC a t 600 KV 200 13.7 3.4 Sources i Robert IT. Campbell: The Economics of S o v i e t  O i l and Gas, Unpublished p r e l i m i n a r y d r a f t , p. X I - 24. The author quotes V. K. Savelev: S r a v n i t e l * n a y a Ekonomicheskaya  E f f e k t i v n o s t 1 T r a n s p o r t a T o p l i v a i Peredachi E l e k t r o e n e r g i i , Moskva, 1961, p. 221. as the i n d u s t r y i t s e l f . A lthough there were s m a l l l o c a l net-works f o r c o a l - d e r i v e d town gas even b e f o r e the R e v o l u t i o n , the f i r s t two l i n e s of any importance which c a r r i e d n a t u r a l gas were b u i l t only i n the 1940"s. They r a n from Buguruslan to Kuybyshev and S a r a t o v to Moscow. Completed i n 1946, the l a t t e r had a diameter of 300 mm (12 i n c h e s ) . C o n s t r u c t i o n proceeded The S o v i e t p i p e l i n e network f o r n a t u r a l gas i s as new 71. very s l o w l y a t f i r s t . Ten y e a r s l a t e r the l e n g t h of p i p e l i n e s 4 f o r n a t u r a l gas s t i l l t o t a l e d hut 5000 km. S i n c e that time, however, growth has "been more r a p i d . The l e n g t h of t r a n s m i s s i o n l i n e s has reached 28.5 thousand km i n 1963 (over 26000 km of them c a r r i e d n a t u r a l g a s ) , and f u r t h e r 8 to 9 thousand i s sched-5 u l e d f o r completion by the end of 1965. The g r e a t e s t d i f f e r e n c e between the S o v i e t and U.S. net-work i s the r a d i c a l l y d i f f e r e n t r e l a t i o n s h i p between the l e n g t h of t r a n s m i s s i o n and d i s t r i b u t i n g l i n e s . In 1962, the S o v i e t network had 25,300 km of t r a n s m i s s i o n l i n e s a g a i n s t 17,600 km of d i s t r i b u t i o n l i n e s * a r a t i o of n e a r l y 3 to 2, w h i l e i n the U.S. the l e n g t h of t r a n s m i s s i o n l i n e s reached 200,200 m i l e s , but t h a t of d i s t r i b u t i n g l i n e s 427,600 m i l e s , a r a t i o of l e s s 6 than one to two. Comparing the t r a n s m i s s i o n network of the two c o u n t r i e s , one f i n d s a s i g n i f i c a n t d i f f e r e n c e i n the share of l a r g e d i a -meter p i p e l i n e s . At the beginning of 1963, n e a r l y h a l f (48^) of a l l S o v i e t t r u n k l i n e s had diameters of 28 to 42 i n c h e s , w h i l e i n the U n i t e d S t a t e s only a f i f t h (27^) of them had d i a -meters of 25 to 30 i n c h e s . The l e n g t h of S o v i e t network i n the 4 Yu. I . Boksejeman: op. c i t . , p. 68 and 92-97; K. V. Dolgopolov et a l : op. c i t . . p. 110 5 Yu. I . Bokserman: op. c i t . , p. 68; Petroleum Press  S e r v i c e , Feb. 1962, p. 59 (1965 p l a n c a l c u l a t e d ) . 6 ET. I . Hovikov: op. c i t . , Gazovoye Delo, Fo. 5, 1963, p. 5; U.S. M i n e r a l Yearbook, 1962, p. 332. 72. 28 to 42 i n c h category was g r e a t e r than the l e n g t h of U.S. n e t -work i n the 30 i n c h and over category. We must remember, how-ever, t h a t of p i p e l i n e s between 25 and 30 i n c h diameters alone, the U n i t e d S t a t e s had over 82 thousand km, more than three times 7 as long as the e n t i r e S o v i e t netv^ork. The S o v i e t n a t u r a l gas i n d u s t r y i s perhaps even more dependent on l o n g d i s t a n c e t r a n s p o r t than t h a t of the U n i t e d S t a t e s , and t h i s dependency i s d e s t i n e d to i n c r e a s e once the C e n t r a l A s i a n and West S i b e r i a n f i e l d s r e a c h t h e i r f u l l pro-d u c t i o n c a p a c i t i e s . I t i s worth n o t i c i n g t h a t i n the U n i t e d S t a t e s the abundance of n a t u r a l gas (and of o i l ) i n the South-west s u c c e s s f u l l y a t t r a c t e d i n d u s t r y . Texas, Oklahoma, Arkansas and L o u i s i a n a account f o r almost h a l f of the n a t i o n ' s i n d u s t r i a l 8 consumption of n a t u r a l gas. Such s h i f t of i n d u s t r y to the gas (and o i l ) producing areas i s proceeding very s l o w l y i n the USSR. Probably l e s s than a f i f t h of the output of the North Caucasus i s consumed i n the r e g i o n and l o c a l use i n the Western Ukraine i s n e g l i g i b l e . S i m i l a r l y , some t h r e e - q u a r t e r s of the Uzbek p r o d u c t i o n i s d e s t i n e d to go to the U r a l s , and C e n t r a l A s i a 9 cannot hope to r e c e i v e much more than a q u a r t e r . Under such circumstances, the proximate l o c a t i o n of the N o r t h Caucasian 7 Yu. I . Bokserman: op. c i t . , p. 70 and U.S. F e d e r a l Power Commission, S t a t i s t i c s of N a t u r a l Gas Companies, 1962, p. x i x . 8 A. M. L e e s t o n : op. c i t . . p. 105. 9 A. K. Kortunov: "Gazovaya Promyshlennost* na rubezhe 1963," Gazovaya Promyshlennost*. No. 1, 1963, p. 2; N. P. Mun'ko: Gazovaya Promyshlennost 1 U z b e k i s t a n a , G o s i z d a t USSR. Tashkent, 1963, p. 33. 73. and S h e b e l i n k a d e p o s i t s to the h i g h l y i n d u s t r i a l i z e d and densely populated Donets-Dnieper a r e a i s very p r o p i t i o u s indeed. U t i l -i z a t i o n of gases i n the Volga r e g i o n i s a l s o proceeding very s l o w l y . The w a s t e f u l f l a r i n g of o i l - w e l l gases i n t h a t area can he e x p l a i n e d by the f a c t t h a t these wet-gases, c o n t a i n i n g a h i g h p r o p o r t i o n of h e a v i e r hydrocarbons, cannot be t r a n s p o r t e d without p r e v i o u s treatment. T h e i r f l a r i n g i s proof of the l a c k of s u f f i c i e n t i n d u s t r i a l c a p a c i t y on the V o l g a . T h i s s i t u a t i o n i s u n l i k e l y to improve g r e a t l y i n the near f u t u r e except, perhaps, i n the Volga a r e a . The l o n g d i s t a n c e p i p e l i n e s , must, t h e r e f o r e , be co n s i d e r e d the l i f e b l o o d of the i n d u s t r y perhaps even more than i n the U n i t e d S t a t e s . Map 5 shows the p r i n c i p a l t r u n k l i n e s , e x i s t i n g , p r o j e c t e d , and under c o n s t r u c t i o n , and i n d i c a t e s t h e i r diameters. T h e i r con-vergence on Moscow from a l l d i r e c t i o n s i s noteworthy, and the thr e e p a r a l l e l l i n e s between Moscow and the North Caucasus c l e a r l y show which r e g i o n i s the c h i e f s u p p l i e r of the S o v i e t c a p i t a l . A 32-inch p i p e l i n e n e c k l a c e now surrounds the c i t y j o i n i n g the converging supply l i n e s . Three long t e n t a c l e s extend to the B a l t i c ; two from the Western Ukraine ( i t s e a s t e r n branch to Leningrad not y e t completed), and one from the North Caucasus which branches o f f to the above c i t y from Serpukhov, north-west of Moscow. S h e b e l i n k a s u p p l i e s the e a s t e r n and southern p a r t s of the Ukraine, the S o v i e t c a p i t a l and — i n the f u t u r e — the B a l t i c as w e l l . The O r d z h o n i k i d z e - T b i l i s i p i p e l i n e , v a u l t i n g the Great Caucasus along the o l d Georgian m i l i t a r y highway, l i n k s the T r a n s c a u c a s i a n network to t h a t of MAJOR GAS PIPELINES of the USSR I TALIN_ ' ' VvfTU RIGA NORILSK Diameter of pipelines: 40 inches 28 Inches 20 inches or less existing under construction proposed major producing fields minor producing fields speculative field 75. the r e s t of the country. The p r i d e of the USSR, however, i s the g i a n t 4 2-inch Bukhara-Ural t r u n k l i n e , which i s c u r r e n t l y "being doubled. Along i t s n e a r l y 2000 km course, i t bores through sandy d e s e r t s , b a r r e n limestone p l a t e a u s and the maze of i r r i g a t i o n d i t c h e s of the Amu Darya d e l t a . I f the l a r g e -s c a l e d i s c o v e r i e s hoped f o r i n C e n t r a l A s i a m a t e r i a l i z e , a super gas-main from t h i s a r e a to the Moscow r e g i o n may a l s o 10 come i n t o b e i n g w i t h i n the next decade. As y e t almost the e n t i r e p i p e l i n e network i s c o n f i n e d to European R u s s i a . Middle A s i a has but a s i n g l e l i n e — from Bukhara t o T a s h k e n t — and a modest b u i l d i n g program p l a n s to extend i t to the n o r t h e r n f o o t h i l l s of the Tien-Shan, to the Fergana V a l l e y and to Karaganda w i t h i n the present decade. I n s i d e two y e a r s , the U r a l s are to be s u p p l i e d from three d i r e c t i o n s : from Bukhara, from the Lower Ob and from the V o l g a . A t S v e r d l o v s k , the g i a n t Bukhara-Ural t r u n k l i n e w i l l meet another 40-inch p i p e l i n e now advancing from the Lower Ob. A much s m a l l e r one a l r e a d y s u p p l i e s Magnitogorsk from B a s h k i r i a , and another one from the Volg a (Orenburg O b l a s t ) w i l l j o i n the twin g i a n t s from U z b e k i s t a n . A p a r t from the slowly advancing Berezovo-Serov-Sverdlovsk l i n e , p r o p e r l y b e l o n g i n g to the U r a l network, S i b e r i a cannot y e t boast a s i n g l e gas p i p e l i n e . A few are planned, however, and on two of.them p r e l i m i n a r y work has a l r e a d y begun. The — "V gazprome SSSR," Gazovaya Promyshlennost", No. 3, 1964, p. 44; I z v e s t i y a , March 29, 1964, p. 5, and March 1 5 , 1 9 6 5 , p. 4 . 7 6 . f i r s t o f these w i l l connect the Taas-Tumus and Bestyak d e p o s i t s w i t h the c a p i t a l of Y a k u t i a and should a l l e v i a t e somewhat the h a r d s h i p of e x i s t e n c e i n the backward, h o p e l e s s l y i s o l a t e d r e g i o n near the c o l d pole of the e a r t h . The second w i l l j o i n N o r t h e r n S a k h a l i n w i t h the Par E a s t e r n i n d u s t r i a l c e n t e r of Komsomolsk and w i l l run p a r a l l e l to the e x i s t i n g o i l l i n e a c r o s s the T a r t a r S t r a i t . The other two p i p e l i n e s are more d i s t a n t p r o j e c t s . One would d e l i v e r gas from the l a r g e f i e l d a t the Taz estuary to N o r i l s k and thus put an end to the f u e l prob-lems of t h i s amazing A r c t i c c i t y . The l o n g e s t and most impor-t a n t l i n e , however, would run from Okhteure, i n the middle of 11 the West S i b e r i a n w i l d e r n e s s , to the Kuznetsk B a s i n . I t must be n o t i c e d t h a t of these f o u r p i p e l i n e s only the l a s t one w i l l be of n a t i o n a l importance. I f b u i l t , i t would g r e a t l y reduce the c o s t of p i g i r o n and s t e e l i n the t h i r d m e t a l l u r g i c a l center of the country and a i d i n the c r e a t i o n of a s i z a b l e chemical i n d u s t r y . The other l i n e s w i l l be merely of l o c a l s i g n i f i c a n c e , h a r d l y a f f e c t i n g the economy o u t s i d e t h e i r immediate a r e a s . The s u p p l y i n g of other c i t i e s of Southern S i b e r i a from the Y a k u t i a n and present West S i b e r i a n d e p o s i t s does not appear l i k e l y i n s p i t e of c e r t a i n p r o p o s a l s . However, i n ease of s u c c e s s f u l s t r i k e s nearer the southern b e l t of p o p u l a t i o n c o n c e n t r a t i o n , the c o n s t r u c t i o n of gas-mains to supply the S i b e r i a n c i t i e s w i l l be h i g h l y probable. I f the hopes i n h i g h l y promising C e n t r a l A s i a and n o r t h -__ Eor sources about the S o v i e t p i p e l i n e network, see page 247. (Sources f o r Map 5) ^ P r e l i m i n a r y c o n s t r u c t i o n work i s r e p o r t e d on t h i s p i p e l i n e . 77 T a b l e V I I I T r a n s p o r t C o s t s o f N a t u r a l Gas over P u l l L e n g t h o f C e r t a i n M a j o r P i p e l i n e s ( i n r u b l e s p e r 1G00 c u . m.) P i p e l i n e D i a m e t e r L e n g t h 1959 i 9 6 0 1961 . (km} S t a v r o p o l * - Moscow 720 800 mm mm 1296.0 3.35 3.01 2.08 S a r a t o v-Mo sc ow 300 mm 840.0 5.22 5.35 5.56 Dashava-Minsk 700 mm 656.0 — — 2.63 S e r p u k h o v - L e n i n g r a d 700 mm 803.0 — 3.63 2.30 S h e b e l i n k a - B e l g o r o d -B r y a n s k 700 300 mmft mm 541.0 0.42 0.92 0.99 S h e b e l i n k a - D n i e p r o p e t r o v s k 700 mm 195.0 0.31 0.42 0.45 D a s h a v a - K i e v - B r y a n s k 700 mm && 900.0 2.66 2.57 2.06 S t a v r o p o l * - G o r k i y 800 mm 601.0 — — 1.92 S t a v r o p o l ' - Groznyy 700 mm 446.0 — mm mm 1.47 R o s t o v - T a g a n r o g - S l a v y a n s k — — 0.71 K a r a d a g - A k s t a f a - T b i l i s i -Y e r e v a n 700 mmfc 611.0 -- 3.55 3.06 Dzharkak-Bukhara-Tashkent 720 mm 756.0 — — 3.76 Average f o r USSR 2.23 2.21 2.07 & One b r a n c h v a r y i n g d i a m e t e r a l o n g i t s l e n g t h Aafc A p p r o x i m a t e l y S o u r c e : N . I . N o v i k o v : op. c i t . , Gazovoye D e l o , No. 5, 1963, p. 9; N.K. Nam: tt0b i s p o l * z o v a n i i propusknoy s p o s o b n o s t i m a g i s t r a l * n y k h gazoprovodov, r t Gazovoye D e l o , No. 5, 1963, p.40-42; O.C. Khaninov: " G a z i f i k a t s i y a promyshlennykh p r e d p r i y a t i y i gorodov Uzbekskoy SSR," Gazovoye D e l o , No. 1, 1963, p. 42. 78. west S i b e r i a m a t e r i a l i z e , however, the most important flow of n a t u r a l gas i n the f u t u r e w i l l be westward and northward, to S o v i e t Europe and the U r a l s . The r e l a t i v e l y w e l l prospected and a r e a l l y s m a l l European gas regions cannot f o r long s a t i s f y the r a p i d l y growing demand. As w i t h c o a l and e l e c t r i c i t y , the e a s t e r n t e r r i t o r i e s w i l l have to step i n t o the breach. The v a r i o u s S o v i e t t r u n k l i n e s operate on very d i f f e r e n t l e v e l s of e f f i c i e n c y and vary g r e a t l y i n t h e i r diameters and l e n g t h s . T ransport c o s t s over them from f i e l d to market, t h e r e f o r e , appear h i g h l y d i s s i m i l a r as Table V I I I p l a i n l y shows. I t i s more than twice as expensive, f o r i n s t a n c e , to s h i p gas to Moscow from S a r a t o v than from S t a v r o p o l 1 , a l t h o u g h the l a t t e r c i t y i s twice as f a r away. The c h i e f reason f o r such anomalies l i e s i n the advantage of u s i n g l a r g e - d i a m e t e r p i p e l i n e s (Appendix, Table XV), and here the strenuous e f f o r t s to i n c r e a s e the l e n g t h of such l i n e s have c l e a r l y p a i d o f f . Many of the S o v i e t p i p e l i n e s , however, are s t i l l r a t h e r i n e f f i c i e n t l y operated. The 28.5 thousand km l o n g S o v i e t net-work had only 42 compressor s t a t i o n s w i t h an aggregate c a p a c i t y 12 of l e s s than 1.3 m i l l i o n horsepower i n January 1963. D i s -tances between s t a t i o n s , t h e r e f o r e , are sometimes too l a r g e , and the p i p e l i n e s operate w i t h r e l a t i v e l y low p r e s s u r e s and h i g h 13 r e s i s t a n c e c o e f f i c i e n t s which impair t h e i r c a r r y i n g c a p a c i t i e s . 12 Yu. I . Bokserman: op. c i t . , p. 144. 13 A. L. Kozlov et a l : ttEkonomicheskiy a n a l i z r a z r a b o t k i S e v e r o - S t a v r o p o l * s k i y gazovogo mestorozhdeniya, 0 Gazovaya  Promyshlennost'. Ho. 11, 1963, p. 8; H.K. Ham: op. c i t . , Gazovoye De l o , Ho. 5, 1963, p j 40 and 45. 79. Due to the low l e v e l of automation, l a b o u r p r o d u c t i v i t y over the S o v i e t l i n e s i s extremely poor. In s p i t e of gra d u a l im-provement, the number of persons o p e r a t i n g the major p i p e l i n e s seems t o exceed 50 per 100 km even today. By comparison, the e n t i r e TransGanada i s run by 102 workers, t h a t i s 2.8 per 100 14 km. T h i s d i f f e r e n c e i s i n f a c t so l a r g e t h a t there may be an a d d i t i o n a l f a c t o r present, making the data non-comparable. The S o v i e t petroleum i n d u s t r y , f o r i n s t a n c e , i s very much over-15 s t a f f e d p a r t l y i n order to t r a i n p e r s o n n e l . A s i m i l a r s i t u -a t i o n may e x i s t h e r e . The c o s t s t r u c t u r e of t r a n s p o r t a t i o n of n a t u r a l gas i n the USSR does not d i f f e r markedly from that i n the U n i t e d S t a t e s . As i n the l a t t e r country, the a m o r t i z a t i o n of f a c i l -i t i e s c o n s t i t u t e s the l a r g e s t share and may reach 70 per cent. The incomplete mechanization i n the S o v i e t Union, however, produces one s i g n i f i c a n t d i f f e r e n c e : a very h i g h share f o r labour expenditure (wages and s a l a r i e s ) — a c o s t item which 16 i s s m a l l i n North America. (See Appendix, Table V.) Si n c e every p i p e l i n e r e p r e s e n t s a f i x e d , i n v a r i a b l e c a r r y i n g c a p a c i t y on which c a p i t a l charges l i e heavy, p e r i o d i c 14 Mezhuzhovskaya Nauchnaya K o n f e r e n t i y a po Voprosam Gazovoy Promyshlennosti, R a z v i t i y a Gazovoy Promyshlennosti  SSSR, Moskva, 1960, p. 402; V.S. C h e r n o v o l : " P u t i s n i z h e n i y a s e b e s t o i m o s t i t r a n s p o r t a gaza v Kievskom u p r a z h n e n i i magis-t r a l ' n y k h gazoprovodov." Gazovaya Promyshlennost 1. No. 12, 1963, p. 42. 15 Robert E. E b e l : The Petroleum Industry of the S o v i e t  Union. American Petroleum I n s t i t u t e , 1961, p. 28-30, esp. p.29. 16 V.S. Chernovol; op. c i t . , Gazovoya Promyshlennost' No. 12, 1963, p. 42. 80. drops in demand mean underutilization and huge losses. Seasonal imbalances over the Soviet network are quite considerable des-pite the very high share of industrial consumption of natural gas which always fluctuates less than residential consumption. Table IX shows the variation between the volume of transported gas in January and June of 1961 and 1962 over eight major pipe-lines in the USSR. Between 1959 and 1963, the major lines delivered, in toto, 12 to 16 per cent more gas to consumers during the f i r s t and fourth quarters than during the warmer half of the year. In none of these years was the actual difference very far from a tenth of the total output of non-associated gases (e.g. 4 17 b i l l i o n cubic meters in 1963; 6.2 b i l l i o n in 1962). The problem of seasonality i s particularly acute in the big cities where the large and highly variable domestic market accentuates the fluctuation. Moscow, for instance, consumes 23 per cent and Leningrad 11 per cent more natural gas during the six winter months than during the summer half of the year. And much of that summer consumption represents interruptible sales to electric stations in these c i t i e s , which use gas from 18 March to September in order to reduce the imbalance in demand. At present, the USSR has very limited underground stor-age f a c i l i t i e s for natural gas, and construction i s proceeding _ N. I. Novikov: op. c i t . , Gazovoye Delo, No. 5, 1963, P. 4. 18 Yu. I. Boksermans op. c i t . , p. 277-78 81. Table IX Seasonal F l u c t u a t i o n over Major S o v i e t Gas P i p e l i n e s T r a n sport of C o e f f i c i e n t Transport C o e f f i c i e n t gas: m i l l i o n of f l u e - of gas: of f l u c -cu. meters t u a t i o n m i l l i o n t u a t i o n Jan.consump, cu.meters Jan. cons. Jan. June June " Jan. June June S t a v r o p o l ' -Moscow (double l i n e ) Krasnodar Kr ay-Serpukhov S h e b e l i n k a -B e l g o r o d -Bryansk Da shava-Ki e v-Bryansk S t a v r o p o l ' Groznyy Da shava-Minsk Krasnodar-T b i l i s i -Yerevan Saratov-Moscow 1 9 6 1 1009 781 446 341 526 435 211 182 79 66 55 48 1.29 1.31 1.21 1.16 134 62 2.16 91 84 1.08 1.20 1.15 1 9 6 2 1493 918 1.63 654 567 1.15 697 502 1.39 272 181 1.50 177 177 1.00 176 168 1.05 106 97 1.09 53 49 1.08 Sources N. I . Novikov: op. c i t . , Gazovoye Delo, No. 5, 1963, p. 4. 82. r a t h e r s l o w l y . Two l a r g e r e s e r v o i r s w i t h a combined c a p a c i t y of one b i l l i o n c u b i c meters were completed near Moscow du r i n g 1963 and more modest ones are being prepared near Leningrad and 19 Ryazan. Only p a r t of the volume s t o r e d up i n any r e s e r v o i r can be used, however, s i n c e o n e - t h i r d to one-half of a l l the gas must be permanently kept there to m a i n t a i n p r e s s u r e . Only the C e n t r a l Region and the Leningrad a r e a seem to have such r e s e r v o i r s i n o p e r a t i o n , though c o n s t r u c t i o n has begun on others 20 near K i e v , Tashkent and the U r a l s . T o t a l a c t i v e c a p a c i t y , t h e r e f o r e , appears to be between two and t h r e e b i l l i o n c u b i c 21 meters, or l e s s than a t h i r t i e t h of the annual p r o d u c t i o n of the USSSR. In the U n i t e d S t a t e s , a c t i v e c a p a c i t y exceeds 100 22 b i l l i o n c u b i c meters, or a q u a r t e r of y e a r l y p r o d u c t i o n . Because the number of o l d d e p l e t e d w e l l s i n the S o v i e t Union i s l i m i t e d , porous a q u i f e r o u s formations w i l l p l a y the l e a d i n g r o l e i n gas storage, but w i l l a l s o i n c r e a s e c o s t s . Con-s i d e r i n g t h a t the net c o s t of e x t r a c t i o n p l u s t r a n s p o r t ranges between two to s i x r u b l e s per 1000 c u b i c meters, the r e l a t i v e c o s t of s t o r a g e — i n e x i s t i n g as w e l l as p r o j e c t e d r e s e r v o i r s — i s f a i r l y h i g h , r u n n i n g — a c c o r d i n g to the most f a v o u r a b l e 23 e s t i m a t e s - - from one h a l f to two r u b l e s per 1000 c u b i c meters. 19 "Gazovaya Promyshlennost" k 46-iy godovschchine V e l i k o g o Oktyabrya. Gazovaya Promyshlennost," No. 11, 1963, p. 2. 20 Yu. I . Bokserman: op. c i t . , p. 285 21 Gazovaya Promyshlennost 1, No. 12, 1962, and No. 11, 1963, p. 2. 22 A. M. L e e s t o n : op. c i t . , p. 242-243. 23 V. S. Chernovol, op. c i t . , p. 40. 83. There i s a f a i r amount of discussion in Soviet sources about underground storage in the USSR and i t appears that the problems are many. Liquefied petroleum gases and other gas liquids in the Soviet Union are transported almost exclusively by r a i l , whereas in the United States truck and pipeline transport overtook the 24 entire industry in the last decade. In the USSR, pipeline transport of natural gas liquids is limited to a few very short lines, almost entirely in the Volga region, supplying petro-25 chemical w o r k 3 from gas-benzine factories. Their number is most certainly under a dozen. Truck transport i s restricted to the distribution of cylinders for households within a limited radius. Most LPG, as well as natural gasoline, moves by r a i l tank-car, sometimes over a great distance, the longest large-scale shipment being the supplying of Murmansk from Bashkiria 26 3300 km away. As with pipeline transport of dry gases, shipments of NGL's (natural gas liquids) today are confined almost entirely to European Russia and the Urals. Between 1963 and 1966, however, several populated points in the Virgin Land Kray hope to receive liquefied gas and natural gasoline. On a small scale, i t i s 24 Oi l and Gas Journal. March 16, 1964, p. 111. 25 See for instance: A. E. Zinovyev ejt als "Osnovnye napravleniya ispol*zovaniya prirodnykh I poputnykh gazov v khimicheskoy promyshlennosti," Gazovaya Promyshlennost*. No. 4, 1960, p. 32. 26 K.V. Dolgopolov et a l : op. c i t . , p. 126. 84. already being utilized in tractors and other agricultural mach-27 inery. A small amount of these gases i s also consumed in rural Middle Asia. The Virgin Lands are, and w i l l be, supplied mainly from the Middle Volga, Central Asia from the Cheleken peninsula. The great Bukhara deposits contain very dry gases, which do not lend themselves to liquefication. Their role in supplying these areas with natural gas liquids, therefore, w i l l be negligible. The geographic significance of long-distance gas trans-port may be compared to that of high voltage transmission of e l e c t r i c i t y . Although the former represents movement of energy in an original state, while the latter implies transformation, the similarities are unmistakable. In the USSR, the ultimate aim in both cases is the tapping of distant energy reserves for the energy-hungry c i t i e s of the Urals and European Russia. At present, 85 per cent of a l l natural gas is produced in the Ukraine, the North Caucasus and the Volga, in well-populated 28 regions, with long established or developing industry. Yet the bulk of the gas leaves these areas to be consumed in the Central Region, Leningrad and the Baltic, hundreds of miles away. As Chapter I showed, however, Central Asia and the West Siberian Depression w i l l almost certainly succeed to a dominant 27 D.A. Tsvetkov: "Ispol"zovaniye szhizhennykh gazov v narodnom khozyaistve SSSR," Gazovoye Delo, No. 11, 1963, p.43; 0. Yu. Kulinyak: "Ispol'zovaniye gaza v Kazakhstane," Gazovoye  Delo, No. 1, 1963, p. 46. 28 Calculated from: Theodore Shabad: "News Notes," Soviet  Geography, Feb. 1964, p. 57 and Y. I. Bokserman: op. c i t . , Table 19, p. 29. 85. position in reserves sometime during the 1970*s. At the same time, the very high rate of production w i l l considerably deplete the Ukrainian and Caucasian deposits: the two eastern regions, therefore, w i l l surely catch up and may even overtake, in output. As with el e c t r i c i t y , where both in potentials and soon in pro-duction, remote easterly regions hold sway, so i t w i l l be with If anything, however, large-scale shipments of gas to European Russia w i l l be an even more extreme case, reflected in the geographic pattern. The proposed high-voltage link be-tween Siberia and the Urals w i l l neither originate in, nor pass through,economically unresponsive territories. It w i l l begin in the fast-developing Kuznets-Angara region and follow the grain of Soviet economic activity through the true "Heartland" 29 of the USSR, to use David Hooson's phrase. Similarly, en route to major centers of people and industry, the pipelines of European Russia span established, populated areas, d i s t r i -buting fuel a l l along the way. It i s otherwise with pipelines tapping the infant, but apparently fabulous gas-regions of the East. In our lifetime, neither the swampy wilderness of north-west Siberia, nor the deserts and barren plateaus of Middle Asia w i l l be anything but economic vacuums. On their way to the major consuming centers of Soviet Europe, these trunklines w i l l have to pass 29 David J. M. Hooson: A Hew Soviet Heartland? Van Hostrand Co., Hew York, 1964. 86. through s i m i l a r country or at best through very sparsely peopled, unindustrialized areas of the V i r g i n Lands and Lower Volga Vall e y . These l i n e s , therefore, as the already e x i s t i n g Bukhara-Ural unquestionably i s , w i l l be but giant siphons., which w i l l pump energy out of otherwise useless wastelands to the i n d u s t r i a l hearts of the country. They w i l l not be meant to, or be able to, f i l l the economic hollows, decreed to be more or less permanent by nature. 87. PART. I I REGIONAL SECTION 88. F u e l consumption i n the U.S.S.R. i s h i g h l y c o n c e n t r a t e d . Three r e g i o n s , i n r o u g h l y e q u a l p r o p o r t i o n , a c c o u n t f o r h a l f o f a l l non-renewable energy consumption i n the c o u n t r y . These a r e : t h e C e n t e r ( i n c l u d i n g the G o r ' k i y complex and the C e n t r a l Chernozem a r e a ) , the U r a l s , and the D o n e t s - P r i d n i e p e r - R o s t o v r e g i o n . F i v e o t h e r r e g i o n s have sh a r e s g r e a t e r t h a n 5 p e r c e n t : -the N o r t h -West, the V o l g a , the r e s t o f the U k r a i n e ( w i t h M o l d a v i a ) , and 1 the two r e g i o n s i n S o u t h e r n S i b e r i a and N o r t h e r n K a z a k h s t a n . I t can be observed from Map 6 t h a t a l l but two of t h e s e r e g i o n s a r e found i n European R u s s i a and t h a t more than t h r e e - f o u r t h s o f a l l f u e l i s u t i l i z e d west of C h e l y a b i n s k , between the 60°N p a r a l l e l and the Caucasus ran g e . Y e t i t i s the supreme f a c t o f S o v i e t economic geography t h a t o n l y 'three r e g i o n s i n t h i s a r e a have a s u f f i c i e n t l o c a l power base, and i n two o f these - the V o l g a and t h e N o r t h Caucasus - by f a r t h e g r e a t e r p a r t o f t h e r i c h f u e l r e s o u r c e s have been d i s c o v e r e d o n l y r e c e n t l y . U n t i l a f t e r the Second W o r l d War -1 " S t a t i s t i c h e s k i y e M a t e r i a l y " : V e s t n i k S t a t i s t i k i , No.5, 1962, p. 91. Some e s t i m a t i n g was n e c e s s a r y s i n c e my r e g i o n s do n o t e x a c t l y c o r r e s p o n d t o the o f f i c i a l S o v i e t economic r e g i o n s . The R o s t o v O h l a s t was detached from th e N o r t h Caucasus and added t o the D o n e t s - P r i d n i e p e r r e g i o n , w h i l e the Northwest ( L e n i n g r a d R e g i o n ) i n t h i s s t u d y e x c l u d e s a l l l a n d s e a s t of V o l o g da and n o r t h of Lake Onega. S o u t h e r n K a z a k h s t a n was added to C e n t r a l A s i a and two r e g i o n s , not e x i s t i n g i n S o v i e t c l a s s i f i c a t i o n , were d e f i n e d i n the N o r t h K a z a k h s t a n -- S o u t h S i b e r i a n b e l t west of Lake B a y k a l . The p r o c e d u r e s of c a l c u l a t i n g , o r a d j u s t -i n g , f u e l consumption i n t h e s e r e g i o n s a r e e x p l a i n e d i n the a p p r o p r i a t e c h a p t e r s . 90. aside from the remote and frozen Pechora province - only the Eastern Ukraine could be considered affluent in energy in the whole of European Russia. At the end of the 1920's, the de-clining o i l wells of the North Caucasus s t i l l supplied a tenth of a l l fuel, but by 1940 this share has fallen to 2£ percent. 2 The Volga contributed a mere 1 percent even at the latter date. It has only been in the last decade that the latter region at-tained true prominence and the North Caucasus acquired a new v i t a l role in the national energy supply. Except in the Donets Basin, modern industry in Russia has grown up on distant supplies of coal and on such expensive low-quality fuels as ashy l i g n i t e , peat and shale. Coal import from Cardiff and Newcastle to St. Petersburg may be substituted by "imports" from the Donets and the Pechora during Soviet times, but the essential dependence of much of European Russia on far-away sources of power has remained. The Urals, too, industrial giant of Soviet power, was built up very largely on coal brought in from 1500 miles, and in absolute terms i t s energy import s t i l l increases every year. The present shift in the fuel mix does not change that imbalance in Soviet industrial geography; most of Soviet Europe ~2 These figures were calculated from D. Shimkin: The  Soviet Mineral-Fuel Industries. Table 5, p. 31 and Table VI, p. 85; 1940 figures were checked against Table XIV, p. 90. Figures for total fuel production were taken from: Narodnoye  Khozyaystvo 1958 g. p. 200 (for 1940) and J.P. Cole and F.C. German: A Geography of the U.S.S.R.,.Table 22a, p. I l l (for year 19207* 91. i s s t i l l a d e f i c i t a rea and the supply of energy to p a r a s i t i c r e g i o n s , o f t e n over long d i s t a n c e s , i s more than ever a necess-i t y . The use of mobile hydrocarbon f u e l s however, has c o n s i d e r -a b l y l i g h t e n e d t h a t tremendous burden on the economy, made poss-i b l e a g r e a t e r d i v e r s i f i c a t i o n i n power consumption, and f u r n i s h e d the chemical i n d u s t r y w i t h inexpensive raw m a t e r i a l s . In t h i s s e c t i o n , the r o l e played by n a t u r a l gas i n each r e g i o n i s examined i n d e t a i l . The c o n t r i b u t i o n of gas to the r e g i o n a l f u e l mix, the p a t t e r n of i t s consumption, and the bene-f i t s d e r i v e d from i t s u t i l i z a t i o n are analyzed i n the i n d i v i d u a l context of each t e r r i t o r i a l d i v i s i o n . The economic r e g i o n s are grouped i n t o three c a t e g o r i e s : consuming a r e a s , producing areas and r e g i o n s w i t h both charac-t e r i s t i c s . S t r i c t l y consuming r e g i o n s are the Center, the L e n i n g r a d Region, the B a l t i c and the U r a l s . They are t r a d i t i o n -a l l y poor i n energy and have to depend on "imported* f u e l s . P r o v i n c e s of consumption as w e l l as p r o d u c t i o n are the Greater Ukraine, the V o l g a and the Transcaucasus. While b e n e f i t i n g g r e a t l y from t h i s new source of energy, they a l l have r i c h , though more expensive, s u p p l i e s of other f u e l s and-- w i t h the e x c e p t i o n of the T r a n s c a u c a s u s — are a b l e to export a substan-t i a l p a r t of t h e i r n a t u r a l gas output to other a r e a s . E s s e n -t i a l l y producing r e g i o n s — " e x p o r t i n g " most of t h e i r output--are the North Caucasus and C e n t r a l A s i a (Uzbekistan and Turk-menia)» S i b e r i a , i n c l u d i n g Northern Kazakhstan, i s t r e a t e d i n a separate c h a p t e r . Here-- exce p t i n g the Lower Ob V a l l e y , t i e d completely to the U r a l i a n economy— the n a t u r a l gas i n d u s t r y i s • 7 92. e n t i r e l y undeveloped or i s i n an extremely rudimentary stage. I t s future significance can be assessed only t e n t a t i v e l y . 9 3 Chapter V CONSUMING REGIONS 94. THE CENTRAL REGION The Central Region occupies the middle of the East European Plain. Its strategic position, the presence of the capital and largest metropolis and the radiating railways have given the region a commanding position in Soviet Europe. Though i t s "boundaries are very uncertain and underwent frequent admini-strative changes, no other economic area in the U.S.S.R. has such a prominent core. In this analysis, the Center includes the Gorkiy Oblast, belonging o f f i c i a l l y to another division, and the Central Chernozem region, which is often made into a separ-ate economic unit. This is a large region, three times the size of Great Britain, and i t accounts for over 17 percent of the country's population, 16 percent of i t s fuel consumption and perhaps a 1 f i f t h of i t s industrial capacity. Within this region, however, one can witness a sharp concentration of economic activity. Three-fifths of the Center's population, most of i t s cities and almost a l l i t s manufacturing, i s found in a relatively small quadrangular area, less than a quarter of the total, with 1 Narodnoye Khozyaistvo SSSR, 1962, p. 20-21f S t a t i s t i -cheskiye Materialy," Vestnik S t a t i s t i k i , No. 5, 1962, p. 91. Por an estimate of industrial capacity, see figures for number of workers, for fixed capital and for various branches of i n -dustry in J. P. Cole and P. C. German: A Geography of the USSR, Table 21, p. 107 and Table 38, p. 238-9. See also R.E. Lonsdale and J. H. Thompson: A Map of the USSR's Manufacturing, Economic Geography, I960,.p. 36-52 and V. V. Pokshishevskiy: "Prospects of Population Migration in the USSR,"1 Transl. in Soviet Geog- raphy , Jan. 1963, p. 13-25. Map 7 95 THE ENERGY SUPPLY of the CENTRAL REG. JRW o Hydroelectric Stations Thermal Stations @ Coo / Produc t ion • Coal ft P e o f Product 1 on Gas • Peat 60 s Coal 8 60s Pipeline — OK Peat 8 60s L O . / 9 6 5 96. 2 Kalinin, Rybinsk, Gorkiy and Tula as i t s corners. And i t i s in this core area that probably 80 percent of a l l fuel consumed in 3 the Central Region i s u t i l i z e d . Outside this industrial core, only one single complex i s destined to use large quantities of fuel in the near future, Lipetsk, where a very large integrated iron and steel work is now nearing completion. Attention, therefore, w i l l be focused primarily on this inner industrial center described above. Excepting the Urals, the Center i s the oldest industrial region in Russia. In addition, i t contains the largest conur-bation in the country, the seat of the government and a dis-proportionately high share of s c i e n t i f i c and cultural i n s t i -tutions - a l l of which were important even during the time when St. Petersburg served as the capital of the Russian Empire. The development of manufacturing was based entirely on the advantages of location that had already given the region prominence in pol-i t i c a l development and trade. The Center has never been able to supply more than half of i t s energy needs even by the stren-uous and very costly exploitation of i t s local resources. Gen-erally, the share of "imported" fuels far exceeded that of the locally produced ones in the region* s energy mix and was espec-2 These figures were calculated or estimated on the basis of data supplied by Narodnoye Khozyaystvo RSPSR v 1962 g, p. 8 and p. 12 and Akademiya Nauk, Institut Geografii: Taentral'nyy  Rayon, Gosisdat, Moskva 1962. 3 Estimated on basis of data from "Statisticheskiye Materialy," Vestnik S t a t i s t i k i , No. 5, 1962, p. 91. 9 7 . 4 i a l l y dominant in the fuel supply of the Moscow industrial core. In every respect, therefore, the Central Region appears to be an area where the util i z a t i o n of clean and mobile hydro-carbon fuels could produce especially great benefits. Although natural gas has entered the Soviet fuel-mix only recently, i t is notable that i t s f i r s t contribution (aside from f i e l d uses of oil-well gases) was made in the Central Region. The f i r s t gas-pipeline built in the USSR (excepting a short one in the Middle Volga) was constructed from Saratov to Moscow (1949). The second, too, though i t reached Kiev f i r s t , was quickly pushed on to the capital (Dashava-Kiev-Moscow). Since that time, the above region has continued to receive the lion's share of pipe-line construction, u n t i l today i t is supplied through five 4 In 1908, for instance, three-quarters of a l l fuel con-sumed in the vicinity of Moscow was brought in from distant regions (Akademiya Nauk: Tsentral'nyy Rayon, p. 95). Even during the Eive Year Plans, despite feverish exploitation of Moscow lignite and peat, the increase in fuel output could not keep up with industrial growth (Tsentral'nyy Rayon, p. 166) and local fuels seem to have furnished only about a f i f t h of the energy consumed in the industrial core and perhaps double that share in the entire Center. (Since only some ^  percent of fuel produced in 1938 was exported and the amount in inven-tory in the thi r t i e s is not lik e l y to have been great, total production for the USSR as a whole can be roughly equated with total consumption. The share of the Center in total fuel con-sumption could not have been smaller during the thirties and early f i f t i e s than in 1960, and i t was probably larger. Most fuel produced in the Central Region must have been consumed locally, since Moscow coal and peat are not transportable. Assuming these, above figures have been calculated from: "Statistieheskiye Materialy," Vestnik S t a t i s t i k i , No. 5, 1962, p. 91 (share of various regions in total fuel consumption); D. Shimkin: op. c i t . , Table 5, p. 31 (share of various regions in total fuel production in 1928, 1940 and 1955) and Narodnoye  Khozyaystvo v 1962 g, p. 152 (total fuel production in 1940). 98. trunklines, with two more projected, linked by a large capacity pipeline ring just inside the boundary of Moscow Oblast. (See Map 5) Consumption has been increasing by leaps and bounds: i t was 4 b i l l i o n cubic meters in 1958, about 8.4 b i l l i o n in 1960, 5 and between 25 and 30 b i l l i o n in 1962-63. In 1962, the city of Moscow alone used as much natural gas as the whole Central 6 Region two years earlier (8.4 b i l l i o n cubic meters), and by the end of 1965, the capital i s to receive some 12-g- - 13 b i l l i o n 7 cubic meters, the equivalent of 15 million tons of hard coal. It can be seen, therefore, that the capital is much more heavily supplied than the Central Region as a whole. By 1961, natural gas accounted for half of Moscow's fuel balance, a fraction which i s to grow to nearly nine-tenths by the end of 8 the Seven Years Plan (1965). In the Region as a whole, however, 5 These figures were calculated from shares of total fuel consumption with the conversion factor: 1 ton of nominal fuel (7000 Cal) =1.21 thousand cu. m. of gas. Data taken JT.P. Cole and P.C. German: op. c i t . , p. 160 - (for year 1958); Narodnoye  Khozyaystvo v 1962 g, p. 152 and 545; Vestnik S t a t i s t i k i , No. 5, 1962, p. 87 and 91. (Total fuel consumption was obtained by taking total production and subtracting export. Inventory was ignored. Conversion factor for o i l : 1 ton of nominal fuel= 1.43 tons of o i l and o i l products). Pigure for 1962-63 taken from Gazovaya Promyshlennost", No. 5, 1963, p. 10 for import of gas to Central Region from the North Caucasus. Imports from other regions were estimated. 6 Yu. I. Bokserman: op. c i t . , p. 277, Table 106. 7 Referativhyy Zhurnal, No. 3E56, 1962 and No. 5E32, 1964. 8 Referativnyy Zhurnal, No. 3E56, 1962. 99. gas supplied only eight and a half percent of the total fuel requirement, and even in the industrial quadrangle i t s share 9 was probably below 15 percent. It i s to exceed a quarter by 10 1966. The chief supplier i s the Horth Caucasus: i t sent to the Center 20 b i l l i o n cubic meters in 1962 and was to raise this 11 amount to 30 b i l l i o n by this year. The Ukraine can spare only a fraction of that amount, since i t also supplies the Baltic and, besides, i t s own fuel needs are very great. Due to the small capacity of the Saratov-Moscow line, Saratov Oblast sup-12 plies only up to 600 million cubic meters per year. The 32-ineh diameter Saratov-Gorkiy trunkline i s of much greater capacity and would be able to furnish 6 b i l l i o n cubic meters per year to the latter city. At present, however, the resources of Saratov Oblast' cannot guarantee such massive deliveries, and 13 Gorkiy receives only about half that amount. The Center, in fact, could use much more gas than i t receives from a l l i t s suppliers but without new discoveries these reserves cannot be depleted much faster. 9 Calculated from "Statisticheskiye Materialy," Yestnik  S t a t i s t i k i . Ho. 5, 1962, p. 87 and 91. 10 Referativnyy Zhurnal, Ho. 3E56, 1962. 11 A. K. Kortunov: "Gazovaya promyshlennost* na rubezhe 1963 g.," Gazovaya Promyshlennost* Ho. 1, 1963, p. 2. 12 G. S. Urinson _et a l : "Razvitiye gazovoy promyshlennosti Saratovskoy oblasti," Gazovoye Delo, Ho. 4, 1963, p. 5. 13 Ibid., p. 5 and p. 7. 100. The Seven Year Plan (1958-65) envisaged a massive sub-stitution of gas for the high-cost Moscow lignite and peat. It i s clear, however, that this substitution i s being restricted very largely to the industrial quadrangle. Except by way of some electricity, transmitted from stations on the coal f i e l d , and through limited underground gasification, local lignite w i l l not contribute to the fuel economy of Moscow Oblast1. Even in power stations the extensive use of this coal i s a debatable 14 matter. In Tula Oblast', where more than nine-tenths of the production of Moscow lignite i s concentrated, and where coal supplied 87 percent of a l l fuel requirement in 1958, output is being greatly reduced, and the share of coal in the fuel mix of the Oblast' w i l l drop to 40 percent by the end of 1965. Similar reduction is being effected in Ryazan Oblast'. The difference in energy need i s being supplied by gas and o i l , the former being generally more important, and much more so near the capital. In contrast to the manufacturing core, coal (and peat) production is being expanded in the less industrialized oblasts (e. g. 15 Smolensk and Kaluga). 14 Z. Chukhanov: "Ob effektivnosti razvitiya podmosko-vnogo ugol*nogo basseyna," Voprosy Ekonomiki, No. 1, 1958, p. 39-48; and Akademiya Nauk: Geograficheskiye Problemy Raz- vit i y a Krupnykh Ekonomicheskikh Rayonov SSSR, Izdatel'stvo Mysl*, Moskva, 1964, p. 67. 15 Ibid., (Geograficheskiye Problemy), p. 68 and Tsentral'nw Rayon, p. 172. 101. It seems that in this area no large-scale substitution of gas for coal i s likely to take place in the near future. Neither are Yaroslavl' and Ivanovo Oblasts supplied adequately yet with natural gas, although the former is second only to Mos-cow Oblast 1 in industrial output, while the latter boast the 16 greatest concentration of textile manufacturing in the country. One large-diameter pipeline (32 inches) from the Volga reaches these d i s t r i c t s , but i t works only at half capacity, transmit-17 ting about 3 b i l l i o n cubic meters per year. Since i t also serves Gorkiy and Cherepovets, i t i s not l i k e l y to have much gas available for Ivanovo and Yaroslavl'. (These cities are crossed by an o i l pipeline, too, from the p r o l i f i c Al'met'evsk f i e l d , and o i l i s likely to make a greater contribution to their fuel economy than natural gas.) The distribution of natural gas among the sectors of economy in the Central Region differs somewhat from the national pattern, owing to very high consumption by power plants. In 1960, electric power stations took 34 percent, industrial enter-18 prises nearly 40 percent and domestic consumers 11 percent. By that year a l l power stations within the capital were changed to gas though some used coal and fuel o i l during the winter 16 Tsentral'nyy Rayon, p. 379 and 480-81. 17 G. S. Urinson e_t a l : "Rasvitiye gazovoy promyshlen-nosti Saratovskoy oblasti," Gazovoye Delo, No. 4, 1963, p. 5-7. 18 Referativnyy Zhurnal. No. 3E56, 1962. 102. 19 months. South of Moscow, electric stations u t i l i z e the local lignite to a considerable extent (e.g. Kashira and Stupino), 20 while others work on peat. Natural gas, however, can be pro-fitably u t i l i z e d even by these stations during the summer period. As in any large mid-latitude city, seasonal fluctuation of gas consumption in Moscow is very considerable, demand in January 21 being almost twice as great as in July. Other urban centers in the Region should exhibit a similar pattern. At the same time, underground storage capacity in the Soviet Union is very limited due to lack of exhausted natural reservoirs. Presently, storage capacity in the Center seems to be only about one b i l -l i on cubic meters, but active capacity-- the amount that can be 22 withdrawn-- is only about half that much. The Russians are, therefore, forced to dump large quantities of gas to power sta-tions during the warm season in spite of frequent criticism against the excessive use of natural gas as boiler fuel. In the new price system, effective since January 1964, such stations receive gas two rubles below the regional price level (per 1000 cubic meter) which indicates that the Russians have resigned 19 D. G. Zhimerin: Istoriya E l e k t r i f i k a t s i i SSSR. Izdat-el'stvo Sotsial'no-Ekonomicheskoy Literatury, Moskva, 1962, p. 401 and Yu. I. Bokserman: op. c i t . , p. 254. 20 Tsentral'nyy Rayon, p. 175. 21 Yu. I. Bokserman, op. c i t . , p. 277, Table 106. 22 Gazovaya Promyshlennost', No. 11, 1963, p. 2 and No. 12, 1962. 103. 23 themselves to the practice. Of a l l regions, such interruptihle sales appear most common in the Center. The position of domestic and municipal consumption in Moscow is very illuminating. The energy needs of this sector are almost exclusively supplied by gas, and yet this accounts for a mere 11 percent of total gas consumption in the Soviet capital-- hardly more than the national average. Por a city of six and a half million, which provides a greater degree of com-fort than any other in the USSR and i s , in addition, by far the leading sc i e n t i f i c and cultural center, this i s a remarkably low figure. This share, however, would appear significantly higher-- although i t would s t i l l be far below the North American l e v e l — i f the gas used for toplifikatsiya were included (see page 43). Space heating by this method is practised on a very large scale in the industrial core of the Central Region, and by 1965 toplifikatsiya is to account for close to four-fifths 24 of a l l space-heating. (Stations providing by-product heat for space-heating are called TETs's - Thermal Electric Centers. Por their importance in Moscow, see also Table X as follows.) In industry, the share of gas was higher than that of 25 any other fuel in 1960, except for the Gorkiy area. Three 26 years before, coal s t i l l dominated even in the city of Moscow. 23 T.A. Brents: "Novye optovye tseny na gaz," Gazovoye  Delo. No. 8, 1963, p. 47. 24 Tsentral'nyy Rayon, p. 174. 25 A. Riznik and S. Litvak, op. c i t . , Vestnik S t a t i s t i k i , No. 6, 1962, p. 24. 26 Tsentral'nyy Rayon, p. 273. 104 Table X Forecast of Moscow City's Fuel Mix in 1966 (in 1000 tons of nominal fuel) Consumer Sectors Natural Gas LPG Coal & Coke Fuel O i l Wood Kerosene Domestic 635 49 10 Municipal 577 1 137 300 10 Industrial 4863 4 590 129 20 TETs's 7009 721 Other Electric Stations 1915 3 250 45 Total 14999 57 1698 429 75 10 Source: Referativnyy Zhurnal, No. 5, E31, 1964. The metal working, engineering, building material, printing, leather-wear and some half of the textile industry— concentrated chiefly in Moscow Oblast*— now almost exclusively u t i l i z e gas for their thermal energy need. Textile manufacturing in Ivan-ovo, however, seems to be much more inadequately supplied. When the great iron and steel complex at Novo-Lipetsk i s completed, ferrous metallurgy w i l l also become a major consumer of natural gas in the Central Region. The cost figures for the Lipetsk m i l l are very good regarding the iron ore (high grade K M A ore), but are very high with respect to coal, which w i l l have to be 27 hauled from the expensive Donets mines 600 kilometers away. 27 I.P. Bardin and P.A. Shiryayev: Tretya Metallurgi- cheskaya Basa SSSR, Izdatel'stvo "Znaniye", Moskva, 1959. 105. Every effort w i l l be made, therefore, to reduce coke expenditure, and the mill could be expected to use more gas than any other of comparative size in the USSR. It is very conveniently located regarding pipelines, for the three trunklines from the North Caucasus pass very near. The large amount of scrap available in the Center means that many open-hearth furnaces w i l l be used 28 despite increasing reliance on oxygen converters. And open-hearth steel making, as shown in Chapter II)is dominated by natural gas. The Central Region also accounts for the bulk of the Soviet chemical output. Approximately half of a l l plastics, synthetic rubber and chemical fibers, and nearly a f i f t h of a l l 29 f e r t i l i z e r s are produced here. Up until now, coal and vege-table fats, starches, etc. were the chief raw materials. Even in 1962-63, one-third of a l l vegetable fats and two-thirds of a l l starch produced in the USSR as a whole was used as chemical 30 raw materials, a very high share of that in the Center. At the same time, the coal-based chemical industry had to u t i l i z e imported Donets coal. Only in 1958 was natural gas f i r s t used, for instance, to manufacture f e r t i l i z e r s - at the Novomoskovsk 31 Chemical combine. Today, the combine is producing ammonia, 28 R.S. Livshits: Sebestoimost' Produktsii v Tyazheloy  Promyshlennosti SSSR. Akademiya Nauk SSSR, Moskva, 1961, p. 164. 29 Pravda, Jan. 5, 1964, p. 2; N. Nekrasov: MZonal*noye razmeshcheniye khimicheskoy industrii," Voprosy Ekonomiki, No.3, 1964, p. 25. 30 Ekonomicheskaya Gazeta, Dec. 14, 1963. 31 Gazovaya Promyshlennost1, No. 3, 1964, p. 1. 106. urea, ammonium nitrate, sulfuric acid, etc. It i s planned to extend i t s range of products to include methane-based organic chemicals, such as methyl alcohol, chloromethanes and their 32 derivatives. Until 1959 the plant worked at a d e f i c i t , reach-ing 350,000 rubles in 1958, due mainly to the high cost of raw material and f u e l . Only since the changeover to natural gas did i t begin to register profit. The cost of production of methyl alcohol and ammonia were reduced— in comparison to pre-33 vious costs from coke-- by 40 percent. A smaller plant, pro-ducing ammonia and liquid nitrogen f e r t i l i z e r s has recently 34 gone on stream at Shchekinsk. However, since these seem to be the only ones working on natural gas, and since the Center produces probably two million tons of n i t r i c f e r t i l i z e r s , at least 60 percent of their output in this region must s t i l l be 35 based on coal. The organic chemical industry, too, i s s t i l l very largely dependent on "imported" coal and plant alcohols. Regional data i s not available, but the Center, with i t s very high share of organic capacity, seems to conform closely to the national 32 Ekonomicheskaya Gazeta, Dec. 7, 1963, p. 6; Digest of  Soviet Press. Vol. 15, Ho. 51, p. 24-25. 33 Ibid. (Ekon. Gazeta), p. 6; P. Sheyenkov: "Pod'em proizvodstva mineral'nykh udobreniy," Ekonomicheskiye Hauki, Izdat. Vysshaya Shkola, Moskva, Ho. 1, 1964, p. 6. 34 Ibid., (Ekonomicheskaya Gazeta), p. 6. 35 Estimated from: Promyshlennost1 SSSR. 1963, p. 142; H. Hekrasov, op. c i t . , Yoprosy Ekonomiki, Ho. 3, 1964, p. 25; Gudok, Hov. 13, 1963, p. 3. Trans, in US JPRS, Eeb. 4, 1964, 23053, p. 45; Gazovaya Promyshlennost1 1963, Ho. 11, p. 3. 107. pattern. Thus some half of the plastic plants appear to use coke-chemical Intermediates and a f i f t h of the large synthetic rubber industry uses grain and -wood derived ethyl alcohol as 36 i t s major raw material. Aside from acetylene production-associated with the manufacturing of ammonia production at Novomoskovsk and Shchekinsk— natural gas hardly contributes yet to the organic chemical industry of the region. It i s a moot point, however, whether the construction of large petrochemical plants to supply the plastic rubber and fiber industries of the Center i s economically j u s t i f i e d . The region would have to receive LPG or s t i l l sufficiently "wet" natural gas from the Volga at costs no less (and often greater) than those of petrochemical intermediates. In addition, the manufacturing of these intermediates require high fuel and energy but low labour inputs in contrast to the manufacturing of plastics and synthetic fibers where the opposite situation applies. As shown before, the Center excels in labour but i s badly deficient in energy. Many specialists, therefore, advise a separate location for the production of petrochemical inter-mediates near sources of raw material, fuel and electric power as in fact exist in the United States. Some petrochemical industry i s being developed in the Center, but i t is largely linked with the recently built refineries at Ryazan, Yaroslavl" 37 and Gor'kiy. 36 Ekonomicheskaya Gazeta, Dec. 14, 1963, p. 20 and Aug. 10 , p. 18. 37 Geograficheskiye Problemy Razvitiya Krupnykh Ekono-micheskikh Rayonov SSSR, p. 74-75. 108. THE LENINGRAD REGION The Leningrad Region in this analysis includes the ring of ohlasts around the second metropolis of the USSR. Besides Leningrad Oblast 1, i t embraces Pskov, Novgorod and the western part of Vologda Oblast 1, as well as the southern quarter of the Karelian ASSR. The size of Germany (both East and West), the region is inhabited by a l i t t l e over 8 million people, three and a half million of whom live in the city of Leningrad. No other region, not even the Center, i s so thoroughly dominated by one metropolis. Outside Leningrad and i t s sate l l i t e towns, l i t t l e industry is found aside from saw milling and food pro-cessing. Cherepovets, with i t s ferrous metallurgy, i s the only exception, but i t s large, integrated iron and steel m i l l , too, 38 was established for the purpose of supplying Leningrad. The Leningrad Region holds a position of importance in the national economy out of a l l proportion to i t s population and natural resources. The Leningrad Oblast' alone contributes about 6 percent to the gross industrial production of the USSR, and the whole region, as outlined above, accounts for roughly 39 the same share of total fuel consumption. Its local energy 38 Akademiya Nauk SSSR and Leningradskiy Universitet: Severo-Zanad RSESR, Izdatel'stvo "Mysl"', Moskva 1964, p.424. 39 Ibid., p. 336 and "Statisticheskiye Materialy," Vestnik  S t a t i s t i k i . No.5, 1962, p.91. The table gives 6.8 percent as the share of the whole North-West Economic Region, which includes, in addition to the above area, Murmansk and Arkhangelsk Oblasts, the Komi ASSR and the rest of the Karelian ASSR. The population of these outer d i s t r i c t s , however, is only a sixth of the whole North-West, and with the exception of Murmansk Oblast',the area i s no more urbanized than the rest. Its fuel consumption, therefore, is not likely to exceed a sixth of that of the whole North-West, especially, since the share of hydro-electricity in the energy mix of Murmansk is very high. Map 8 109 E N E R G Y S U P P L Y O F T H E L E N I N G R A D A N D B A L T I C R E G I O N S 110. base, however, could hardly be less satisfactory. Aside from moderate resources of peat and shale no local fuel i s available and the hydroelectric potentials of the region have now been almost fu l l y developed. For most of i t s energy needs, Leningrad has had to depend on fuels brought in from great distances. Industry in the city has grown up during Tsarist periods, based entirely on foreign coal (and metal), which could be imported cheaply by sea. Im-ports of foreign coal gradually ceased after the Revolution (by 1926), but despite careful u t i l i z a t i o n of local peat and shale, the great bulk of fuel consumed in the region had to be brought in from afar. Donets and later Pechora coal has supplied the greater part of the fuel required, while the southern section of the region (Pskov Oblast) has received l i g n i t e — even as late as 1960— from the western end of the Moscow Basin, where ex-40 traction is the costliest. The Leningrad Region, therefore, i 3 an area where an increase in the contribution of hydrocarbon fuels appear highly significant. However, the d i f f i c u l t i e s are great, especially for natural gas. Of a l l regions of European Russia, the above one l i e s farthest from the major gas (and oil) deposits: the North Caucasus is over 2000 kilometers away, the Eastern and the f/estern Ukraine are each over 1200, while the Volga i s about 1500. Because of such distances, Leningrad i s reached by only one natural gas pipeline today, which branches off from the __ Geograficheskiye Problemy Krupnykh Rayonov SSSR. p. 69. 1 1 1 . North Caucasus - Moscow system at Serpukhov. (Leningrad also receives shale gas through two short pipelines from Estonia and from the c i t y of Slantsy). The c i t y of Cherepovets, i n the eastern extremity of the region, i s reached by a l i n e from Saratov Oblast' on the Volga. The pipeline from Serpukhov may be doubled, while another from Bryansk and Minsk i s a p o s s i b i l i t y through which both Dashava and Shebelinka gas could go to the head of the Finnish Bay. Because of remoteness from the gas f i e l d s and the cost-l i n e s s of transporting natural gas, consumers i n Leningrad must purchase th i s f u e l at a higher price than i n any other region 41 of the USSR, two rubles higher, for instance, than i n the Center. It must be remembered, however, that Leningrad has been receiv-ing coal from f i e l d s j ust as f a r away. Coal transport by r a i l i s not much cheaper than the transport of gas, and coal extrac-t i o n costs are several times higher (see Table VII,Appendix)• Due to i t s le s s favorable location, however, Leningrad i s receiving the benefits of natural gas much more slowly than Moscow. ¥/hile Leningrad burned only 1.8 b i l l i o n cubic meters of gas i n 1961, Moscow - l e s s than twice the size of the former 42 c i t y - burned four times as much. Two years l a t e r , Leningrad s t i l l received only about a t h i r d as much natural gas as the Soviet c a p i t a l . In that year, i t consumed 2.9 b i l l i o n cubic 4 1 T. A . Brents: "Novye optovye tseny na gaz," G-azovoye  Delo, No. 8, 1963, p. 46-47. 42 Severo Zapad RSFSR, p. 174 and Yu. I. Bokserman, op. c i t . , - p. 275, Table 105. 112. meters, while an additional 600 odd million cubic meters of 43 shale gas was brought in from Estonia. Under these circum-stances gas contributes much less to the fuel mix of the city than in Moscow. Although for domestic and municipal consump-tion, gas was available for nearly the entire population, in the total fuel, balance of Leningrad i t s share (shale gas includ-44 ed) was below a quarter. Although Donets coal would s t i l l be imported in f a i r l y large quantities, by the end of 1965 the planners hope to replace with natural gas the even more expen-sive coal from the Pechora Basin - which at present supplies 45 over half of a l l coal consumed in the ci t y . Earlier i t was hoped that the share of gas in the fuel mix of Leningrad could 46 be raised to 80 - 90 percent during the present plan but this does not seem possible any more. Because, relative to i t s population, Leningrad receives much less gas than Moscow, seasonal fluctuations are less severe in the former city than in the latter. If an interesting plan materializes, Leningrad would actually receive more gas during the warmer half than during the colder half of the year. This would be done in order to increase the flow over the North 43 . Yu. I. Bokserman, op. c i t . , p. 279, Table 107. 44 Geograficheskiye Problemy Razvitiya Krupnykh Ekonomi- cheskikh Rayonov SSSR. P. 141, footnote 2. 45 Severo-Zapad RSPSR, p. 171 and 177. 46 K.V. Dolgopolov et a l : op. c i t . , p. 126. 113. Caucasus - Moscow pipelines, which are greatly underutilized 47 from May to October. Since the trunkline to Leningrad i s not working at f u l l capacity at any time of the year, i t could easily transmit the extra amount. It w i l l not be easy, however, to increase greatly the amount of natural gas sent to Leningrad, and new deposits w i l l 48 have to be tapped by about 1970 in order to satisfy demands. Aside from the chief metropolis and i t s satellite towns, Novgorod and Cherepovets are the only sizable c i t i e s today in the entire region that are supplied by natural gas. Consumption outside Leningrad is certain to be under a b i l l i o n cubic meters per year. The share of various industries in the consumption of gas is not known, but certain characteristics of this breakdown are possible to discern. Machine building and metal working, which accounts for over half of a l l the industry in Leningrad Oblast' are probably the largest consumers. Electric stations, on the other hand, burn relatively l i t t l e — a fact partly due to the high share of hydroelectricity in the region (over half of a l l electricity consumed in the Leningrad conurbation, for 49 instance, is generated by hydroplants). As yet a l l large ther-mal stations seem to be running on coal, peat and shale the year 50 around, and due to the general shortage of gas in every branch 47 Yu. I. Bokserman: op. c i t . , p. 277 (Table 106), 279 and Table 107. 48 Severo-Zapad RSFSR, p. 174. 49 Geograficheskiye Problemy Krupnykh Rayonov SSSR, p.141. 50 Severo-Zapad RSFSR, p. 172. 114. of industry, i t i s doubtful that gas w i l l be used - at least in the near future - on a large scale for power generation even in Leningrad. The chemical industry of the region does not u t i l i z e natural gas as raw material nor - i t seems - for power, though may use i t for space-heating. Synthetic material production i s s t i l l based entirely on coal and plant alcohol, and the future petrochemical industry w i l l be linked with the big o i l refinery 51 under construction at K i r i s h i . Natural gas, reaching Leningrad over a distance of 2000 kilometers, is far too dry for the pro-duction of olefines, and the manufacturing of acetylene would not be economic in a region which is short of fuel and not rich in electric power. Gas could be used in the production of much needed n i t r i c f e r t i l i z e r s , as i t may soon be in the recently completed Novgorod chemical plant. However, experience has shown that ammonia, urea, etc. can be manufactured from shale 52 at no greater cost than from natural gas. It i s possible, therefore, that the use of gas in the manufacturing of n i t r i c f e r t i l i z e r s w i l l be limited in the region, especially 3ince i t is so short of fuel. Ferrous metallurgy consumes natural gas at the large integrated iron and steel complex at Cherepovets. The m i l l is the most expensive producer in the whole of the USSR due to the remoteness and high cost of both ore (from the Kola Peninsula) — Vechernyy Leningrad, March 26, 1963, Trans, in US JPRS 21250 and Severo-Zapad RSFSR, p. 174. 52 Severo-Zapad RSFSR, p. 202. 115. and coal (from the Pechora Basin). Because of the high cost of pig iron and the ready a v a i l a b i l i t y of scrap (from Leningrad as "well as from the Center), open-hearth furnaces are economic, 53 and their capacity w i l l be substantially increased. Both iron smelting and s t e e l making, therefore, benefits greatly from the u t i l i z a t i o n of natural gas. These benefits, however, are sev-erely limited by the modest amount of gas a v a i l a b l e . The dep-o s i t s of Saratov Oblast', which also serve Gorkiy ( f i f t h largest c i t y of the USSR) Ivanovo and Y a r o s l a v l , are unable to spare much for the c i t y of Cherepovets, and i t i s s i g n i f i c a n t that the 54 pi p e l i n e works f a r below f u l l capacity. THE BALTIC REPUBLICS AMD BYELORUSSIA Byelorussia, the three B a l t i c Republics and the adjoin-ing Kaliningrad Oblast' of the RSPSR form the poorest economic region of the inhabited portion of the USSR. Somewhat larger than the Leningrad Region, but with 15 and a h a l f m i l l i o n i n -55 habitants - only 44 percent of them urban - t h i s area lacks both the raw material and energy resources as well as the s k i l l e d population necessary for i n d u s t r i a l development. In contrast to the Leningrad Region which can at least p r o f i t from having close to a quarter of the hydro-potentials of European Russia 53 Severo-Zapad RSPSR, p. 191. 54 G.S. Urinson et a l : op. c i t . , Gazovoye Delo, Ho. 4, 1963, p. 5-7. 55 Harodnoye Khozyaistvo SSSR v 1962 g, p. 10, 20, 33 and 34. 116. 56 nearby ( i n K a r e l i a , Murmansk Oblast', Arkhangelsk Oblast', etc.*), the B a l t i c , Byelorussia, and the neighbouring areas are very d e f i c i e n t a l 3 0 i n t h i s resource. Even though manufacturing capacity i s limited and plans for i n d u s t r i a l development emphasize labour-intensive industries, the chronic poverty in energy has been and continues to be a major problem. More than 60 percent of the f u e l needs of both L a t v i a and Lithuania are supplied by f u e l s brought i n from other regions, while i n Estonia-- which r e l i e s extensively on i t s 57 shale r e s o u r c e s — the figure i s about 27 percent. Byelorussia has leaned extensively on i t s very substantial, though unecon-omic, peat resources and on firewood. These two materials made up nearly 60 percent of the f u e l mix as late as 1958. Almost 40 percent was supplied by Donets, L'vov and even by Moscow 58 Basin coal. The B a l t i c and Byelorussia, therefore, represents a region where the substitution of hydrocarbon f u e l s for s o l i d f u e l s (especially coal and peat) i s very economic— a l l the more so since i t i s closer to gas, though not to o i l , f i e l d s than the Leningrad area. Prom Dashava (Western Ukraine) to Minsk the distance i s only 600 kilometers, while V i l n i u s and Riga are an additional 100 and 350 kilometers away. Distances from the 56 Geograficheskiye Problemy Krupnykh Rayonov SSSR, p.141. 57 Ibid., p. 162. 58 Mi. L. Polonskiy and M. I. Rostovtsev: Byelorusskaya  SSR, Uchpedgizdat, Moskva 1964, p. 158 and Geograficheskiye  Problemy, p. 69. 117. large Shebelinka f i e l d in the Eastern Ukraine are only slightly greater. Dashava gas is 1.5 to 2 times cheaper even than Volga 59 fuel o i l and several times cheaper than coal (see also page200). The region is supplied -with natural gas today through a three-pronged pipeline from the Dashava deposits-- one prong leading to Minsk, another to Riga through Vilnius, the third to Grodno on the Polish border. Aside from the Grodno branch line which i s probably smaller, these are large diameter lines of 28 and 32 inches. Once a l l five compressor stations are completed, daily capacity on the Dashava-Minsk section w i l l exceed 22 million cubic meters, or 5.6 b i l l i o n cubic meters per year, 60 assuming a 70 percent load-factor. By the end of 1965, the Baltic Republics and Byelorussia are to receive annually six b i l l i o n cubic meters of gas from the West-Ukrainian fi e l d s . Lithuania w i l l take approximately 1.8 b i l l i o n , Latvia 1.2 b i l -l i o n and Byelorussia about 3 b i l l i o n . If the plan is f u l f i l l e d , natural gas w i l l account for some 30 percent of the fuel mix 61 in both Latvia and Lithuania and for 24 percent in Byelorussia. It i s a proof of the lingering idea of regional autarky and of the "marginal11 importance of the Baltic Republics that i t i s not planned to introduce natural gas to Estonia in the near future. The exploitation of o i l - s h a l e — which at present 59 Referativnvy Zhurnal, No. 7, E43, 1963. 60 Yu. I. Bokserman: op. c i t . , p. 126. 61 Referativnvy Zhurnal. No. 3, E52, 1962, and M. L. Polonskiy and M. I. Rostovtsev: op. c i t . , p. 158. 118. supplies close to three-fourths of a l l fuel consumed— -will he intensified. As today, demand for gas in the Republic w i l l con-tinue to he satisfied from shale, even though shale gas is four to five times more expensive to produce than natural gas. It is planned to reduce gradually the export of shale gas to Len-62 ingrad and u t i l i z e the amount at home. Eventually, Estonia may receive natural gas from Leningrad through the existing 63 pipeline for shale-gas — a course of action much doubted by the writer. However, the price of gas at present i s fixed in such a way that even in that case gas would be much more expen-64 sive in Estonia than in the other Baltic Republics. Compared to more crucial areas of the European USSR, the region is s t i l l very poorly supplied. Only 242,000 apartments received natural gas in 1963 or 1.2 million people i f we assume five persons per living quarters. This is merely 8 percent of the region's population, far below the average for Soviet Europe 65 (16 percent) or even for the whole of the USSSR. More than two-thirds of the apartments which consume gas in the region receive their supply not through the Dashava-Baltic pipeline system but by r a i l from gas processing plants (liquefied propane 62 Geograficheskiye Problemy Krupnykh Rayonov SSSR, p.163. 63 Ibid., p. 163. 64 T. Brents: op. c i t . , Gazovoye Delo, No. 8, 1963, p. 46. 65 Gazovaya Promyshlennost", No. 10, 1963, p. 55 and Narodnoye Khozyaistvo SSSR v 1962 g, p. 20-24. 119. 66 and butane). This indicates that the greater part of the area i s not considered v i t a l enough to justify the construction of branch pipelines. In the production of electrical energy per capita the Baltic lags behind most regions of the USSR. A l l Republics gen-erate less than the national average - Byelorussia less than 67 one-third as much. Map 8 shows the distribution of power stations and the modest share of natural gas in the production of e l e c t r i c i t y . Only a few stations are running on gas and two of these are not yet f u l l y completed. The one serving Minsk is a thermal electric center, providing not only electricity but also by-product heating (toplifikatsiya) for the city. The most important, however, is the very large station thirty miles west of Vilnius. Its f i r s t section, with a capacity of 1.2 million kilowatts, w i l l start functioning in 1965. Its u l t i -68 mate capacity, however, w i l l be double that. Natural gas i s not going to play a major role in the chemical industry either. Its only contribution is in the pro-duction of f e r t i l i z e r s . A large plant producing ammonia and i t s 69 derivatives now uses gas at Grodno, while another one i s under 70 construction in Lithuania. As in the Leningrad Region, however, 66 Ibid., (Gazovaya Promyshlennost'), p. 55. 6 7 Geograficheskiye Problemy Krupnykh Rayonov SSSR. p. 164 and 181. 68 New York Times, June 24, 1962, p. 60. 69 M.L. Polonskiy and M.I. Rostovtsev: op. c i t . , p. 74. 70 Geograficheskiye Problemy, p. 168. 120. much, of the planned production of n i t r i c f e r t i l i z e r s is to be based on the hydrogen gases of o i l shales, which are actually claimed to be simpler and more economic raw materials than 71 natural gas. The latter w i l l be used primarily as fuel. THE URAL REGION The Ural Economic Region rivals the Eastern Ukraine as major center of heavy industry. It accounts for a third of steel smelting and rolled steel output and up to 30 percent of 72 heavy machine building. In addition, a large portion of the nonferrous metallurgical capacity of the USSR is concentrated within i t s boundaries. Despite i t s industrial pre-eminence and large area (the size of Spain), the region s t i l l contains only 14 million people. Two thirds of these, however, live in c i t i e s , 73 which have grown very fast over the last quarter of a century. The Urals received the lion's share of people and industry trans-fered from European Russia during the war and maintained i t s momentum up to the present day. This region accounts for about a sixth of a l l fuel con-sumed in the USSR, roughly the same share as i t s r i v a l , the 74 Donets-Dnieper. Unlike the latter, however, the Urals has been 71 Ibid., p. 167-69. 72 Geograficheskiye Problemy Krupnykh Rayonov SSSR, p.294 73 Narodnoye Khozyaistvo RSPSR v 1962 godu. p. 9,10,13; and Narodnoye Khozyaistvo SSSR. v 1958 godu, p. 20-30. 74 D.I. Maslakov: Toplivnyy Balans SSSR. Gosplanizdat, Moskva, 1960, p. 160 and "Statisticheskiye Materialy," Yestnik  S t a t i s t i k i , No. 5, 1962, p. 91. Map 9 121 T H E U R A L R E G I O N -o-A Oil field • Bituminous coal • Lignite Hydroelectric s tat ion H y d r o e l e c t r i c s t a t i o n . " (under construct ion) * T h e r m a l stat ion T h e r m a l stat ion (under const ruct ion) Iron and s tee l plant G a s pipeline Gas pipeline (under construct ion) Oi l pipeline from "Gazli Scale; I cm. 6 0 km. 122. perpetually handicapped "by fuel and power shortage and today probably imports more fuel than any other region of the USSR. Coal has been the mainstay of the Uralian economy, accounting for 80 percent of a l l fuel consumed in 1958. Forty-one million tons of that coal, however, comprising close to a half of the total by weight but two-thirds by c a l o r i f i c content, had to be brought in from the Kuzbass and from the Karaganda-Ekibaztuz fields 1500 and 800 miles away. The burden of such "imports* by r a i l , and the high cost of the Ural lignites themselves, makes i t imperative to raise the share of natural gas and fuel o i l in the energy-balance of the region. While the Ural is conveniently situated with respect to the major oil-producing region of the country, the Volga, i t l i e s far away from the principal proved reserves of natural gas. The only deposits that can spare large amounts are in Middle Asia and in the Lower Ob Valley, 1400 and 900 miles from Sverdlovsk respectively. The f i r s t branch of the Bukhara-Ural 42-inch trunkline was completed in the autumn of 1963 and is currently being doubled. Another 42-inch line i s under con-struction from the Berezovo (Lower Ob) area, where the recent discovery of the large Punga f i e l d guarantees adequate supplies. By the end of 1965, the Urals were to use over 25 b i l l i o n cubic meters of natural gas, accounting for over 30 percent of 75 D. I. Maslakov: op. c i t . , p. 160. 123. 76 fuel requirement. There appears to be some delay in this plan, however. The Middle Asian pipeline transported, at most, seven b i l l i o n cubic meters in 1964, planned output for 1965 in Uzbek-77 istan has been scaled down to 17 b i l l i o n , and the Berezovo line is but half finished today. Yet there i s no doubt that very large quantities of gas w i l l soon reach the Urals. The twin lines from Bukhara are to transport 21 b i l l i o n cubic meters, while 78 the line from the Lower Ob could easily handle 10 b i l l i o n . Besides these two areas, the Urals also receive gas from the Volga. Over some years now, two small lines, from Bashkiria and from Orenburg Oblast 1 have been supplying a few hundred thousand cubic meters to the metallurgical works of Magnitogorsk and Orsk, and are now connected to the trunkline from Central Asia. As in the Eastern Ukraine, the major consumers of gas are, and w i l l be, the metallurgical plants. Of the 21 b i l l i o n cubic meters, for instance, to be sent north from Gazli, over 12 b i l l i o n w i l l be used by metallurgical plants, four and a half b i l l i o n by power stations and roughly a b i l l i o n by the domestic 76 N. P. Mun'ko: Gazovaya Promyshlennost Uzbekistana, Gosizdat Uz SSR Tashkent, 1963, p. 84; Yu. I. Bokserman et a l : "•Nekotorye Voprosy Gazovogo Snabzheniya Narodnomu Khozyaistvu, '* Panovoye Khozyaistvo, March, 1960, p. 29; K.V. Dolgopolov: op.  c i t . , p. 101. There is some disagreement arising between the authors. Mun'ko, writing in 1963, places the share of gas as 35^, the latter two authors, writing in 1959-60, put i t as 27 and 28%. 77 Theodore Shabad: News Notes, Soviet Geography, Peb. 1964, p. 59 and 60. 78 Yu. I. Bokserman: op. c i t . , p.136 and Table 54,p.143. 124. and municipal sector. 1.8 b i l l i o n w i l l be needed to run the 79 compressor stations of the pipeline i t s e l f . Gas w i l l have a virtual monopoly in furnaces (except, of course, in blast fur-naces), while the highly sulfurous fuel o i l and local lignite w i l l be (and are) used almost exclusively under boilers. Save for coking coal, "imports" of coal w i l l nearly come to an end 80 and production from local basins w i l l be reduced. S U M M A R Y The four regions treated in this chapter are character-ized by varying degrees of poverty in fuel resources, and they a l l import large quantities of natural gas from distant pro-ducing areas. Since gas i s a quality fuel, the delivery of which, in addition, requires massive capital outlay, the amount consumed in each region depends primarily on the relative im-portance of that region to the national economy. Thus both the Industrial Center and the Urals (even today and certainly in the future) consume much more than the Leningrad area, Byelo-russia and the Baltic combined. The contribution gas makes to the fuel balance i s also considerably higher in the former two regions than in the latter ones. While, thanks to this fuel, 79 P. Galonskiy: "Neftyannaya i gazovaya promyshlennost* SSSR," Neftyannoye Khozyaystvo, No. 11, 1963; N.P. Mun'ko, op. c i t . ; p. 30 and Yu. I. Bokserman: op. c i t . , Planovoye  Khozyaistvo, March 1960, p. 30. D.I. Maslakov (op. c i t . , p.162) writing somewhat earlier, gives slightly different figures. 80 D. I. Maslakov: op. c i t . , p. 162. 125. the output of lignite and peat i s being reduced in the Center and in the Urals, the output of shale and peat i s increased in the less v i t a l western areas. Though the industrial sector predominates everywhere, the pattern of consumption varies greatly according to the characteristics of each individual region. Thus in the Center power stations account for a disproportionately high share, due largely to heavy interruptible sales during the season of low demand. In the Urals, some three-fifths of a l l gas i s to be used in metallurgical works. Since these are very stable consumers, exhibiting a minimum of seasonal fluctuation, large summer sales to power plants are unnecessary. Similarly, Leningrad and the Baltic also"have their own distinct consump-tion patterns. 126 Chapter VI REGIONS WHICH PRODUCE AND CONSUME 127. THE GREATER UKRAINE Second in population and third in area, the Ukrainian SSR plays a decisive role in the economy of the Soviet Union. The industry of the Republic, however*: i s almost wholly con-centrated in five oblasts (out of a total of 25) in the eastern extremity of the Ukraine. Less than a quarter of i t s area, this Dnieper-Donets Region contains 35 percent of the popu-lation and over half of a l l urban dwellers of the Republic. The adjoining western portion of Rostov Oblast 1 in the R3ESR is logically part of the Dnieper-Donets Region, and i s so treated here. The rest of the Ukraine - together with the small Mol-davian SSR i s very highly rural (63 percent), contains no in -dustry aside from Kiev and two or three other c i t i e s , and 1 consumes l i t t l e energy. These two, very different, parts of the Greater Ukraine, therefore, are dealt with separately. The Donets-Dnieper Region Though relatively less important than before the war, the Donets-Dnieper area is s t i l l v i t a l to the Soviet economy, especially in the sphere of heavy industry. Despite wartime devastation and slower growth, i t s t i l l matches the much larger Ural Region in output of iron and steel, while in fuel produc-tion i t is but slightly behind the Volga. With about 17 percent of the total, i t i s the largest fuel consumer in the USSR, -Narodnoye Khozyaystvo SSSR v 1962 g, p. 22 and 40; "Statisticheskiye Materialy," Vestnik S t a t i s t i k i . No. 5, 1962, p. 91. THE GREATER UKRAINE Lvov ® \Borislav Dashava MOLDAVIA • Coal & Brown Coal • Oil A Gas # Iron and Steel Plants m 9 9 oil Pipelines O O O - Gas Pipelines O Gas Pipelines (under construction) • ••0-"0— Gas Pipelines (projected) S c a l e : 1 c m . 60 K m . Dneiper-Donets-Rostov Industrial Region Kishinev ®-o. A * Poltavaf. Khar'kov Y%.v:v : -V.-// : ':\^V-v. : ^V-^ebel'i 'nk^^ •"f^tn n^''-i^\ Lisichansk © • • • Krivoy^jog ^Dnepropetrovsk _ 1 XJorlovkal^... , v . ...jfll Donetsk^ O.. 4 X \Zaporozhye •;. /T-." :Mmyyy&0m^ " — ^ • ';V: :;::;:;/:V:;-^ .-.v ZhdanpS Lugansk: 70dess o^-0...0..o- o-.0 0 "O—o o-o-129. 2 exceeding the Urals by a small margin. Coal and natural gas are the two fuels produced in that industrial heartland of the Ukraine. Coal i s by far the most important. Out of a total of 203 million tons of hard coal equivalent (7000 Cal per ton) produced in 1961, natural gas accounted for only percent (16.8 million tons of coal equiv-3 alent or 13.9 b i l l i o n cubic meters). Yet this region is the second largest producer of natural gas in the Soviet Union (after the North Caucasus) and, moreover, a l l this production comes from one single f i e l d , Shebelinka. In addition to gas, the Shebelinka deposit also contains condensates, and although s t i l l only partially extracted, the amount produced is surpassed only by Krasnodar Kray. On account of the predominance of heavy industry in the economy, the Donets-Dnieper region is an exceptionally heavy consumer of fuel. As with production, the share of gas is much below that of coal, and, moreover, this share has been increas-ing more slowly, than, for instance, in the Central Region. In 1960, the Donets-Dnieper region seems to have consumed between eleven and twelve b i l l i o n cubic meters of natural gas, matching 2 "Statisticheskiye Materialy," Vestnik S t a t i s t i k i , No. 5, 1962, p. 91; 16 percent is given for the Donets-Dnieper region excluding the Rostov-Shakhty area. 3 Narodnoye Khozyaystvo SSSR v 1961 g. p. 205 and V. T. Borisov: "Proizvoditel'nost'truda i puti yeye povysheniya v dobyche gaza," G-azovoye Delo, No. 10, 1963, p. 68. 130. 4 the amount utiliz e d in the Center. Recent literature, however, complains of the slow growth of gas supply to the industries of the Eastern Ukraine and i t i s unlikely that more than 15 b i l l i o n cubic meters are used today, even though 9 b i l l i o n were planned to be utilized in Donets and Lugansk Oblasts alone by the end 5 of 1965. Because of proximity to the Donets coal basin— which, however, produces very expensive c o a l — the price of gas i s fixed higher than warranted by the presence of the p r o l i f i c Shebelinka f i e l d and the nearness of the North Caucasian de-6 posits. While not significant as a deterrent to use in an econ-omy where planned allocation i s s t i l l the general rule, the decision illustrates the problems of planning organs, which both want to increase consumption and also conserve gas for re-gions without alternative solid fuels. 4 Calculations from data supplied by Vestnik S t a t i s t i k i , No. 5, 1962, p. 91 and 87, give 13.8 b i l l i o n cubic meters for the region without the Rostov-Shakhty area. Referativnyy Zhurnal, No. 5, 1962, E15, gives 18.5 b i l l i o n cubic meters for the Ukrai-nian SSR, from which the three southern oblasts plus Zakarpatiya must be excluded since they were not yet receiving gas. Bokserman claims that 3.5 b i l l i o n cubic meters were consumed by the non-domestic and municipal sectors of Donets and Lugansk oblasts and 2.3 b i l l i o n by those of Kharkov sovnarkhoz (essentially Kharkov Oblast) in 1962 (Yu. I . Bokserman: "Za dal'neyshey uluchsheniye ispol'zovaniya prirodnogo gaza, "Gazovaya Prom-yshlennost', No. 3, 1963, p . l and Puti Razvitiya Novoy Tekh-n i k i ... p. 240. 5 Geograficheskaya Problemy ... p. 191-92 and Yu. I. Bokserman: op. c i t . , Gazovaya Promyshlennost', No.3, 1963, p. 1. 6 T. Brents: op. c i t . , Gazovoye Delo, No. 8, 1963, p. 46. 131. One may note that the Donets-Dnieper Region is both an exporter and an importer of natural gas. Shebelinka as yet supplies only Kharkov Oblast', the Dnieper Bend and Odessa and exports part of i t s production to the Center and even to Lenin-grad. The Rostov area, the Donets Basin and Zhdanov receive gas entirely from the North Caucasus, although a pipeline is planned from Shebelinka to Lisichansk. By the end of 1965, the Ukraine as a whole is supposed to take 8 and a half b i l l i o n cubic meters from the North Caucasus, and most of that w i l l go 7 to Donets and Lugansk Oblasts. As can be expected, ferrous metallurgy is by far the largest consumer in the region. Since 1958, when the blast furnaces of the region f i r s t began to u t i l i z e gas, they exper-ienced an up to 20 percent reduction in coke consumption, as the following table indicates. Blasting with gas in the mills of Donets and Lugansk Oblasts alone (accounting for half of the pig iron production of the Ukraine) led to a saving of 25 million rubles in 1960 and 1961. Since coke is sold at cost price while gas at more than double that of production plus transport cost, the real 8 saving was over 50 million rubles. — Atlas SSSR. p. 139j Geograficheskiye Problemy. p. 194 and Referativnyy Zhurnal. No. 1, 1963, E59K. 8 Yu. I. Bokserman: op. c i t . , p. 232. 132. Table XI Coke Consumption per Reduction in 1 ton of pig iron Coke Consumption Mil l s (in kilograms) (percent) Without use of Using Gas Gas (1958) (1960-61) Makayevka(Kirov mill) 864 707 18 Yenakiyevo 840 713 15 Zhdanav (Azovstal r) 831 682 18 Donetsk 1046 856 18 Zhdanov(Ilyich mill) 1042 756 27 Zaporozhstal' 671 658 A 20 Dnieprodzerzhinsk 771.5 687 & 12.3 Lugansk 830 722 A 15.0 Dniepropetrovsk 818 743 & 10.1 & Indicates that data refer to 1960. . Source: Yu. I. Bokserman, op. c i t . , p. 232 and Z. I* Nekrasov: op. c i t . , Ispol*zovaniye Gaza v Promyshlennosti, Tashkent, 1963, p. 99. The steel mills of the Ukraine pioneered also in the ut i l i z a t i o n of natural gas in open-hearth furnaces. Since Volga oi l s are highly sulfurous and the sulfur i s not removed during the refining process, the use of fuel o i l from Volga crudes, in these furnaces i s not advantageous. High quality fuel o i l (from Baku and Groznyy) i s expensive and the metallurgical works 9 of the Donbass are attempting to eliminate i t s use entirely. 9 Gosplan Ukrainskoy SSR: Voprosy Ratsional'nogo Ispol*-zovaniya Toplivno-ener&eticheskikh Resursov, Kiev, 1964,p.107. 133. The open-hearth furnaces of the Ukraine have been operating mainly on a mixture of coke-oven and blast-furnace gases, which— though freely a vailable— have low heat value. Considerable attention i s , therefore, devoted to the more intensive u t i l i z -ation of natural gas. In 1960, out of the ten mills of the Eastern Ukraine, eight used some natural gas in their open-hearths, though only at Makayevka and Zaporozhe did i t s share exceed AQ% of the total fuel-mix of these furnaces. The use of natural gas is increasing since by-product gases are more econ-omically utilized in the chemical industry, especially in the 10 production of f e r t i l i z e r s . The Donets-Dnieper region produces close to four-fifths of a l l thermal el e c t r i c i t y in the Ukraine. Though most stations run on c o a l — especially coal dust which no other consumer can u t i l i z e economically— natural gas nevertheless accounts for about a f i f t h of a l l fuel used by power plants. As can be ex-pected, the share of gas i s smallest in the stations of Donets and Lugansk Oblasts (less than 9%), but i s higher in those of Zaporozhe and Dniepropetrovsk Oblasts and very high in those of 11 Khar'kov Oblast. A relative decrease in the use of that qual-it y fuel by power plants, however, seems l i k e l y , and the pro-jected use of Dnieper brown coal in new thermal plants w i l l 10 Ibid., p. 94, Table 2 and p. 95-100. 11 Voprosy Ratsional*nogo Ispol*zovaniya Toplivno-energeticheskikh Resursov, p. 18-19 and D.I. Maslakov: op.cit., p. 114-15. 134. further strengthen the preponderant position of coal in this 12 sector. As light and consumer oriented industries are s t i l l 13 poorly developed in the region, they do not consume much gas either. In the s t i l l small-size chemical industry, East Ukrainian gas could play a major role, not only as fuel hut also as raw material. The Shebelinka deposit is one of the major sources of condensates in the USSR, even though they are present in lower concentration than, for instance, in the fields of Kras-nodar Kray. In addition, the gas contains a great deal of ethane and some propane, to pentane fractions as well (see Table V, Chapter II, p. 40). A very large chemical combine i s now under construction at Shebelinka, which w i l l u t i l i z e con-densates and gas for the production of organic petrochemical 14 products, as well as of n i t r i c f e r t i l i z e r s . The fuel also w i l l undoubtedly be gas. Two large ple,nts in the region, at Lisichansk (Donets Basin) and at Novocherkassk (near Rostov) use Stavropol' gas for the manufacture of ammonia and i t s derivatives. Since this gas is very dry, i t i s not suitable for the making of olefins, but at least one of the plants (Novocherkassk) combines ammonia production with the manufac-12 Geograficheskiye Problemy. p. 202. 13 Ibid., p. 203 and Voprosy Ratsional'nogo Ispol'zovaniya  Toplivno-energeticheskikh Resursov. p. 53-34 (for Zaporozhe Oblast 1) 14 V.M. Vol'pe and V.S. Klupt: op. c i t . , 1964, p. 26. 135. 15 turing of acetylene and uses the latter as organic intermediate. Nevertheless, an expansion of organic petrochemical cap-acity i s more economically based on the condensates and gas of Shebelinka and LPG brought in from nearby Krasnodar Kray. Unfortunately, less than half of the condensates produced today from the wells of Shebelinka are separated from the gas (8.6 million tons in 1962), the rest is allowed to enter the trunk-lines, where they increase the f r i c t i o n , reduce the pressure and thus impair the efficiency of networks. Nor is the gas processed in order to strip off the lighter fractions (ethane 16 to pentane), which are thus burned as fuels. A more rational utilization of the resources of Shebelinka i s undoubtedly necessary i f the Ukraine is to develop a sizable organic petro-chemical industry - a l l the more so since the petroleum refining 17 capacity of the Republic i s extremely limited. The Rest of the Ukraine and the Moldavian SSR Very l i t t l e information is available about the consump-tion of natural gas in the rest of the Ukraine. The Pre-Carpathian region of the Republic contains the old, but s t i l l important Dashava deposits, which produced 6 b i l l i o n cubic meters in 15 Inset, Gazovaya Promyshlennost*, No.3, 1964 and Khimiya i Tekhnologiya, No.7, 1963, p. 41-43. 16 A.P. Yakovenko: MRatsional*no ispol 1zovat* gazovyy kondernsat," Gazovoye Delo. No. 12, 1963, p. 47. 17 See two chapters, dealing with the use of Shebelinka condensates in the chemical industry, in Voprosy Ratsional'nogo  Ispol*zovaniya Toplivno-energaticheskikh Resursov, p.164-178. 136. 18 1961. Probably l e s s than h a l f of t h i s output i s consumed i n the Ukraine, since the Dashava f i e l d s are the only suppliers of the fuel-hungry B a l t i c and Byelorussia and even send gas to Moscow. Only two large c i t i e s i n the Ukrainian SSR receive gas from these f i e l d s : Kiev and L'vov. The Dashava-Kiev pipeline pumped 3 b i l l i o n cubic meters of gas i n 1962 (2.6 b i l l i o n i n . 19 1961), but a large portion of t h a t — perhaps close to a h a l f — continued on to Moscow. In 1959, domestic consumers i n Kiev received l e s s than 100 m i l l i o n cubic meters, which would indicate that t o t a l consumption by the c i t y was below one 20 b i l l i o n . L'vov being only a t h i r d of the size of Kiev, used much less than that. The large c i t i e s of the Southern Ukraine, such as Kherson, Nikolayev and Odessa, as well as Kishinev i n Moldavia, are now reached by a pipeline from Shebelinka, while another l i n e from the Kuban to the Crimean Peninsula i s pro-jected across the S t r a i t of Kerch. It i s doubtful that the Dashava f i e l d s could increase much the supply of gas to the Ukrainian c i t i e s . These deposits' are r e l a t i v e l y small, and, since the region i s by now well prospected, further discoveries are u n l i k e l y . By 1966, they 18 Calculated by subtracting the production of the She-belinka f i e l d plus the production of o i l - w e l l gases from the t o t a l production of the Ukraine: Promyshlennost' SSSR, 1963, p. 214-217 and V.T. Borisov: op. c i t . , Gazovoye Delo, No. 10, 1963, p. 68. 19 Yu. I. Bokserman, op. c i t . , p. 118. 20 S.U. Landsman et a l : "Udel'nye pokazateli, potre-bleniya gaza v zhilom sektore gorodov," Gazovaya Promyshlen-nost* , No. 2, 1963, p. 30. 137. are called upon to deliver 6 b i l l i o n cubic meters per year to Byelorussia and the Baltic, and these regions, therefore, w i l l surely claim most of the increase in production. Many of the smaller c i t i e s in the Western Ukraine, however, receive propane and butane from gas-processing plants. 340 thousand apartments in the Republic as a whole were served with LPS in 1962, most 21 of them west of the Dnieper. The Western Ukraine produced 1258.7 million cubic meters 22 of gas from o i l wells in 1963. This amount w i l l increase but slowly since the region produces only a small amount of petro-leum, and 70 percent of the gases released with o i l i s now u t i l i z e d . A l l of this, apparently, i s consumed locally, but 23 almost exclusively as fuel. The Western Ukraine has but one gas-processing plant of small capacity at Borislav. The "bottled gas, delivered to households in the Republic, therefore, must come from other regions, probably the North Caucasus. As Table Y (Chapter II, p. 40) shows, the oil-well gases of the Ukraine are rich in the ethane to pentane fractions: their use without pro-cessing i s economically ir r a t i o n a l . In the Western Ukraine, thermal stations use much more gas than in the Donets-Dnieper Region, although the total amount of elec t r i c i t y generated is only about a seventh of the total. 21 "Gazovaya Promyshlennost' v 1962 g," Gazovaya Promysh-lennost' , no. 10, 1963, p. 55. 22 Promyshlennost' SSSR, 1963, p. 216-217. 23 Pravda, Apr i l 27, 1964, p. 2. 138. (The Western and Southern Ukraine combined produce but a f i f t h o f a l l e l e c t r i c i t y i n the R e p u b l i c ) In 1961 gas accounted f o r about t w o - t h i r d s of the f u e l used by power p l a n t s i n the South West Economic Region which burned c l o s e to 3 m i l l i o n tons of 24 nominal f u e l e q u i v a l e n t . The three l a r g e s t s t a t i o n s running on gas are the L'vov and Dobrotvor r e g i o n a l p l a n t s and the K i e v TETs. Another m i d d l e - s i z e d one i s n e a r i n g completion a t Kuch-25 urgan i n M o l d a v i a . The Western Ukraine c o n t a i n s a s m a l l but c o n v e n i e n t l y l o c a t e d c o a l b a s i n near L'vov. There are author-i t a t i v e v o i c e s u r g i n g the much g r e a t e r use of t h i s c o a l f o r the g e n e r a t i o n of e l e c t r i c i t y i n order to f r e e n a t u r a l gas f o r other uses. In p a r t i c u l a r , the r e g i o n i s i n g r e a t need of n i t r i c 26 f e r t i l i z e r s and gas could be u t i l i z e d i n t h e i r p r o d u c t i o n . THE VOLGA REGION The economic r e g i o n of the V o l g a extends from Volgograd northward a l o n g the great r i v e r and i n c l u d e s the lower Kama and B y e l a y a v a l l e y s as w e l l . For the present a n a l y s i s , the M a r i and Chuvash ASSR's w i l l a l s o be t r e a t e d as p a r t of the r e g i o n . T h i s a r e a , the s i z e of France, c o n t a i n s roughly 18 24 Voprosy Ratsional'nogo I s p o l * z o v a n i y a T o p l i v n o -e n e r g e t i c h e s k i k h Resursov, - p. 16-^19. 25 I b i d . , p. 18; I z v e s t i y a , March 1, 1964, p. 1 and S.U. Landsman et a l t op. c i t . , Gazovaya Promyshlennost'. No. 2, 1963, p. 30. 26 Ekonomicheskaya Gazeta, Dec. 7,1963, p. 8 and B. J a r a -m c h i s h i n : op. c i t . , Ekonomika Radianskoy Uk r a i n e , No. 1, 1963, p. 72. Map 11 139 THE V O L G A REGION M A R I A S S R C H U V A S H A S S R T A T A R K a z a n ' A S S R B A S H K I R A S S R U f a * Al 'me.t 'evsk T u y m a z y A A-<# U I ' y a n o « o k^?s S y z r a t T k B u g u r u s l a n J A kuybyshev O r e n b u r g ®-S a r a t o v i - ^ S t e p n o y e A G A S F I E L D A O I L F I E L D <$) G A S P R O C E S S I N G P L A N T ^ H Y D R O E L E C T R I C S T A T I O N J L - T H E R M A L S T A T I O N ( G a s a n d ^ fuel o i l ) ' V o l g o g r a d G A S P I P E L I N E O I L P I P E L I N E S c a l e : 1 cm. 60 km. 140. million people, with a rate of growth nearly twice the national 27 average since 1939. Though i t s Industrial Revolution came later than that of the Urals and Kuznets Basin, i t was just as spec-tacular. Between 1940 and 1956, industrial output in i t s central oblasts and ASSR's increased faster than in any other part of 28 the Soviet Union save for Novosibirsk Oblast'. Today the Volga 29 contributes close to one-eighth of the manufacturing. The most dramatic increase took place in the production of energy: presently with as much as one-third of the total, the region i s the largest fuel producer in the USSR, exceeding even the Donets-30 Pridnieper area or, indeed, the whole of the Ukraine. In con-31 trast, i t contributed only 8 percent even as late as 1955. Natural gas represents less than a twentieth of the 32 region's fuel production, but i t is of great importance both locally and on the national scale. Roughly a third of a l l gases produced are from o i l wells (perhaps five b i l l i o n cubic meters 27 D. J. Hooson: op. c i t . , p. 69. 28 Stephen G. Prociuk: "The Territorial Pattern of Indus-t r i a l i z a t i o n in the USSR," Soviet Studies, July, 1961, p. 78. 29 D.J. Hooson, op. c i t . , p. 68. (Hooson includes Perm Oblast' and parts of Kirov Oblast', too, in his region. However, since he excludes Volgograd Oblast', the share-- close to one-eighth— should be about correct for the present analysis.) 30 Yu. I. Bokserman: op. c i t . , p. 29, Table 19 and p. 7, Table 5; Promyshlennost' SSSR. 1963. p. 194-95, 206-97, 214-15. The following conversion factors were used: 1 ton of hard coal= 1 ton of nominal fuel; 1 ton of oil= 1.43 ton of nominal fuel; 1000 cu.m. of free gas=1.21 ton of nominal fuel; 1000 cu.m. of oil-well gas=1.3 ton of nominal fuel. 31 D. B. Shimkin: op. c i t . , p. 31, Table 5. 32 See footnote 30. 141. in 1962-63), even though only 60 percent of these gases— released 33 in the course of petroleum production-- is u t i l i z e d . In view of the emphasis given to the petrochemical industry, the impor-tance of this resource cannot be overestimated. In contrast to i t s high share of fuel production, the Volga is s t i l l a modest consumer of fuel, taking but 6.1 percent 34 of the total in 1960. Most of the petroleum and perhaps a third of a l l natural gas produced leave the region to enter into 35 the energy-mix of other areas. Though the greatest storehouse of hydrocarbon fuels in the USSR, the Volga s t i l l has to depend on imported coal for much of i t s energy need. Coal accounted for over 45 percent of the fuel-mix as late as 1958, while the share of o i l and gas stood at 24 percent. By the end of 1965 o i l and gas are to contribute 33 and 40 percent respectively but coal w i l l s t i l l remain important, supplying over a f i f t h of 36 a l l fuel consumed. It i s interesting to observe that at the former date 33 Yu. I. Bokserman: op. c i t . , p. 64, Table 26; A. S. Shaposhnikov: "Sredne-Volzhskiy ekonomicheskiy rayon - forpost khimiya,"- Vestnik Moskovskogo Universiteta, Seriya Geografiya, No. 2, 1964, p. 6. 34 "Statisticheskiye Materialy," Vestnik S t a t i s t i k i , No. 5, 1962, p. 91. This figure should be slightly higher since the o f f i c i a l boundaries of the Volga Economic Region in 1960 were somewhat different from those used in the present analysis. 35 Estimated from data in Yu. I. Bokserman: op. c i t . , p. 29, Table 19; Vestnik S t a t i s t i k i , No. 5, 1962, p. 91; G.S. Urinson: op. c i t . , Gazovoye Delo, No. 4, 1963, p. 5 and 7; Geograficheskiye Problemy Krupnykh Rayonov SSSR, p. 219. 36 Ibid., (Geograficheskiye Problemy), p. 219. 142. natural gas was on par with, o i l in the fuel mix of the Volga and today probably exceeds i t by a slight margin despite the fact that i t represents but a twentieth of the region's hydro-carbon output. O i l being the more versatile and valuable pro-duct, i s indispensable in every region, even in energy-saturated Central Siberia. It is also much cheaper to transport over long distances than gas. Finally, the shortage of gas-processing factories as yet prevents the large-scale processing of o i l -well gases which, therefore, are mostly consumed locally and as fuel. At present, gas by pipeline i s supplied to other regions from Saratov and Volgograd Oblasts and-- to a very limited extent— from Orenburg Oblast 1 and Bashkiria, since only here are free gases produced in sufficient quantity to justify the construction of trunklines. A modest amount of LPG i s sent to other regions by r a i l from the few gas-processing plants of the Middle Volga. The Volga Region today produces a f i f t h of the country's natural gas, a share which is soon to be significantly reduced. The present production rate however, is severly taxing the re-sources of the area, and save for the Azerbaidzhan deposits, the Volga fields have the highest depletion rate in the USSR. Only Volgograd Oblast' i s in a better position due to relatively 37 large resources and low rate of production to date. A pipe-line i s already complete, however, to send Volgograd gas through 37 Yu. I. Bokserman: op. c i t . , p. 29, Table 19. 143. the S a r a t o v - G o r ' k i y t r u n k l i n e , which S a r a t o v Oblast' i s unable 38 to supply to f u l l c a p a c i t y . The r e s u l t of i n t e n s i v e e x p l o r a -t i o n c a r r i e d on through the past few years have been d i s a p p o i n t -39 i n g and the S o v i e t press recommends a switch to other a r e a s . The Volga, t h e r e f o r e , could soon become an importer of n a t u r a l gas e s p e c i a l l y i f the present i n d u s t r i a l b u i l d - u p i s a c c e l e r a t e d -a step s t r o n g l y urged. The tapping of the p o t e n t i a l i t i e s of the c o n v e n i e n t l y l o c a t e d Caspian Lowland i s a course most f r e -40 quently a d v i s e d . However, i t i n v o l v e s s e r i o u s d i f f i c u l t i e s — mentioned on page 6 4 — which c o u l d postpone the r e a l i z a t i o n of t h i s p l a n f o r decades. Breakdown on the u t i l i z a t i o n of n a t u r a l gas i n the econ-omy of the V o l g a Region as a whole i s not a v a i l a b l e , but the data g i v e n f o r S a r a t o v Oblast 1 i s i l l u m i n a t i n g . The very h i g h share of the b u i l d i n g m a t e r i a l i n d u s t r y ( b r i c k s , cement, g l a s s ) r f much h i g h e r than the n a t i o n a l a v e r a g e — a t t e s t s the r a p i d d e v e l -opment of the r e g i o n and a l s o p o i n t s to the g e n e r a l l a c k of c o a l . The almost f o u r f o l d i n c r e a s e planned f o r consumption by the 38 G-.S. U r i n s o n et a l : op. c i t . , Gazovoye Delo, Ko. 4, 1963, p. 5. 39 Robert E . K i n g ; op. c i t . , American A s s o c i a t i o n of  Petroleum G e o l o g i s t s , B u l l e t i n , Aug. 1964, p. 1341. 40 See f o r i n s t a n c e , H. Nekrasov: "Zonal'noye Razmesh-cheniye khimicheskoy i n d u s t r i i , " Voprosy Ekonomiki, Ho. 3, 1964, p. 31-32. 144. Table XII Consumption of Natural Gas by Sectors of Economy in Saratov Oblast (in percent of total) 1961 1965 (plan) Municipal and domestic 8.4 10.6 Chemical industry 3.7 14.0 Building material industry 23.5 18.3 Machine building 8.5 9.0 Oil and gas industries 10.8 4.1 Other industries 18.8 2.3 Electric stations 26.3 41.7 Source; G. S. Urinson: op. c i t . , Gazovoye Delo. No. 4, 1963, p. 7. chemical industry shows the future importance of the Volga as the major supplier of petrochemical products in the USSR but also shows the embryonic nature of that industry to date. Gas consumption by electric stations, however, is certain to be higher in Saratov (and Volgograd) Oblast than in the northern part of the region and the difference i s bound to increase sharply. F i r s t , since the crudes of the southern part of the Volga Region contain very l i t t l e sulfur, they are used for high-octane motor fuels and for lubricants and not under boilers. Natural gas i s , therefore, the principal fuel used by power stations, with coal making up most of the difference. Further north, however, in Kuybyshev Oblast', the Tatar and Bashkir ASSR's, fuel o i l from the highly sulfurous crudes is extensively 145. employed for the generating of elect r i c i t y , especially since the f a c i l i t i e s for the removal of sulfur are s t i l l not adequate 41 and the process is costly. At the same time, most gases here are from oil-wells and w i l l he used more and more in the LPG and petrochemical industries rather than for common fuel. Due to failure to increase reserves and due to unsatis-factory exploitation of oil-well gases, a shortage of gas in the Volga is already apparent, especially in Kuybyshev Oblast. and the two ASSR's mentioned above. There were stoppages of gas to domestic and municipal consumers at times of peak demand in 1963, and a general shortage to the same sector was foreseen for 1964. Power stations would also need more gas, and in general, the relatively meager supply of that fuel i s the chief 42 cause behind the continued imports of coal. Despite d i f f i c u l t i e s , discussed later, the Volga Region exhibits in the whole of the USSR the most favourable conditions for the creation of a large petrochemical complex, especially , for the manufacturing of organic chemicals. The region has an abundance of a l l three alternate raw materials for the pro-duction of olefins: wet natural gas, refinery gases and liquid hydrocarbons. It accounts for nearly two-thirds of a l l output of oil-well gases and boasts perhaps 40 percent of Soviet petro-— Geograficheskiye Problemy Krupnykh Ekonomicheskikh Rayonov. p. 220. 42 Yu. 3?. Zolotarev: "Eormirovaniye nefte - gaza - energo-khimicheskogo kompleksa Kuybyshevskogo promyshlennogo uzla," Vestnik Moskovskogo Universiteta, Seriya Geografiya, Ho. 3, 1963, p. 28. 146. 43 leum refining capacity. It also has an unrivaled advantage for the production of sulfuric acid - mainly from o i l , hut also from natural gas. As shown above, natural gas in the Volga does not have a monopoly as a petrochemical raw material. Its competitive position, however, i s very favorable. Of a l l regions of the country, i t i s here that wet gases are produced in the largest quantities, and they are very rich in the ethane to pentane fractions (see Table V, Chapter II, p. 40). Their liquefied propane-butane fractions have considerable economic advantages for the manufacturing of olefins over both petroleum feedstocks and refinery gases, as the following table indicates. Table XIII Cost of Ethylene in the Volga Region From Three Different Sources (in percent) Liquefied o i l Liquid petroleum Refinery viell gases . Products Gases  Cost of ethylene 100 120 154 Capital investment 100 125 175 Source: U. Pedorenko and A. Vayn..: "K probleme raz-meshcheniya Khimicheskoy industrii,™ Planovoye Khozyaystvo, l o . 5, 1964, p. 26 43 Kh. Markaryan: op. c i t . . Planovoye Khozyaistvo, No. 9, 1963, p. 77; Robert E. Ebel: op. c i t . , p. 114, Table 34, and p. 116. 147. Despite such favorable indices, the u t i l i z a t i o n of o i l -well gases as petrochemical raw material i s proceeding slowly. At the beginning of 1964, the whole of the Volga Region had but seven gas processing plants. Two of these went on stream only in 1963. Some plants s t i l l do not work at f u l l capacity, and one (at Saratov) operates so inefficiently that i t s costs are 44 six to twelve times as high as those of the other factories. The two plants most frequently mentioned (Tuymazy and Minni-bayevo)-- and thus presumably the largest ones— have capaci-45 ties of about 200 thousand tons of LPG per year. Because of the slow construction of gas-processing works the greater portion of oil-well gases produced in the Middle Volga (63 percent in 1962) are s t i l l used without processing. (And, as mentioned, the utilized amount i t s e l f i s only a frac-tion (58 percent) of the total quantity released from the 46 reservoirs.) At the same time, the synthetic industry of the region-- small though i t is at present— finds i t s e l f short of petrochemical intermediates and has to depend largely on grain and wood alcohol, glycerine, animal fat and coal-derived raw materials. Only some 15 percent of the organic chemical indus-try around Kuybyshev, for instance, i s based on o i l and gas, and 44 A.S. Shaposhnikov; op. c i t . , Vestnik Moskovskogo  Universiteta, Seriya Geografiya. No.2, 1964, p. 6; Ekonomi- cheskaya Gazeta, Feb. 1, 1964; V.I. L i z i n : op. c i t . , Gazovoye  Delo, No. 8, 1963, p. 50; Ekonomicheskaya Gazeta, Nov. 9, 1963,p.8. 45 D.A. Tsvetkov: op. c i t . , Gazovoye Delo, No.11, 1963, p. 43. 46 A.S. Shaposhnikov: op. c i t . , Vestnik Moskovskogo  Universiteta, Seriya Geografiya, No. 3, 1963, p. 25. 148. much of the hydrocarbon feedstocks used in the Middle Volga— 47 nearly a third in 1961— are actually imported into the region. The modest petrochemical industry i s linked more to o i l refin-eries than to gas processing plants, hut even in this case i t uses the uneconomic dry gases of refineries while the much more 48 valuable LRG's (liquid refinery gases) are burned as fuel. Neither i s the extraction and ut i l i z a t i o n of sulfur pro-ceeding satisfactorily. Although sour gases in the USSR are not common, many of those of the Volga area are sulfurous, the oil-well gases of Kuybyshev Oblast 1 very highly so( see Table V, Chapter II, p. 40). Because Volga o i l s also have very high sulfur content, the region i s in an ideal position for the manu-facturing of sulfur, sulfuric acid and of f e r t i l i z e r s which need this acid. Despite this fact, no sulfur i s yet extracted from gas and but l i t t l e from o i l according to available evidence. The gas processing plants of the Volga seem to process only sweet gases. No such plant exists yet in Kuybyshev Oblast, where gases, especially those from o i l wells, are very sour, and the f i r s t factory to process sulfur from o i l was to go on stream only in 1964-65. Meanwhile, sulfuric acid for the Volga chemical factories is brought in from the Urals and the Moscow Region at great cost from plants which u t i l i z e mineral sulfur 47 Yu. IP. Zolotarev: op. c i t . t Vestnik Moskovskogo Uni-versiteta. Seriya Geografiya, No. 3, 1963, p. 25; Kh. Markar-yan; op. c i t . . Pianovoye Khozyaystvo, No.9, 1963, p. 78. 48 L. Kochetov _et a l : "Bol'shaya khimiye i mezhotras-levoye kombinirovaniye v promyshlennosti," Voprosy Ekonomiki, No. 1, 1964, p. 21. 149. 49 and pyrite and operate at considerable def i c i t s . A massive petrochemical industry along the Volga w i l l require great amounts of both electricity and steam. Favouring multi-purpose projects, Russian planners feel that large thermal electric centers (TETs's) used with excellent results for space heating in many large ci t i e s of the country, would provide both steam and electricity in the most economic manner. (Although at present the Volga is the third largest producer of ele c t r i c i t y in the USSR, most of this is generated by hydro stations.) Due to the merely moderate resources of natural gas, however, the substantial increase in fuel consumption— resulting from the construction of new TETs's— would have to be met by the more expensive fuel o i l , which however, is needed throughout the 50 country. The production of ammonia and urea, of which the region consumes a twelfth to a tenth of the nation's total, would also have to start soon, since these f e r t i l i z e r s are very expensive to transport. This, too, w i l l increase the strain on the gas resources of the Volga. 49 See footnote 44 and Yu. E. Zolotarev: op. c i t . , Vestnik Moskovskogo Universiteta, Seriya Geografiya, No. 3, 1963, p. 25; L. Kochetkov et a l ; op. c i t . , Voprosy Ekonomiki, No. 1, 1964, p. 20; R. Sheyenko: op. c i t . , Ekonomicheskiye Nauki, No. 1, 1964, p. 9. 50 N. Nekrasov: op. c i t . , Voprosy Ekonomiki, No. 3, 1964, p. 31-32. 15G. THE TRANSCAUCASUS Despite occasional gestures to the contrary, the non-Slavic republics of the Transcaucasus have remained largely outside the mainstream of Soviet economic l i f e . The only ex-ception i s Baku, where the oil-extracting and refining indus-tries have continued to be important. Outside Baku, however, l i t t l e industrial development has taken place, and the most notable one, the construction of the iron and steel work at Rustavi, proved to be an economic failure. It i s not surprising, therefore, that notwithstanding the relatively large population (lOjr million), half of which 51 is urban, fuel consumption in the Transcaucasus i s very limited, amounting to less than 3 percent of the country's 52 total in 1960. In spite of the presence of rich hydrocarbon resources, fuel o i l and natural gas have satisfied only a part of this.limited fuel need - a l i t t l e over two-thirds in 1958 and some four-fifths in 1960. While negligible in Azerbaydzhan, expensive coal-- mainly from Georgia, but also from the Donets— has played an important role in the fuel mix of the other two 53 republics. Neither i s the use of fuel o i l as advantageous as 51 Narodnoye Khozyaistvo SSSR v 1962 g. p. 23-24. 52 "Statisticheskiye Materialy," Vestnik S t a t i s t i k i , No. 5, 1962, p. 91. 53 D.I. Maslakov: op. c i t . , p. 159 and Vestnik, Statis-t i k i , No. 5, 1962, p. 87. There is considerable discrepancy, too large for a two-year interval, regarding the share of coal in the fuel mix of the Transcaucasus. In a l l probability, i t is caused by different allocation of fuel consumption among the three republics. T H E T R A N S C A U C A S U S 152, i t seems at f i r s t glance, since much of i t is "imported" over long distances from the Volga. The high quality Baku crudes are more needed for the manufacturing of benzine, li g r o i n and high-octane gasoline, and what fuel o i l i s produced i s generally 54 sent to the Urals, the Ukraine and Leningrad. Under these circumstances, a sharp increase in the con-sumption of natural gas i s planned in a l l three republics in order to reduce the share of coal and "imported" fuel o i l in the energy-mix. The increase i s most marked in Georgia and Armenia, which have no resources of natural gas and have to bring i t in from Azerbaydzhan and the North Caucasus. In 1963, Armenia received 800 million cubic meters of gas, which was to be raised (LPG supplies included) to 2-g- b i l l i o n by the end of 55 1965. The plan for Georgia i s probably less, since the Republic v / i l l continue to exploit i t s coal deposits. Part of that gas w i l l have to come from the North Caucasus, since the capacity of the Karadag-Tbilisi-Yerevan pipeline-- which has only one compressor station at i t s point of o r i g i n — i s today limited to 56 1.8 b i l l i o n cubic meters. The share of gas in the fuel mix of Azerbaydzhan exceeded 80 percent in 1960, while three years 54 Geograficheskiye Problemy Krupnykh Rayonov SSSR, p. 272, footnote 2. 55 I. G. Papiyev: "Perspectivy razvitiya g a z i f i k a t s i i Armeniya," Gazovaya Promyshlennost'. No. 1, 1963, p. 24. 56 S. Yukhanonov: "Opyt ekspluatatsii gazoprovodov Zakavkazya," Gazovoye Delo, No. 9, 1963, p. 20. 153. 57 later i t reached 35 percent in Armenia. According to plan, natural gas i s to supply 60 percent of a l l fuel consumed in 58 the Transcaucasus by the end of the present year. Such intensive u t i l i z a t i o n , however, is out of pro-portion to the reserves of the region which are very moderate in size. At the present rate of production, the reserves of 59 the Transcaucasus w i l l be exhausted within 8 years. It is significant that output from gas wells actually declined be-tween 1961 and 1964, and only by a substantial increase in 60 the production of oil-well gases was the loss compensated. Unlike the Volga region, Azerbaydzhan today uti l i z e s over four-61 f i f t h s of i t s o i l well gases: thus any further increase in their production i s tied to an increase of petroleum output, which, however, i s relatively stationary, owing to long ex-ploitation. Despite the marginal nature of the region, gas "import" to the Transcaucasus i s now necessary. The d i f f i c u l t pipeline built in 1963 across the Great Caucasus (Ordzhonikidze-Tbilisi) 57 I. G. Papiyev: op. c i t . , Gazovaya Promyshlennost', Ho. 1, 1963, p. 24 and Geograficheskiye Problemy, p.271. 58 Ibid., TJ. 272. 59 Yu. I. Bokserman: op. c i t . , p. 28-29. 60 Ibid., p. 5, Table 2 and Promyshlennost1 SSSR, 1963, p. 217. 61 E. Alikhanov: "Khimiya Azerbaydzhana,11 Planovoye  Khozvavstvo. Ho. 3, 1964, p.19. 154. i s capable of transporting 1.6 b i l l i o n cubic meters at present, 62 and this amount can be raised to two b i l l i o n later on. In the more distant future, the "import0 of gas across the Caspian from Central Asia i s a possibility. Some, s t i l l vague, studies have been made to that effect, but the technical and economic 63 problems are many. An important feature of gas-consumption in the Trans-caucasus i s that notwithstanding i t s relative scarcity, gas is extensively used in power stations. As mentioned, o i l is both too expensive and of high quality to be burnt as boiler fuel, and coal reserves are also inadequate. Thermal elec-t r i c i t y , generated by natural gas i s especially important in Azerbaydzhan where hydroplants produce less than 30 percent of 64 electric power. A number of new thermal plants that use mainly gas are now completed or under construction, hot only in Azer-baydzhan, but also in the other republics which rely on water power, (e.g. Ali-Bayramiinsk— capacity 300,000 kw, Yerevan TET* s — capacity 550,000 kw, Razdansk TETs— capacity 100,000 65 kw, Kirovakan, Rustavi and Leninakan) As yet electrical out-62 Yu. I. Bokserman: op. c i t . , p. 123. 63 V.A. Shelest et a l : "Akademiya Nauk SSSR and Gosplan SSR," Problemy Razvitiya i Razmesheheniya Elektroenergetiki v  Sredney A z i i , Izdatel'stvo "Nauka", Moskva, 1964, p.175-180. 64 D.G. Zhimerin: Istoriya E l e k t r i f i k a t s i i SSSR. p.425.. 65 A.. Babakanyan: "The Present and Future of the Electric Power Industry in Armenia," Kommunist Armanniya, Nov. 15, 1963, p.2. Trans, in US JPRS 23654, March 12, 1964, p. 34; and S. Yukhanonov: op. c i t . , Gazovoye Delo, No. 9, 1963, p. 23. 155. put per capita in the Transcaucasus is well below the national 66 67 ... average, and because of the very rapid population growth the extention of generating capacity is necessary. The increas-ing use of gas in electric stations, therefore, seems inevitable even with the continued effort to harness the large hydro-potentials of the region. (This may be obviated however, by 68 transmission of electricity from Central Asia.) Conditions for the developing petrochemical industry may be compared to those of the Mid-Volga region. A l l three prin-cipal raw materials-- oil-well gases, refinery gases and liquid refinery products-- are present in relative abundance, to which the condensates of Karadag should also be added. As in the Middle Volga-- but to a far greater extent— the strain on gas reserves may create fuel problems for the industry. The use of fuel o i l for the production of steam and electricity is far less economic in Azerbaydzhan, since Baku crudes are five times as 69 expensive as crudes from Kuybyshev Oblasts. As petrochemical raw materials, oil-well gases in Azerbaydzhan probably do not have the same advantage over liquid refinery products as in the Volga (see Table X I I I , p. 146). 66 Promyshlennost' SSSR, 1963, p. 235. 67 Narodnoye Khozyaistvo SSSR v 1962 g., p. 9. 68 V. A. Shelest et a l : op. c i t . , (Akad. Nauk SSSR), p. 177-78. 69 Geograficheskiye Problemy, p. 270, footnote 5. 156. The reason for this assumption l i e s in the fine quality of Baku crudes and in the cost and composition of o i l well gases. Despite the high extraction cost, most refinery products— including the light benzine fractions, which are the chief petroleum-based feedstocks of the chemical industry— are considerably cheaper to manufacture from Baku oil s than from 70 those of the Volga. At the same time, the oil-well gases of Azerbaydzhan must be much more expensive than those of the Mid-Volga, since their cost depends directly on the extraction cost of crude petroleum. Finally, they are much less rich in pro-pane and butane than the gases of the other region (see Table V, Chapter II, p. 40). It appears, therefore, that the use of liquid refinery products in Azerbaydzhan i s at least as econ-omic as the use of wet natural gas, and the greater portion of the emerging petrochemical industry seems to be oriented to the huge refinery complex of the Apsheron Peninsula, s t i l l the la r -gest of the USSR. The use of both raw materials, however, w i l l be ultimately handicapped by the relative shortage of fuel -natural gas - and by scarcity of water. 70 Referativnyy Zhurnal, Ko. 2, 1964, E70 157 > S U M M A R Y The three regions in this chapter differ significantly from those of the previous one. F i r s t , they a l l are producers of natural gas and second, they are a l l affluent in other sources of fuel, although only in the Volga can the r i v a l fuel be called reasonably cheap. Only in the f i r s t two regions are reserves large enough to allow "exports" to other areas and such exports from the Volga are relatively modest. The deposits of the Transcaucasus are small and barely enable the region to supply i t s own needs even at the risk of early depletion. In the Volga and the Transcaucasus, the two principal o i l producing areas of the USSR, natural gas takes a much greater share in the energy supply than i t s reserves would warrant. Being the less versatile of the two hydrocarbon fuels, and the one more expensive to transport, gas is called upon to free petroleum products for use in other regions and for suprareg-ional consumption. (Roughly half of a l l petroleum i s used by transport, agriculture and the military). This i s especially true of the Transcaucasus, where— owing to the fine quality of the crudes— relatively l i t t l e fuel o i l is produced by the refineries, and what i s produced is sent out of the region. The relative abundance of wet natural gas in both these areas makes them attractive to the s t i l l embryonic but develop-ing petrochemical industry. However, fuel (and water) shortage w i l l probably limit expansion in the Baku area, while in the Volga Region a greater reliance on fuel o i l (more expensive 158. than natural gas) for thermal energy may become necessary. Despite the far greater resources of natural gas in the Greater Ukraine, this fuel contributes much less to the region-al energy balance— both in the eastern and western parts of the region— than in the Volga and the Transcaucasus. The Eastern Ukraine i s the largest coal producer in the country and a citadel of ferrous metallurgy. Coal here i s king and w i l l l i k e l y remain so. The largely rural Western Ukraine which also contains a small but important coal-basin, "exports" the greater part of i t s gas output to s t i l l poorer areas. 159. Chapter VII PRODUCING REGIONS 160. THE NORTH CAUCASUS The economic region of the North Caucasus includes the lands between the Lower Don and the crest of the Great Caucasus mountain chain. The industrial complex of the Don mouth and of the Russian portion of the Donets Basin - though o f f i c i a l l y part of the region, have been excluded here, since they are intimately tied to the Eastern Ukraine and have similar economies. The North Caucasus i s s t i l l predominantly rural and agri-cultural: only some 40 percent of i t s ten and a half million people live in c i t i e s , and i t has much fewer industrial workers 1 per total population than the national average. The population resource i s very much underutilized. Industry is entirely lacking in many of the smaller cit i e s and i s insufficiently dev-2 eloped or imbalanced in the larger ones. Almost as a symbol to such an imbalance one may cite an oversized petroleum refinery industry - too large both for the local o i l fields and for the 3 region's capacity to consume and work up i t s products. 1 Promyshlennost' SSSR, 1957, p. 23-4 and Narodnoye  Khozyaystvo RSPSR, 1957, p. 11-47. Quoted from Cole and German, op. c i t . , p. 238-39. Data refers to 1955. However, Narodnoye  Khozyaystvo RSPSR 1962, p. 54-59, indicates that industrial growth in the North Caucasus has been rather slow over the last decade, and thus the number of industrial workers per total population in 1962 could not have been much different. 2 Geograficheskiye Problemy, p. 263. 3 Ibid: p. 242. Map 13 161 T H E N O R T H C A U C A S U S A Gas field • Oil field Gas pipeline Gas pipeline (under construction) Oil pipeline $ Hydroelectric station • Thermal station ® Gas processing plant lii Petrochemical plant $ Petrochemical plant (under construction) 0 Oil refinery Scale: I cm. 6 0 km. 162. This somewhat lopsided and insufficiently developed region i s an old, hut now relatively unimportant, producer of petroleum, with small and hardly increasing output. However, i t was dramatically rejuvenated in the early f i f t i e s by the sudden discovery of very large quantities of natural gas. It i s now the greatest storehouse of gas in the European USSR, whose reserves in the A B (i.e. "proved recoverable"), though not in less tangible, category s t i l l exceeds those of Central Asia. In 1963, the North Caucasus produced 26.4 b i l l i o n cubic meters from gas wells - nearly 30 percent of the country's 4 total - and perhaps an additional 900 million cubic meters 5 from o i l wells. Together with i t s crude o i l output (around 6 8 million tons) the region accounts for over 5 percent of the 7 total fuel production of the USSR. Only about a f i f t h of the gas produced i s consumed within 8 the North Caucasus, the rest is sent out through Rostov and the 4 N.I. Novikov: op. c i t . , Gazovoye Delo, No.5, 1963, p.10. 5 Estimated by assuming the same gas-oil ratio as in Azerbaydzhan, where o i l fields are in similar depth and have been exploited for about the same length of time. For data on o i l production in the North Caucasus see Footnote 6. 6 D.B. Shimkin: op. c i t . , p. 90, Table XIV. Latest data available i s for 1956, given as approximately 6.7 million tons. Latest precise figure i s for 1955 - 6,452,000 tons. Production in 1963 i s unlikely to have been much over 8 million tons, judg-ing from the rate of growth since 1937. 7 The conversion rates are explained in footnote 30, p.140, Chapter VI. Total fuel production in 1963: Promyshlennost' SSSR, 1963, p. 191. 8 A.L. Kozlov et a l : "Ekonomicheskiy analiz razrabotki Severo-Stavropol'skogo mestorozhdeniya," Gazovaya Promyshlennost', No. 11, 1963, p. 5 and Neftyanoye Khozyaistvo. Feb. 1962, p. Above sources give amount of gas transported from the North Caucasus. Latter source for Krasnodar Kray gives only daily "export". From the amount remaining, the quantity estimated to go to the Lower Don area was subtracted. 163. Donets Basin to the Central Region and Leningrad. An unknown hut small portion i s carried over the Caucasus Range to Georgia and Armenia. The North Caucasus, therefore, i s a gas exporting region par excellence. As such, i t differs from the other chief producers of European Russia, the Ukraine and the Volga, which consume the major part of their output. At least until now, the cost of production in Stavropol' Kray was the lowest in the USSR - being 5 rubles or 2.5 times 9 lower per 1000 cubic meters than the average for the USSR. (Eor more detail, see page 197). This advantage, however, seems to be coming to an end due to the rapid diminishing of pressure in the large North-Stavropol' f i e l d , which accounts for prac-t i c a l l y a l l the output of the Kray. Always f a i r l y low, due to the large extent of the f i e l d , the pressure w i l l drop to a mere 12 atmospheres-- less than a f i f t h of the o r i g i n a l — by the end of the decade. Already, the gas must be pumped out of the de-posit, requiring the setting up of a large number of compressors 10 at the wells. It is certain to add appreciably to the cost of production. By the beginning of 1963, over 41 b i l l i o n cubic meters were taken out of the f i e l d amounting to 18 percent of the original reserve. Output in that year reached 13 b i l l i o n . Such rate, i t i s supposed can be maintained for another 8 to 11 10 years. 9 A.L. Kozlov et a l : op. c i t . , Gazovaya Promyshlennost', No. 11, 1963, p. 6. 10 Ibid., p. 8-9. 11 Ibid., p. 6. 164. The deposits of Krasnodar Kray on the "western part of the North Caucasus are the largest producers of condensates in the USSR. Though s t i l l only partly removed from the gas, out-put increased nearly tenfold between 1958 and 1961, from a merer 15,000 to 138,700 tons. The plan calls for 720,000 tons by 1965 Krasnodar Kray can boast a wide variety of petrochemical raw materials. In addition to the increasing volume of conden-sates— composed of aromatic and naphtenic hydrocarbons up to 13 50 - 60 percent — i t s gases are f a i r l y rich in the ethane to penthane fractions (see Table V, p. 40). Besides gas-derived feedstocks, however, refinery products are also available in large quantities, since the North Caucasus contains a large share of the refining capacity of the country. Yet the region*s proximity to Rostov and the Donbass does not bode well for the North Caucasus as a future center of organic synthesis. Up to four-fifths of the production of gas in Krasnodar Kray, for instance, i s accounted for by the Northern border region of the 14 Kray, within 150 kilometers from Rostov. The cost of trans-porting natural gas and LPG i s more than offset by the market advantages of the Lower Don-Donbass area, which, in addition, 12 Trud, Oct. 12, 1961 and V. T. Borisov: op. c i t . . Gazovoye Delo. No. 10, 1963, p. 68. 13 Trud, Oct. 12, 1961 and Gazovaya Promyshlennost', No. 4, 1964, p. 4. 14 N. K. Baybakov and V. A. Bragin: "Razvitiye i tekhnich-eskiy progress gazovoy promyshlennosti Krasnodarskogo Kraya," Gazovoye Delo, No. 6-7, 1963, p. 3. 165. already has a small-size chemical industry "based on coal. When Soviet planners talk about developing an organic petrochemical industry in the North Caucasus, i t i s the Lower Don and Russian Donbass to which they generally refer. The present organic capacity of the region is linked more with the refineries, especially with the one at Groanyy where a 15 very large chemical plant has been recently completed. In a l l probability, however, the plant burns natural gas to supply i t s fuel and energy needs. Without f a i l , gas w i l l be used on a large scale for the manufacturing of ammonia and i t s deriva-tives since the North Caucasus consumes perhaps a twelfth of a l l 16 n i t r i c f e r t i l i z e r s in the USSR. Ammonia production i s to be based on the partial combustion method, which also yields an appreciable amount of acetylene. Then, via acetylene, gas w i l l be used also as organic feedstock. This combination i s most like l y to apply to Stavropol'Kray, where gases are exceedingly dry. It i s here, too, that the construction of a carbon black 17 plant has started, although the production of that chemical from natural gas i s a rather wasteful process. It must be men-tioned that these plans for petrochemical developments may be curtailed by the water problem. The rivers of the North Caucasus 15 Ekonomicheskaya Gazeta, Oct. 30, 1961, p. 11. 16 N. Nekrasov: op. c i t . , Planovoye Khozyaistvo, No. 8, 1964, p. 9. 17 Geograficheskiye Problemy, p. 243. 166. are very greatly mineralized, containing an exceedingly high 18 concentration of calcium and magnesium. While this is no dis-advantage when used for cooling purposes, the high mineral con-tent makes these waters unsuitable for use in chemical proces-sing (e.g. hydration) without previous treatment. The cost of purification, however, may prove too great. Aside from the above mentioned chemical industries, natural gas i s unlikely to attract manufacturing to the area . because of proximity to the industrialized Eastern Ukraine. Agriculture contributes over a third of a l l production in the region and much of the manufacturing consists of food processing 19 and agricultural machine building. Here natural gas as fuel already seems to play an important role, though total consump-tion by these industries i s not large. Probably more important as a consumer i s the huge oil-refining industry of the region, concentrated at Groznyy and Krasnodar. A pipeline connects Groznyy with the large deposit of North-Stavropol*, but— in addition to dry gas-- both refinery complexes have oil-well gases available to them from near-by o i l - f i e l d s . 18 A. A. Sokolov: Gidrografiya SSSR. Gidrometeoizdat, Leningrad, 1964, p. 174-75. 19 Geograficheskiye Problemy .... p. 238 and Atlas SSSR (1962), p. 128-9. 167. CENTRAL ASIA Central Asia was the last major addition to the Russian Empire and, even more than the Transcaucasus, has remained out-side the mainstream of economic l i f e . Its ties with the Slavic core land of Russia has "been essentially colonial down to the present day. A few staple crops, marketed in European Russia, has formed the mainstay of the economy, and though the region can now boast a range of consumer industries, nearly a l l capital goods must s t i l l be supplied from more developed areas. Combined profits from the industries of the Uzbek, Kirgiz, Tadzhik and Turkmen SSR's represented in 1962 less than three percent of 20 the total industrial revenue of the USSR. Central Asia here includes the four Mid-Asian Republics plus that portion of Kazakhstan which l i e s south of the desert belt. This region contains 20 million people, of which only 21 seven and one-half million live in c i t i e s . Despite the large population (nine percent that of the country), Central Asia accounts for a mere 3.2 percent of the fuel consumption of the 22 USSR. It is far behind the rest of Russia in the production 20 Promyshlennost1 SSSR, Moskva 1963, p. 99. 21 Narodnoye Khozyaistvo SSSR v 1962 a., p. 23-24. Of the Kazakh SSR, only Alma Ata Oblast and the Southern Kazakh Kray was included, since the rest of Kazakhstan does not form part of Central Asia. 22 "Statisticheskiye Materialy," Vestnik S t a t i s t i k i , No.5, 1962, p. 91, Puel consumption for Central Asia, excluding Southern Kazakhstan, was given as 2.4 percent. To calculate fuel consump-tion in Southern Kazakhstan, the same relationship was assumed to hold between population and energy consumption as in the four Central Asian Republics. M I D D L E A S I A O i l f ield B i t u m i n o u s c o a l L i g n i t e H y d r o e l e c t r i c s t a t i o n H y d r o e l e c t r i c ^ a t i o n ^ u ^ r . ^ j T h e r m a l s t a t i o n P e t r o c h e m i c a l p l a n t O G a s p i p e l i n e G a s p i p e l i n e (under c o n s t r u c t i o n ) •O- G a s p i p e l i n e ( p r o p o s e d ) Scale. I cm, 100 km, 168. and consumption of el e c t r i c i t y : i t produces l i t t l e over a third per capita than the average for the USSR and, as the region s t i l l 23 has separate grids, there i s no "import" from other areas. This s t i l l backward region has a variety of fuel resources, but none of them amounted to very much until the end of the last decade. Its coal-fields are small, and— with the exception of Angrensk l i g n i t e , which can be quarried— are d i f f i c u l t to mine. The presence of o i l has long been known and the outlook is en-couraging, but prospecting was not yet rewarded with any spec-tacular find. The late f i f t i e s , however, saw the discovery of very large amounts of natural gas, and the prospects for further strikes are excellent. "Proved recoverable" reserves in Central Asia now almost match those in the North Caucasus, but prospec-tive resources are far in excess. Though i t i s natural gas which dominates the fuel resources of Central Asia, output i s not yet large. In 1963 less than 3.4 b i l l i o n cubic meters were produced, and the plan for 1965 24 calls for 19 b i l l i o n . Gas supplied less than a f i f t h of the fuel consumed in 1962 and w i l l supply less than half (47^) even in 1965. Coal i s s t i l l important and w i l l remain so, with 25 shares of one-half and one-third — in the above years. Only 23 Narodnoye Khozyaystvo SSSR v 1962 g.. op. c i t . , p. 95. 24 Promyshlennost1 SSSR. 1963, p. 215; A.N. Rudin: "Gazo-vaya promyshlennost1 Sredney A z i i , " Gazovoye Delo, No. 1, 1963, p. 4. 25 Referativnyy Zhurnal, No. 12, 1963, E131. 169. a fraction of the gas produced in Middle Asia i s to be used at home. Practically the entire output of the giant Gazli f i e l d i s to be sent to the Urals, which means that the needs of Central Asia w i l l have to be met from the much smaller Mubarek fields in 26 Uzbekistan and from other scattered deposits. Less than nine b i l l i o n cubic meters per year is planned to be consumed in the region after 1965, but small though this amount i s in view of the large population, i t may not be available unless reserves 27 in the A B category are expanded. Despite the excellent prospects for further discovery in Central Asia, the amount of d r i l l i n g done is very inadequate and in Uzbekistan has been actually declining since 1959. Prom 1959 to 1962 (inclusive) Uzbekistan received five percent of the to-t a l amount of d r i l l i n g for gas in the USSR; in 1962 i t received less than two percent. While there was probably an increase in d r i l l i n g in Turkmenia, the total amount for gas (not oil) is certain to have been less than in Uzbekistan. Since this region is the most promising of a l l areas in the USSR, this is an astonishingly small share. (See Table XIV below). The future plans for gas production in Central Asia are very ambitious. Besides i t s own needs, the region i s supposed to send around 44 b i l l i o n cubic meters annually to other regions of the country, mainly to the Urals and the mining complexes of 26 I. Mints: "Ispol 1zovaniye prirodnogo gaza v Uzbeki-stane...," Gazovoye Delo, No. 1, 1963, p. 54. 27 Ibid., p. 54; A. N. Rudin: op. c i t . , Gazovoye Delo, No. 1, 1963, p. 4. 170. 28 Northern Kazakhstan, after 1970. It i s abundantly clear, however, that there is no hope of f u l f i l l i n g that plan without a radical change in the practice of prospecting. It is also clear that whether f u l f i l l e d or not, Middle Asia w i l l be produc-ing mainly for the benefits of more v i t a l and economically better developed areas. Table XIV D r i l l i n g for gas and increase of reserves in the Uzbek SSR and in the USSR as a whole Uzbek SSR USSR K D r i l l i n g footage Increase of D r i l l i n g Increase of Year (1000 meters) A B reser- footage A B reser-ves ( b i l l . (1000 v e s . ( b i l l . cu.m.) meters) cu.meters) 1959 86.5 293.3 931.0 737.1 1960 92.2 58.5 1094.0 187.7 1961 65.4 17.4 160.1 1962 29.2 19.9 1617.7 JS£- -72.8 1959-62 (inclusive) 273.3 349.3 5168.1 1012.1 & Increase calculated by subtracting A B reserves at the beginning of each year from the ones given for the following year. ML It seems that the amount produced each year i s sub-tracted from the reserves. Output in 1962 was 73.5 b i l l i o n cubic meters. This means there was practically no addition to reserves in that year. Sources: Yu. I. Bokserman: op. c i t . , p. 17, 19 and 45; and M. M. Brenner: Ekonomika Neftyanoy Promyshlennosti SSSR, 1962, p. 83. Though gas from gas-wells dominate the reserves of Central Asia, one should not forget that a certain amount of natural gas 28 Yu. I. Bokserman: op. c i t . , p. 307. 171. i s also available from o i l wells. The Nebit Dag region produces almost a third as much o i l as Azerbaydzhan and about a b i l l i o n cubic meters of gas is released in the course of petroleum pro-duction. Roughly four-fifths of that gas, however, is vented into the atmosphere, suggesting a rate of u t i l i z a t i o n which is 29 lowest in the USSR. Because of the rapidly growing population, the extension of power-producing capacity i s imperative. It is especially important in Uzbekistan, which contains half the population of Central Asia and accounts for half the industrial and some two-30 thirds of agricultural electricity consumption in the region. Although the share of hydro in the ele c t r i c i t y production of 31 Middle Asia i s very high (over one-half) , and the giant Nurek station now under construction w i l l guarantee that i t w i l l re-main so, several new thermal stations are being built today which w i l l doubtlessly increase the share of thermal e l e c t r i -city. Up to now, natural gas produced less than a tenth of a l l thermal electricity in the region, three-quarters of which was generated by coal. (See table below.) 29 B. Obezov: "Za kompleksnoye Razvitiye khimii," Partiynaya Zhirn*. No. 16, 1963, p. 10 ; Promyshlennost* SSSR. 1963. p. 207 and 215. 30 Narodnoye Khozyaystvo v 1962 g., p. 23-24 and V. A. Shelest ot a l , op. c i t . . p. 65. Uzbekistan and Tadzhikistan jointly account for about 90 percent of the electricity con-sumed by agriculture in Middle Asia. The share of Uzbekistan, therefore, must be at least two-thirds. 31 Ibid., (V. A. Shelest, et a l ) , p. 23. 172. Table XV Fuel consumption by thermal stations in Central Asia Fuel Central Asia (without .Southern Kazakhstan) Of which: Uzbek SSR Kirgiz SSR Tadzhik SSR Turkmen SSR Natural state: Coal (1000 ton) 2836.6 2531.9 114.1 190.3 0.3 Liquid fuel (1000 ton) Gas (mill.cu. meters) 240.5 172.5 3.2 95.9 9.2 0.1 228.0 76.6 Converted to nominal fuel (1000 tons) 2114.5 1517.3 81.0 106.5 409.7 Coal 1584.2 1410.0 67.8 106.3 0.1 Liquid fuel 333.6 5.0 13.2 0.2 315.2 Gas 196.7 102.3 94.4 As percentages 100.0 100.0 100.0 100.0 100.0 Coal 75.0 92.9 83.6 99.8 Liquid fuel 15.7 0.3 16.4 0.2 76.9 Gas 9.3 6.8 23.1 Source: V.A. Shelest et a l , (Akad. Nauk), op.cit., p. 185. Several new power plants are now under construction (e.g. at Tashkent, Navoinsk, Bukhara, Dzhambul, Ashkhabad, Dushanbe and Krasnovodsk) and though some of these are rather small, they w i l l appreciably increase the share of gas in the fuel mix of electric 173. 32 stations. A very long range and somewhat visionary plan en-visages an incredible expansion of generating capacity, based mainly on natural gas as fuel and with the power marketed mostly 33 in European Russia and the Urals. The magnitude of such expan-sion (an almost 30-fold increase in fuel consumption by power plants over what may be a 20 year period) i s open to question, and the recent trend against the use of gas as boiler fuel must also be considered. What is significant, however, is that even in such long range plans, Middle Asia is considered primarily as a source of energy for other regions, and i t is possible that much of this energy w i l l leave the area in the form of el e c t r i c i t y . A broadening of the industrial base in Central Asia would unquestionably result in increased consumption of natural gas. A development of two industries -- both heavy consumers of gas— is imminent in the near future. These are the building mater-i a l s and the chemical industries, especially the production of f e r t i l i z e r s . None of the four Republics, for instance, are able to meet their need for cement: the Tadzhik and Turkmen SSR's produce less than half of vfhat they consume, the Kirgiz SSR less than a tenth and demand i s not fu l l y satisfied even in Uzbekistan. The whole region has but seven cement plants, and outside 32 Izvestiya, Nov. 4, 1962; D.O. Zhimerin: op. c i t . , p. 418 and 429; Pravda Vostoka, Oct. 10, 1962, quoted from US JPRS, 16843, p. 46; N.P. Mun'ko: op. c i t . , p. 124. 33 V. A. Shelest et a l , op.' c i t . , p. 172-75, 184, and p. 187, Table 32. 174. Uzbekistan (where the distance is only 600 km.), the average distance for the transport of cement i s over 1000 km., exceed-34 ing 1200 km. in the Kirgiz SSR. More factories are planned in the region to reduce these monstrous hauls. As the proportion of thermal energy used in the building material sector i s very high, reaching nine-tenths of the total use of energy in some 35 cases, the construction of such plants would appreciably in-crease the amount of gas consumed in Middle Asia, especially since no other fuel in the area i s able to provide heat at low enough cost. Even more important would be the development of the chem-i c a l industry, and a significant increase at least in the prod-uction of f e r t i l i z e r s i s definitely decided on. It i s for n i t r i c f e r t i l i z e r s - - for which natural gas is the cheapest raw material — that Middle Asia has the greatest need on account of inten-sive cotton cultivation. Today the four Mid-Asian Republics account for twelve percent of the consumption of ammonia-based f e r t i l i z e r s and Southern Kazakhstan perhaps for another two percent. (Kazakhstan, as a whole, consumes five percent. The 36 exact share of Southern Kazakhstan is impossible to ascertain.) 34 Ibid., p. 55-56. 35 U.N. Economic Commission for Europe: Evaluation of  Recent Developments in the European Gas Economy, Geneva, 1962, p. 50. 36 N. Nekrasov: op. c i t . , Planovoye Khozyaystvo. No. 8, 1964, p. 9; V.A. Shelest (op. c i t . , p. 58) claims about 50 percent for the four Middle Asian Republics, but this i s ob-viously a mistake. 175. Only in Uzbekistan are f e r t i l i z e r s produced on more than a very minor scale, and the Kirgiz and Tadzhik Republics do not produce them at a l l . The output of n i t r i c f e r t i l i z e r s cannot be determined but the output of n i t r i c and phosphorous f e r t i l i z e r s combined (potassium f e r t i l i z e r s are not produced and hardly consumed in Central Asia) in the four Republics amounts to l i t t l e 37 more than three percent of the national total. As a result these badly transportable products are shipped in from the Moscow Region, the Donbass, the Kuzbass and the Urals. Annual transport costs for the "import" of nitrogen f e r t i l i z e r s alone exceeds eight million rubles and i s more than double that amount 38 for a l l f e r t i l i z e r s . In view of the large market and reserves of natural gas, a sharp increase in the production of ammonia and i t s derivatives i s called for. Yet, in spite of frequent urging in the Soviet press, only two nitrogen f e r t i l i z e r plants are under construction today in Central Asia. (At Navoinsk and 39 at Fergana.) It is clear that in the current Seven Year Plan the devel-opment of the petrochemical industry in Middle Asia is very limited and i s entirely restricted to the production of f e r t i -37 Promyshlennost' SSSR, 1963, p. 142 and 145; V. Gitkovich: "Transportation problems of the chemical industry," Gudok, Nov. 13, 1963, p. 3, translated in US JPRS 23053, Peb. 4, 1964, p. 45-46; N. Nekrasov: op. c i t . , Planovoye Khozyaystvo, 1964, No. 8, p. 9. 38 Pravda, Jan. 5, 1964, p. 2; N. Alisov et a l : "Problemy razvitiya khimicheskoy promyshlennosti Sredney A z i i , " Planovoye  Khozyaystvo, 1964, No. 2, p. 49. 39 Ibid., (Pravda), p. 2. 176. 40 l i z e r s . Many authors in recent literature urge the creation of a large-scale organic petrochemical industry in the region for which both raw materials and cheap energy are available 41 in abundance. There are no serious plans for using the o i l -well gases of Hebit-Dag for organic synthesis and the industry would be based on a acetylene produced from natural gas. There is much to be said for such a course of action, especially since the production of acetylene can be combined with that of am-monia and i t s derivatives. Cost figures for such products, as methyl alcohol, vinyl acetate, vinyl chloride, acetate fibers, nitron, etc., are very favorable. (See Chapter IX, p. 211 and Appendix, Tables VIII-XII ). Two things, however, limit the potentialities of Central Asia for the petrochemical industry. The f i r s t i s the great water-shortage which also creates serious problems of waste disposal. Most petrochemical processes consume a prodigious amount of water and therefore are i l l - s u i t e d for Middle Asia, although the manufacturing of acetate fibers and of nitron is less restricted by high water-demand. The second i s the peri-pheral position of the region. Hot only is i t separated from the major consuming regions of the USSR by hundreds of miles of 40 Narodnoye Khozyaistvo Uzbekistana, Nov. 11, 1961, translated in US JPRS 12730, p. 15. 41 See for instance Ibid., p. 50; V.A. Shelest et a l , op. c i t . , p. 37-42; H. Pedorenko and A. Vayn: op. c i t . , Pianovoye  Khozyaystvo, Ho. 5, 1964, p26-32;H. Alisov & P. Grigor'yants: "Problemy razvitiya khimicheskoy promyshlennosti Sredney A z i i , " Planovoye Khozyaystvo, Ho. 2, 1964, p. 46. 177. desert and steppe but i t also l i e s off the main axis of pioneer development. In addition, i t i s s t i l l a predominantly non-Slavic area, whose people are the least integrated into Soviet economic l i f e . Nevertheless, the rapid growth of the already dense and very clustered population, which i s far from adequately u t i l -42 ized, w i l l probably cause a quickening of industrialization. Certain branches of the chemical industry, based on natural gas, could therefore, be expected to develop. Domestic needs, too, are very poorly supplied at present— even more poorly than, for instance, in the Baltic and Byelo-russia. At the beginning of 1963, less than 260 thousand quar-ters were served by gas in the four Republics of Middle Asia, 43 and two-thirds of these received i t in cylinders. That means that natural gas was available to less than a tenth of the popu-lation even i f six people are counted per quarter. (in view of the large families common in the area). The completion of the Middle-Asian pipeline network, w i l l undoubtedly bring this figure up. The construction of this network began at the same time as that of the Bukhara-Ural, but while the latter i s now being doubled, the former-- though much shorter and of smaller diameter— i s s t i l l far from finished. No better commentary is needed on the marginal position of Central Asia and the essentially "colonial" position of i t s gas industry. 42 Geograficheskiye Problemy, p. 487. 43 Gazovaya Promyshlennost', No. 10, 1963, p. 55. 178. S U M M A R Y As gas regions, the North Caucasus and Central Asia closely resemble each other. Each of them can boast roughly one-third of the country's proved recoverable reserves (A-+-B) and close to one-third of i t s balance reserves (A-f-B+Cj), a l -though Central Asia has much greater potential than i t s r i v a l . Owing to better location, the North Caucasus produces much more today. In t7i/o-three years, however, the two regions should draw equal and by the next decade Middle Asia w i l l probably have the larger output. Both regions are (or'will be) primarily "exporters" of natural gas and feed the two biggest pipeline systems of the Soviet Union. The North Caucasus (excluding the Lower Don Valley) consumes but a f i f t h of i t s output while Middle Asia w i l l have to be content with at most a quarter. A share much greater than three-fourths may leave Middle Asia i f more of the very large reserves, believed to exist in the region,are proved and brought into production. Expensive coal w i l l continue to supply a sig-nificant portion of fuel requirement in both regions to allow such "exports." Middle Asia and the Northern Caucasus are both predom-inantly agricultural areas and w i l l l i k e l y remain so. The pro-duction of f e r t i l i z e r s i s , therefore, the f i r s t industry to be attracted by the large scale resources of natural gas. In the future, Middle Asia may become an important producer of polymers for i t has cheap energy and a large labour force. Its marginal position and tight water balance, however, may limit such devel-179. opments despite very favorable projected production costs. In the North Caucasus, proximity to the industrial Rostov-Donets area and, i t seems, higher energy costs are the limiting factors, although the raw material base i s excellent. It seems certain that both regions w i l l continue to be suppliers of other prov-inces and only a small portion of their production w i l l be con-sumed at home. 180. Chapter VIII POTENTIAL REGION SIBERIA AND NORTHERN KAZAKHSTAN 181. Prom the Urals to the Pacific Ocean and from Lake Balkhash to the Arctic Sea, stretches a tract of land as large as Canada and Argentina combined.. The greater portion of i t is frozen •wasteland or otherwise unresponsive territory, but i t s south-western quarter forms the tapering eastern part of Russia's economic triangle. Into that funnel, ending at Lake Baykal, has poured perhaps a f i f t h of a l l investment since the Revolution, though much of that was channelled to one limited area, the 1 Kuznets Basin. Since 1950, however, this zone has been the scene of more intensive economic activity both in agriculture and in-dustry. The Virgin Land Program and the recent power develop-ments in the Yenissey-Angara region have gradually brought the whole area as far as Lake Baykal into the mainstream of Soviet economic l i f e . This long belt may be divided into two major regions. The western one embraces the southern portion of the West Sib-erian Lowland and the northern half of Kazakhstan, the eastern one extends from the Ob to Lake Baykal. (It includes Semipa-latinsk, Novosibirsk and the whole of the Kuzbass) The two regions have nearly equal population of between eleven and twelve mil-lion, but the latter is considerably more urbanized and contains -N. M. Budtolayev et a l : "Problemy ekonomicheskogo razvi-tiya Zapada i Vostoka Sovyetskogo Soyuza, Vestnik Moskovskogo  Universiteta, Seriya Geografiya. No. 4, 1963, p.8, Table 2. S O U T H E R N S I B E R I A A N D N O R T H - K A Z A K H S T A N -o- - o •o • • o-Gas f i e l d O i l f i e l d Coal f i e l d Coal mining (bituminous) Coal mining (brown coal) O i l p i pe l i ne - O i l p i pe l i ne (under const.) - Gas p i pe l i ne Gas p i p e l i n e (under construct ion) Gas p i p e l i n e (proposed) ^ Iron and s t e e l plant + Copper & n i c k e l smelting j£x Hydroe lec t r i c s ta t ion S^ S Hydroe lec t r i c s ta t ion Vunder construct ion) Thermal s ta t ion using coal ^ Thermal s t a t i on (under construct ion) 0* 184. 2 a greater number of large c i t i e s . West Siberia-Northern Kazakhstan (as delimited) accounts for 6 to 7 percent of total fuel consumption, Central Siberia 3 for over 10%. In the former region, the larger part of this is consumed by agriculture and food processing as only two c i t i e s , Omsk and Karaganda, are large centers of industx-y. In the l a t -ter region, on the other hand, most of the fuel consumption is accounted for by industry (including the generation of e l e c t r i -c i t y ) . 2 Narodnoye Khozyaystvo SSSR v 1962 g, p. 20-23 and 25-87. 3 Different methods of calculation yield f a i r l y close re-sults. Consumption in Central Siberia may he calculated from-coal and o i l consumption, the latter mainly estimate. 38$ of Kuzbass coal is used within the Kuznets-Novosibirsk region, while almost a l l the coal mined in East Siberia is used local-l y . 7000 Cal were assigned to 1 ton of Kuzbass and Irkutsk coal and 4000 Cal to 1 ton of Kansk-Achinsk coal. Similar result i s arrived at by allocating 80% of total fuel consump-tion in East Siberia (given in Vestnik Statistiki) to the area south of the Angara and west of Lake Baykal and adding to i t 38% of Kuzbass coal output (see above) and the estimated amount of petroleum consumption in.the Kuznets-Novosibirsk region. Fuel consumption in West Siberia-Northern Kazakhstan (as de-limited) may be calculated by adding to the total fuel con-sumption of Northern Kazakhstan the fuel consumption of West Siberia minus coal and o i l consumption in the Kuznets-Novosibirsk region (see above). Respective shares of Northern and Southern Kazakhstan are determined in Chapter 7, page 167, footnote 22. Sources used for calculations and estimates: Vestnik  S t a t i s t i k i , No. 5, 1962, p. 91; Narodnoye Khozyaystvo v 1961 g, p. 205; Pravda, 1964, Dec. 22 , p. 1 ; Ekonomicheskiye Rayo- nirovaniye i Narodnoye Khozyaystvo SSSR, Izdatel'stvo Mysl*, Moskva, 1964, p. 43, 63, 64; Geograficheskiye Problemy...., p. 388. 185. Tixe rest of Siberia and even the Far East are marginal areas, devoid of the bustling activity which characterizes the southern belt west of Lake Baykal. The vast expanse of land north of the Angara River and the Stanovoy Range (an area as large as the United States) contains but 1.3 million people, while Transbaykalia and the lands of the Amur (with Sakhalin Island) 4 have 1.8 and 3.9 million respectively. This enormous t e r r i -tory probably accounts for less than 5% of the country's fuel 5 consumption, and-- aside from a few isolated areas-- is devel-oping slower than the more crucial regions of Siberia. At present, natural gas plays no part in the fuel supply of Siberia and Northern Kazakhstan aside from f i e l d uses of some casing head gas in the Emba o i l fields and Sakhalin Island. This brief consideration and the foregoing regional "breakdown, therefore, serves only to help assess i t s possible future signi-ficance. The belt of land as far as Lake Baykal clearly rep-resents a huge market for energy. Its headlong growth and the continued emphasis given to i t mean that i t s share can only in-crease in the future. This i s particularly true of Central Siberia, which w i l l be considered f i r s t . Central Siberia What works against Central Siberia's becoming a major market for natural gas i s i t s distance from the present ( and -Narodnoye Khozyaystvo RSESR v 1962 g, p. 13-14. 5 Estimated from data in Vestnik S t a t i s t i k i , No.5, 1962, p. 91, and figures arrived at in footnote 3. 186. probably also future) supplying areas, coupled with opulence in other form.3 of energy. The region contains over half the acces-sible reserves of coal and over half the accessible water-power 6 potential of the Soviet Union. At the same time, i t has only negligible quantities of natural gas, and the known deposits of Siberia-- along the Lower Ob and in Yakutia— l i e very far away. (The former, in any case, are being linked to the econ-jomy of the Ural Region). In the larger, eastern half of Central Siberia, natural gas would have to compete with the cheapest coal of the USSR. More than half of the region's coal resources by weight (55$) and close to half by ca l o r i f i c content are found in the con-veniently located Kansk-Achinsk Basin, extending along the Trans-Siberian railway east and west of Krasnoyarsk. Here ex-traction costs from large open-cast mines are as low as 0.50 to 0.70 rubles, or 1.10 to 1.50 rubles per ton of nominal fuel (7000 Cal). As Table VII, p. 70 shows, the transport cost of natural gas-- converted to tons of nominal fuel-- over a dis-tance of 1000 km i s 1,62 rubles per ton, even without capital charges. This means that from Achinsk to Irkutsk (where coal again can be quarried, though at a somewhat higher cost), nat-ural gas would be more expensive unless found locally. -D. J. Hooson; op. c i t . , p. 102. 7 Geograficheskiye Problemy.... p. 388. 187. As discussed in Chapter III, the Angara-Lena Downwarp i s partially within the Central Siberian Region and holds promise for gas finds. Any sizable deposit found here w i l l doubtlessly be exploited. However, as the region is already saturated with cheap energy, far beyond i t s capacity to use i t , there appears no urgency for such an additional resource. Any discovery w i l l l i k e l y be the result of prospecting for o i l rather than gas, for the former is a much more indispensable material owing to i t s diverse uses. If gas is found, i t s three most li k e l y consumers w i l l be the household sector, the chemical and machine building i n -dustries, though even here-- with the possible exception of machine bui l d i n g — the lack of gas is no serious hindrance. Space-heating in the fast-growing ci t i e s is carried on by large TETs's, which presently account for about one-third of the total 8 installed thermal capacity of the region. The culinary needs of households in the cities are easily supplied by electricity, of which the region produces far more than i t can presently use. As for the chemical industry, natural gas would be used chiefly as raw material, not as fuel. As cost figures in Chapter IK, p. 211 and Appendix, Tables 8-12 show, organic syn-thesis via acetylene— produced by the electric cracking of methane is indeed competitive in this region. However, i f the search for local supplies of o i l i s substantiated( and the recent Markovo strike is very promising), obviating the imports of crude _ Referativiny Zhurnal, 1964, No. 3, E44. 188. from the Volga, refinery liquids w i l l prove to he a cheaper source of raw material for organic petrochemicals than natural gas. Even with Bashkir crude, the cracking of petroleum emul-sion is thought to he very cheap. (Chapter IX, Table XXIII, p. 213) The future position of gas in the Kuzbass-E'ovosibirsk area i s much more favourable. Kuznets coal-- while far cheaper than any to the west— i s more expensive than Kansk-Achinsk coal. One ton from'open-cast mines costs 2.5 to 2.9 rubles, while 9 coking coal-- mined from underground-- costs about 6.5 rubles. The Kuzbass is the third largest metallurgical center in the Soviet Union and the only producer of pig iron in Siberia. Although i t s coking coal is the cheapest in the country, a re-duction in coke expenditure i s much hoped for. As for steel making, the open-hearth furnaces of the region operate almost exclusively on coke oven and blast furnace gases for want of better fuel. Here, indeed, is a large market for natural gas, to which the developing chemical industry of the Basin could be added. Beside having a greater need for natural gas than the eastern half of Central Siberia, this region also l i e s closer to actual and potential areas of supply. Though gas found in the ?jestern half of the West-Siberian Depression w i l l un-questionably go to the Urals rather than the Kuzbass, a large enough section of this petroliferous province i s at a reason--Geograficheskaya Problemy..., p. 338. 189. able distance from the Kuznets Basin to -warrant the construc-tion of a pipeline following successful strikes. Indeed, the recent find at Okhteure— though over 600 km away— has already given rise to plans for a pipeline. Deposits much closer than that could soon be discovered. North Kazakhstan-West Siberia This region i s much less industrialized than Central Siberia and consumes much less energy. The major centers of consumption are the single large city of Omsk in the north and the mining towns of the south, with ferrous and non-ferrous metallurgy at Karaganda and Dzhezkazgan. Omsk today boasts the largest petroleum refining capa-city in Siberia, has a wide range of industries and is growing rapidly. It is favourably situated as a potential market for the natural gas of West Siberia for i t i s on the edge of petro-liferous territory. If natural gas is to supply the city, how-ever, the deposits would have to be discovered in f a i r l y close proximity. The isolated position of the city makes i t a small market compared to Novosibirsk and the Kuzbass, which would not justify the construction of a long pipeline. Temir Tau, a satel l i t e of Karaganda, is an expanding iron and steel center. Though Karaganda coking coal i s cheaper than that of the Kuzbass, i t i s considerably more costly to cokifys hence a reduction of coke needed would be very welcome. — O i l and Gas Journal, June 8, 1964, p. 114. 190. As in the Kuzbass, the open-hearth furnaces at Temir Tau must work on a mixture of coke-oven and blast-furnace gases. Their conversion to natural gas could greatly raise the efficiency of the steel plant. An extension of the Central Asian pipeline from Tashkent to Karaganda i s projected. This, however, repre-sents a stretch of a thousand km through barren, desert country, and there is no evidence that even preliminary work has started yet. If gas i s discovered in the southern part of the West Siberian Lowland, i t would be more logical to supply Karaganda from that direction. A pipeline from the north could also sup-ply Omsk and Petropavlovsk as well as a number of towns in the Virgin Land. The latter i s not a large market, though Tselin-ograd is developing a range of industries associated with agri-culture, but i t i s a far more responsive territory economically than the desert further south. The agricultural lands of the Virgin Lands and West Siberia could become a f a i r l y large consumer of liquid gases. Natural gasoline can readily he used as tractor fuel, while the house-holds of rural and small-town inhabitants, numbering 7 to 8 million, would need a f a i r l y large amount of propane and butane. By far the greater part of this vast steppeland is devoid of wood and has very l i t t l e peat, which leaves the population with-out local fuel resources. The distribution of bottled gas i s the least expensive solution. Gas distributing stations in the region are already in operation at Karaganda, Uralsk and Guryev and L.P.G. pools are now under construction at Aktyubinsk, 191. 11 Kokchetav, Tselinograd and Pavlodar, with others projected. The rest of Siberia and the Par East Elsewhere, natural gas has and w i l l have only local sig-nificance. Through a d i f f i c u l t pipeline to be built on perma-frost, the Vilyuy f i e l d w i l l supply the city of Yakutsk. Several sources mention the eventual pumping of gas to Norilsk from the Taz deposit, which is believed to be of a magnitude comparable to Shebelinka or Gazli. Finally, the fields of northern Sak-haline may serve Komsomolsk, with i t s small steel m i l l , i f the 12 technical d i f f i c u l t y of bridging the Tartar Strait is surmounted. Since the open hearth furnaces of Komsomolsk lack suitable sup-plies of cheap fuel (there is no blast furnace, hence no by-product gases are available) and seem to be fired by fuel o i l transported across Siberia by r a i l , the av a i l a b i l i t y of gas would be significant. These developments, however, w i l l scarcely affect the over-all economy of Siberia, let alone of the USSR as a whole. The form of energy-supply may be drastically changed in a few given c i t i e s , for instance Norilsk, but the availability of gas w i l l not appreciably increase total fuel consumption. The growth of these areas depends entirely on conditions elsewhere. With large regions, more richly endowed and much better located, s t i l l . _ 0. Yu. Kulinyak: "Ispol 1zovaniye gaza v Kazakhstane," Gazovoye Delo. No. 1, 1963, p. 46. 12 Geograficheskaya Problemy.»•, p. 345; Yu. I. Bokserman: op. c i t . , p. 136-37; R.E. King: op. c i t . , Amer. Assoc. of Petro-leum Geologists, Aug. 1964, p. 1342; Gazovaya Promyshlennost1, No. 3, 1963, p. 43. 192. in a semi-developed stage, the lands of Northern Siberia and the Amur w i l l no doubt continue to be economically dormant. 193. Chapter EC REGIONAL COST ANALYSIS 194. The USSR i s a country of continental proportion, even i f one excludes the largely marginal areas of Northern Siberia and the Far East. Its energy resources and markets are very unevenly distributed. One of the most urgent tasks of Soviet planners, therefore, is to determine the rational energy-mix for each major economic region. Since natural gas was able to cover only 12.4$ of the fuel requirement in 1963, i t is obvious that the major problem of the planners i s the rational allocation of this fuel among the various areas and among the different consumers within these areas. Such an allocation means the maximization of savings (derived from the replacement of more expensive fuels by nat-ural gas) not merely in any particular region, but in the whole of the USSRi Obviously, the cost advantage of gas versus other fuels i s of v i t a l importance in any given region, but— owing to the present disequilibrium between supply and demand— a high cost difference does not everywhere guarantee large-scale sub-stitution. In the following pages the costs of natural gas, natural gas liquids and a few petrochemicals derived from them are ex-amined in various regions of the USSR. A brief look i s also given to the pricing of these fuels and the pricing zones set up in 1964. Of a l l fuels, natural gas is the cheapest to produce. In 1962. extraction costs of 1000 cu. meters of gas from gas wells amounted to 0.51 rubles. Converted to nominal fuels, average production costs of various fuels in recent years were as follows (rubles per ton): 195 Table XVI Fuel Cost Year Natural gas 0.42 1960 Crude o i l 2.10 1960 Coal 11.37 1958 Peat 5.30 1958 Shale 14.83 1958 Wood 34.00 1958 Sources: Yu. I. Bokserman: o p . c i t . , p . 15; R.E.. Ebel: o p . c i t . , p . 99-100; S.D. Eel*d (1964): o p T c i t . , p . 62. Pro-duction costs of gas and o i l were calculated using the follow-ing conversion factors: 1 ton of crude oil=1.43 ton of nom-inal fuel, 1000 cu. m. of gas from gas wells = 1.21 ton of nom-inal fuel. Costs of other fuels were given per ton of nominal fuel by Pel*d. Eel'd also gives costs for crude o i l and nat-ural gas (for 1958). However, for natural gas he includes gases from oil-wells, the cost of which cannot be meaningfully determined (see below). These figures, therefore, were not used. Since output of oil-well gases is intimately tied to that of crude petroleum, extraction costs of these gases cannot be independently appraised. The above costs do not include costs of prospecting and exploration and are, therefore, somewhat unfairly weighed in favour of the two hydrocarbon fuels. Authoritative sources, however, disagree widely about the investment required (for both gas and oil) when prospecting is included: i t is not possible, therefore, to arrive at an unequivocal figure about 2 overall costs. Different sources, however, are in agreement about straight production costs from the various deposits in 2 .V.N.I.I.: Ekonomika Neftedobyvayushchey Promyshlennosti, Gostoptekhizdat, Moskva, 1963, p. 17. 196. recent years, and the figures are given below: Table XVII Extraction costs of natural gas, including transport cost by f i e l d gathering system (rubles per 1000 cu.m.) 1955 1959 1960 1961 1962 Average for USSR 1.48 0.64 0.59 0.53 0.51 Komi ASSR 1.58 2.44 2.66 2.52 2.77 Kuybyshev Ob. 1.71 1.47 1.53 1.62 1.82 Saratov Ob. 2.23 1.58 1.02 0.84 0.72 Volgograd Ob. 0.64 0.59 0.55 0.57 Krasnodar Kray 0.77 0.80 0.70 0.70 Stavropol' Kray 18.67 0.23 0.16 0.20 0.18 Chechen-Ingus ASSR 8.65 12.02 18.82 3.944 5.60 Dagestan ASSR . 13.14 12.64 9.97 8.97 Poltava Ob. 1.16 1.32 1.23 Khar'kov Ob. 0.33 0.29 0.26 0.24 L'vov Ob. 0.49 0.49 0.44 0.39 Ivan-Pranko Ob. 0.68 7.20 5.77 5.96 6.25 Uzbek SSR 3.70 2.94 1.95 1.21 Kirgiz SSR _ 2.13 2.59 3.00 & The reorganization of the industry is responsible for the excessive change in cost from the previous year. Sources; Yu. I. Bokserman: op. c i t . , (1964) p. 15 and N. I. Hovikov, op. c i t . , Gazovoye Delo, 1963, Ho. 5, p. 9 (for the major deposits). 197. Two important conclusions can be drawn from the table: a) extraction costs of natural gas vary greatly in the d i f f e r -ent fi e l d s , b) a l l major fields and the whole of the USSR experienced a gradual reduction of costs over the years. Since the beginning of large-scale production, extraction has been cheapest in Stavropol' Kray (North-Stavropol' f i e l d ) , followed by Kharkov Oblast (Shebelinka) and L'vov Oblast. The Uzbek SSR (mainly the Gazli deposit) has been, up to now, a relatively expensive producer, due to desert conditions, remoteness and the result-ing d i f f i c u l t i e s in development. By the end of 1965, however, planned cost at Gazli i s supposed to be no greater than in the 3 well developed region of Stavropol1^ Kray, and may even be less. There i s evidence that production cost has increased recently in the latter area, caused by the drop in f i e l d pressure(see page 163). In every producing f i e l d , the amortization of fac-i l i t i e s — wells, compressors, gathering lines, e t c . — make up by far the largest share of extraction cost, reaching two-thirds 4 of the total in North-Stavropol'. (For precise breakdown, see Appendix, Table VI ). 3 A.E. Zasyad'ko: Toplivno-Energeticheskaya Promyshlennost'  SSSR, Gosplahizdat, Moskva, 1959, p. 55; L.A. Melent' ev & E.O. Shteyngauz: Ekonomika Energetiki SSSR, Gosenergizdat, Moskva, 1963, p. 97 and V.A. Shelest e_t a l : op. c i t . , p. 73. There i s no agree-ment among the sources about precise planned costs in the various f i e l d s . The last two sources give costs as "in the future". Both -judge Central Asia to be the cheapest future producer. 4 A.L. Kozlov: op. c i t . , Gazovaya Promyshlennost', 1963,No.11, p. 8; M.M.- Brenner: Ekonomika Nefyanoy Promyshlennosti SSSR, p.320, Moskva, 1962 and E.E. Dunayev: Ekonomika i Planirovaniye•; Nefyanoy  Promyshlennosti, Gostoptekhizdat, Moskva, 1961, p. 139. 198. Though long distance transport increases cost by as much as four-five times, natural gas i s s t i l l the cheapest fuel in every region of the Soviet Union except Siberia and the Far East. The tables below present comparative costs of various fuels in the major regions of the USSR for 1959 and projected costs at major points of consumption in 1965. Despite the high cost of transport for natural gas, this fuel i s much cheaper than the others in a l l regions of European Russia, though i t must yield to coal east of the Urals. Here coal i s quarried in large open-cast mines very near to places of consumption, while the recent-ly discovered gas deposits of Siberia l i e 1500 - 2000 kms away from the populated belt along the Trans-Siberian Railway. Until very recently the price of gas was seriously out of balance with i t s cost, and in most regions was fixed at the 5 level of the price for coal. In January 1964 a new price sys-tem came into effect. Though more rational than the former, i t s t i l l only partially reflects the competitive position of this fuel in the various regions of the country. Five zones are established, the price being the same everywhere within each zone. Zone I comprises the major gas producing regions, such as the North Caucasus, the Western Ukraine, part of the Volga (for Kharkov Oblast, see below), within which the price i s fixed at 9.5 rubles per 1000 cubic meters. Zone I I includes the minor producing regions, e.g. the Transcaucasus, the Komi ASSR, prob-ably the Middle Volga, etc., and areas which are traversed by _ T. Brents: op. c i t . , Gazovoye Delo, No. 8, 1963, p. 44. 199. Table XVIII Costs of various fuels and. required capital investments in the major regions of the USSR (1959) (rubles* per ton of nominal fuel) Cost Capital outlay Oil Natural Local O i l Natural Local Gas fuel Gas fuel Baltic and peat Byelorussia 4.5 3.0 S.O shale 7.0 2.75 2.76 Northwest 6.0 3.5 10.0 shale 7\ 25 3.25 3.3 lignite Center 4.5 3.0 13.5 peat 7.0 2.75 4.5 Volga 4.0 1.5 12.5 shale 6.5 1.5 3.25 Donbass 4.5 2.5 8.5 coal 7.0 2.25 2.25 West Sib. 5.5 3.5 4.55 coal 7.5 3.25 1.35 East Sib. 6.5 5.0 1.8 coal 8.5 4.35 0.74 A Given in old rubles and converted to present value. Source; Akademiya Nauk SSSR; Toplivo i Toplivnaya.Promy-shlennost' , Moskva. 1960, p. 242. large diameter trunklines. Here the price i 3 11 rubles per 1000 cu. meters. To this zone are assigned also Poltava and Kharkov Oblasts (with the huge Shebelinka field) since the lowering of the price here i s not thought expedient due to proximity to the Donets Basin. Zone III includes a l l the Ukraine save for L'vov, Kharkov and Poltava Oblasts. The price here i s set at 12 rubles. To Zone IV belong the Center and the Baltic, except Estonia, with a price of 13 rubles per 1000 cu. meters. Zone V embraces Leningrad and Novogorod Oblasts, which are farthest from centers of production, and also Estonia where natural gas is penalized 200 Table S I X Projected costs of various fuels in 1965 at major consuming centers of the USSR and regional capital investment (rubles per ton of nominal fuel) N A T U R A L G A S C O A L P E A T Points of consump-tion Regions from which ci t i e s are supplied Total Cost Capital Outlay (Total) Deposits from which cities are supplied Total Cost Capital Outlay (Total) Regions of con-sumption Cost Leningrad East Ukraine North Caucasus 2.41 24.3 Donbass Vorkuta 15.68 22.98 38.04 38.45 Leningrad Oblast' 7.72 Riga West Ukraine 2.75 30.1 Donbass 15.45 31.26 Latvia 6.37 Moscow North Caucasus East Ukraine Volga 1.9 1.32 18.1 13.0 Donbass 14.28 27.93 Moscow Oblast' 5.80 Gor * kiy Volga 0.65 6.4 Donbass 14.71 30.81 Gor'kiy Ob.6.92 Rostov North Caucasus 0.56 6.1 Donbass 13.14 24.19 Saratov Volga Donbass 14.28 27.72 T b i l i s i North Caucasus Karadag 1.5 13.8 Donbass 14.94 28.14 Sverdlovsk Central Asia 2.52 25.1 Kuzbass Chelyabinsk 10.49 12.16 20.46 34.38 Minsk Western Ukraine 1.45 15.8 Donbass L 1vov-Vol-ynsk 15.26 19.70 29.78 26.43 Byelorussia 6.00 Kiev Western Ukraine 1.8. 17.1 Donbass 14.17 27.68 Ukraine : 5.63 Tashkent Central Asia 1.33 13.0 Kuzbass Karaganda 13.04" 12.41 27.02 22.10 Alma-Ata Central Asia 3.33 30.9 Kuzbass Karaganda Ekibastuz 10.49 11.22 6.75 23.93 20.95 22.12 201. on account o f the e x i s t i n g l a r g e - s c a l e f a c i l i t i e s f o r t h e p r o -6 a u c t i o n of s h a l e gas. Here n a t u r a l gas i s p r i c e d a t 15 r u b l e s . One can p e r c e i v e the pr o b l e m of a l l o c a t i o n b e h i n d t h i s scheme. S i n c e n a t u r a l gas can c o v e r o n l y a p o r t i o n of the ener-gy need, the use o f h i g h - c o s t f u e l s w i l l have t o c o n t i n u e i n some a r e a s . Here gas i s p r i c e d h i g h e r t h a n o t h e r w i s e w a r r a n t e d t o d i s c o u r a g e w a s t e f u l consumption ( e . g . under b o i l e r s ) by p l a n t s w h i c h - - due t o l o o s e n i n g c o n t r o l - - can now choose t h e i r sup-p l i e r s t o a de g r e e . Comparing t h e s e p r i c e s t o c o s t s ( T a b l e s X V I I - X I X ) the d i f f e r e n c e s appear v e r y g r e a t . Indeed of a l l m i n e r a l f u e l i n d u s t r i e s , the gas i n d u s t r y r e g i s t e r s the l a r g e s t p r o f i t today i n the USSR. I t must be remembered, however, t h a t p r o s p e c t i n g and e x p l o r a t i o n c o s t s a r e not i n c l u d e d i n the c o s t s g i v e n i n these t a b l e s ( X V I I - X I X ) . These a r e h i g h and must be c o v e r e d . The p r o d u c t i o n c o s t s o f n a t u r a l gas l i q u i d s depend p a r t l y on the c o s t and c h e m i c a l c o m p o s i t i o n of wet gases from w h i c h th e s e l i q u i d s a r e e x t r a c t e d and p a r t l y on t h e e f f i c i e n c y o f g a s - p r o c e s s i n g p l a n t s . P r o d u c t i o n c o s t s f a l l o f f s h a r p l y as the c o n c e n t r a t i o n o f l i q u i d s i n the gas i n c r e a s e s . The d i a -gram below, g i v e n f o r two major g a s - p r o c e s s i n g p l a n t s i n the M i d d l e V o l g a , i l l u s t r a t e s t h i s f a c t . 6 I b i d . , p. 46-47. Note f o r Table X I X : Por g r e a t e r d e t a i l of c o s t s and cap-i t a l i n v e s t m e n t s ( i . e . f o r output and t r a n s p o r t ) see A p p e n d i x , Table V I I . S o u r c e s : P o r gas and c o a l : Y u . I . Bokserman: op. c i t . , (1964), p. 229 & 230. F o r p e a t : D.I. M a s l a k o v : op. c i t . , p.106. 202. r U b , e % o n O 100 200 300 400 500 gm./fcu. m. Concentration of l i q u i d f r a c t i o n s (propane - pentane) 1 - Minnibayevo plant 2 - Tuymazy plant Though the above diagram i s given only f o r propane and n a t u r a l g a s o l i n e , i t can be s a f e l y assumed that the same s i t u a t i o n ap-p l i e s to condensates. For t h i s reason, assuming s i m i l a r s t r i p -ping techniques, the cost of producing one ton of condensates i n Krasnodar Kray-- -where i t s average c o n c e n t r a t i o n i n the gas i s 26.4 gram per cu. meters-- must be much lower than at Sheb-7 e l i n k a , where only 4.5 grams per cu. meter are present. Cost f i g u r e s of L P G and n a t u r a l g a s o l i n e i n nine impor-tant gas-processing p l a n t s are l i s t e d below f o r three years. F i v e of the works are l o c a t e d i n the Volga Region, three i n the Caucasus and one i n the , 7 e s t e r n Ukraine. The wide v a r i -a t i o n i n cost i s immediately apparent. 7 V. T. B o r i s o v : " P r o i z v o d i t e l ' n o s t * truda i p u t i yeye povysheniya v dobyche gaza," Gazovoye Delo, Uo. 8, 1963, p. 68. 203. Table XX Cost of LPG and natural gasoline in gas-processing plants of the USSR (rubles per ton). Realization Plants Plan 1959 I960 1961 Tuymazy 10.27 11.57 9.32 8.45 , Minnibayevo 7.24 15.03 11.54 9.62 ^ X) o o Mukhanovsk 6.68 a si rQ -P °3 | Shkapovo 6.12 17.13 o Groznyy — 22.18 24.50 25.45 0 4 J Baku 35.82 31.58 25.61 3 Borislav 33.47 33.44 o £ o Saratov —- 79.92 73.32 90.72 & xi o a> Krasnodar 55.00 61.88 55.10 Source; V. I. Luzin: "Hekotorye ekonomicheskiye poka-zateli polucheniya zhidkikh produktov i z nefyanogo gaza,tt  Gazovoye Delo. No. 8, 1963, p. 50. As with dry natural gas, the prices of natural gas l i q -uids are centrally fixed, but seem to exhibit greater variations. The prices for LPG and natural gasoline are not available, but some data on condensates has been found. At Shebelinka the price is fixed at 23.70 rubles and reflects the low productivity due to the low concentration of condensates in the gas. In Kras-nodar Kray, on the other hand— though production i s certain to be much cheaper on account of the greater concentration of these liquids-- the price i s fixed independently of production 8 cost and i s set at the price of crude o i l , as 4.90 rubles. 8 Ibid., p. 67. 204. This indicates that there must be an o f f i c i a l l y delimited, s t r i c t -ly bound, market area for both producers. As the distance be-tween them is only 500 km, condensates from Krasnodar Kray should be much cheaper at Shebelinka than the local product. In trying to gain some idea (however vague) of the com-parative economic position of petrochemicals derived from natural gas in the various regions of the USSR, one i3 forced to think more in terms of the future than the present. A mere 457,000 tons of natural gas liquids were used to produce petrochemicals 9 in 1962, against over 14 million tons in the United States. Even in 1965, for instance, nearly half of a l l ethyl alcohol is to be manufactured from potatoes and grain (in 1961, 62^ were 10 made from these sources). As for dry natural gas, i t i s beginning to be used in greater quantities as basic feedstock for three chemicals: ammonia (and i t s derivatives), methyl alcohol and carbon black. Since 1963, half of a l l ammonia is produced from natural gas (ammonia produced from synthesis gas, obtained during the manu-11 facturing of acetylene is included). Natural gas should play a similar role in the production of other n i t r i c f e r t i l i z e r s such as urea and ammonium nitrate. (The amount of gas consumed 9 Butane-Propane News, No. 10, 1962, p. 53 and No. 1, 1963, p. 46; L. P. Gas, A p r i l 1963, Vol. 23, No. 4, p. 36; D. A. Tsvetkov: op. c i t . , Gazovoye Delo, No. 11, 1963, p. 43. 10 B.A. Brunshteyn e_t a l : Proizvodsvo Spirtov iz Neftyanogo  i Gazovogo Syrya, Izdatel'stvo "Nedra", Leningrad, 1964, p. 41. 11 N. A. Simulin: "Razvitiye azotnoy promyshlennosti," Khimicheskaya Promyshlennost1, No. 1, 1964, p. 8. 205. to produce these f e r t i l i z e r s is unfortunately not available). For the manufacturing of methyl alcohol, one b i l l i o n cubic me-ters were used in 1963 and about a third of a l l methyl alcohol 12 was produced from natural gas. Of a l l petrochemicals, probably carbon black accounts for the largest amount of gas: 2.5 b i l l . 13 cu. meters were planned to be burned for carbon black in 1964. Practically no data i s available about the production costs of n i t r i c f e r t i l i z e r s , which are, in any case, different when ammonia and i t s derivatives are produced in conjunction with acetylene. Even the largest plants operate at varying levels of technical efficiency and need different amounts of gas of identical chemical composition and c a l o r i f i c content to produce the same amount of analogous products, (e.g. the Novo-moskovsk, Lisichansk and Nevinnomysk pla n t s — a l l using Stav-ropol 1 gas— differ by as much as 25$ in the number of cubic 14 meters required to make one ton of ammonia) Situated some 800 kms farther away from their mutual source of gas-supply and, therefore, incurring significant transport charges on every cubic meter used, the Novomoskovsk (south of Moscow) chemical combine nevertheless manufactures ammonium nitrate about 50$ 12 B.A. Brunshteyn et a l : op. c i t . . p. 22 and "Gazovaya promyshlennost* k 46-iy godovshina Velikogo Oktyabrya," Gazovaya  Promyshlennost', No. 11, 1965, p. 5. 15 Ibid., (Gazovaya Promyshlennost') p. 5. 14 R. Sheyenkov: "Pob'em proizvodstva mineral'nykh udo-breniy," Ekonomi che skiye Nauki, No. 1, 1964, p. 10. (By 245 cu. meters. About 1060 cu. meters are required to produce one ton of ammonia. 206. 15 cheaper than the L i s i c h a n s k combine (Lugansk O b l a s t ' ) . A b s o l -u t e c o s t i 3 a v a i l a b l e o n l y f o r the G h i r c h i k p l a n t , n e a r Tashkent, w h i c h uses gas f r o m the Bukhara d e p o s i t s about 500 kms away. Here one t o n of ammonium n i t r a t e c o s t 31 r u b l e s i n 1962. C h i r -c h i k i s one of the l a r g e p l a n t s w i t h t e c h n i c a l e f f i c i e n c y appar-e n t l y comparable t o the L i s i c h a n s k combine. Assuming t h a t , c o s t a t Novomoskovsk s h o u l d not be much more t h a n 20 r u b l e s and at Nevinnomysk ( s o u t h o f S t a v r o p o l ' ) — where l e s s gas i s needed p e r t o n o f ammonia than a t Novomoskovsk— i t s h o u l d be somewhat 16 l e s s . These f i g u r e s cannot be t a k e n w i t h too g r e a t a c e r t a i n t y , b u t t h e y do i l l u s t r a t e the f a c t t h a t i t i s not y e t p o s s i b l e t o make a r a t i o n a l economic a n a l y s i s about the p r o d u c t i o n c o s t of f e r t i l i z e r s a t v a r i o u s p o i n t s . These f a c t o r i e s changed over t o n a t u r a l gas from c o a l and coke-gas o n l y i n the p r e s e n t decade, and c o n d i t i o n s w i t h i n the p l a n t s have g r e a t e r e f f e c t s on c o s t s t h a n the p r i c e o f raw m a t e r i a l s and f u e l . E x c e s s i v e l y l o n g h a u l s , however, can more than t r i p l e t h e c o s t o f f e r t i l i z e r s i n many r e g i o n s . The average s h i p p i n g 17 d i s t a n c e f o r n i t r i c f e r t i l i z e r s i n 1960 was 1290 km, due t o extreme c o n c e n t r a t i o n o f p r o d u c t i o n i n a few a r e a s . A c c o r d i n g t o Eedorenko, the c o s t of t r a n s p o r t i n g 100,000 t o n s a d i s t a n c e 18 o f 1000 km amounts t o 5,650,000 r u b l e s , t h a t i s 56.5 r u b l e s 15 I b i d . , p. 7. 16 I b i d . . p. 9-10. 17 V. G i t k o v i c h : op. c i t . . Gudok. Nov. 13, 1963, p. 3. 18 N.P. Eedorenko e_t a l : Q c h e r k i po Ekonomike K h i m i c h e s k o y  P r o m y s h l e n n o s t i SSR, I z d a t e l ' s t v o "Vysshaya S h k o l a " , ffioskva, 1960, p. 103. 207. per ton. In the Western Ukraine, therefore, which s t i l l does not supply i t s own needs, a ton of ammonium nitrate from the Lisichansk factory should cost somewhere "between 80 and 90 rubles (and more from the other coal-based f e r t i l i z e r plants of the Donets Basin)-- though advantageous freight charges should keep i t lower than that. It i3 averred, as late as 1964, that n i t r i c f e r t i l i z e r s can be "economically" ( i t a l i c s added) distributed from the Eastern Ukraine within an area of nearly 570,000 sq. 19 km — a huge territory which must include the whole of the Ukraine, part of the Baltic, Byelorussia and the Central Cher-nozem Region. Such transport by r a i l i s undoubtedly carried on today, although the delivery of the required amount of natural gas (presumably by pipelines of 28 inches diameter or over) is alleged to cost half as much as the transport of these finished products. (5.6 million rubles for 100,000 tons of f e r t i l i z e r delivered over a distance of 1000 km against 2.25 million rubles for 100 million cubic meters of gas delivered over the same 20 distance. This cost for the gas may include capital charges, for i t i s higher than given by Savelev on page 70.) These f i g -ures, too should be treated with caution. A more recent state-ment claims that transport costs of n i t r i c f e r t i l i z e r s are at most 30$ higher than the delivery costs of the required amount 21 of natural gas by major trunklines. 19 Ekonomicheskaya Gazeta, June 13, 1964, p. 9. 20 Ibid., p. 103. 21 V. Bivishev: "Khimiya i narodnoye potrebleniye," "Voprosy  Ekonomiki. No. 2, 1964, p. 48. 208. Practically no sulfur i s extracted yet from natural gas. Fortunately for Soviet planners only a few, relatively small deposits yield sour gas (see Table V, Chapter II, p. 40), and sulfur, therefore, does not interfere with long-distance trans-port. The lack of urgency to remove sulfur, however, has de-prived the chemical industry of a cheap raw material. Most plants today use mineral sulfur for the production of sulfuric acid, essential in the manufacturing of superphosphate, similar phosphoric f e r t i l i z e r s and a host of other chemical products. At present, sulfuric acid in the USSR sells for 18 rubles at the place of production (mainly the Center, the Urals and the Eastern Ukraine), but the factories are obliged to spend 17 rubles on the mineral sulfur alone. (Whether this is less in the Urals, where sulfur is mined, than in the other regions, or whether a uniform price i s set on sulfur is not indicated). It i s evident, that under such conditions a l l factories using 22 mineral sulfur must work at a huge d e f i c i t . Sulfur produced from gas and o i l should be 4 - 5 times cheaper than that. Production costs of carbamide (urea) and of methyl a l c o h o l — which are manufactured most cheaply from natural gas but which also require high enex'gy inputs-- vary in different regions with the cost of raw material and energy. (Usually, but not necessarily, natural gas provides the energy as well.) The most favoured regions, therefore, are Central Asia, the Volga 22 R. Sheyenkov: op. c i t . , Ekonomicheskiye Uauki, No. 1, 1964, p. 9. 209. and East Siberia. In the latter area the small amount and rela-tively expensive gas of Irkutsk Oblast could provide the raw material even at present, while the very cheap coal could sat-isfy the energy need-- which in the case of methyl alcohol, at least-- i s consumed chiefly in the form of el e c t r i c i t y . Table XXI Tentative costs of carbamide and methyl alcohol (from natural gas) in various regions. (in percentages. Costs in the North-West are taken as 100$) Economic regions Carbamide Methyl Alcohol end Expenditure on: cost raw material energy end Expenditure cost raw mat. on: energy North-West 100 100 100 100 100 100 Center 90.4 96.7 72.1 103 116.3 i 60.0 Volga 70.1 75.8 40.0 70.6 83.6 46 North-Caucasus 81.9 84.6 90.4 82.0 93.0 56 Y/est Siberia 77.5 87.8 54.7 80.9 92.0 54 East Siberia 70.8 75.0 43.4 72.1 86.5 44 Far East 109.5 115.4 104.0 126.0 129.8 100 Central Asia 70.6 73.7 44.8 67.5 80.7 44 Source: N. Fedorenko and A. Vayn: op . c i t . , Planovoye Khozyaystvo, No. 5, 1964, p. 29. Production costs of organic intermediates and their reg-ional variations are almost a l l forecasts. In Chapter II, p.34-41 the respective positions of LPG's (via olefins) and of dry natural gas (via acetylene) as petrochemical raw materials were discussed in a general way. Due to the concentration of LPG- production (combined with general scarcity), in regions reached by gas 210. pipelines the production of acetylene may be more economic than the production of olefins from LPG-'s imported by r a i l . If the region has a large enough o i l refinery, however, olefins from refinery liquids are likely to be cheaper. The following pages compare the end costs of acetylene (from dry natural gas) and of two olefins from liquid hydrocarbons in three types of regions of the Soviet Union. Tables VHI-X in the Appendix compare the costs of three further products which can be made from dry na-tural gas as well as liquid products (unfortunately only percent-age figures are available). Type I regions in the following table represent those where hydrocarbon resources are abundant and energy cost moder-ate but not cheap, such as the Middle Volga, the Baku area and to a much lesser extent the Western Ukraine. Type II includes those regions which have limited hydrocarbon resources, espec-i a l l y natural gas, but boast low cost energy. Central Siberia i s the most obvious representative of this type. Finally, Type I I I embraces those regions which have extensive resources of natural gas and cheap energy, e.g. Central Asia and the North 23 Caucasus (especially the former). These examples are not given by the source cited, but the c r i t e r i a of grouping make i t f a i r l y clear which regions should be included in each group. These are no doubt tentative comparisons, but the con-clusions that may be drawn from them f i t well into the general analysis of the use of olefins and acetylene in the organic petrochemical industry of the USSR. (Chapterll, p. 38-41). 23 G-.Borisovich: "0 r a z v i t i i proizvodstva etilena, atseti-lena," Khimicheskaya Promyshlennost', No. 8, 1963, p. 4. 211. Table XXII Cost indices of acetylene, ethylene and propylene in various regions of the USSR (in percentages) Methods of production Capital Projected costs in three types outlay of regions (in percentages) I II III Acetylene Partial oxydization (oxygen pyrolysis) of methane from 100 100 100 - 100 natural gas. High temperature pyrolysis of liquid products 115 95 90 110 Electric cracking of meth-ane from natural gas 70 — 6 0 60 Prom coal via calcium carbide 115 150 165 Ethylene Pyrolysis of liquid hydrocarbons 40 70 70 85 Propylene Pyrolysis of liquid hydrocarbons 20 55 55 70 Source: Khimicheskaya Promyshlennost1, Ho. 8, 1963, p.4. Where olefins can be produced— in areas which have resources of LPG's and refinery l i q u i d s — they serve as a much more attrac-tive base for the petrochemical industry than acetylene. Pro-pylene is especially economic, though i t i s a less versatile basic chemical than ethylene (or acetylene). But ethylene, too, costs 1.3 to 1.5 times less than acetylene and i t s production requires much less capital investment. In regions of type II and III, however— such as Central Siberia and Middle A s i a — the manufacturing of acetylene by electric cracking appears very attractive indeed and is considered cheaper than the production of ethylene (mostly from "imported1* petroleum), and in Region III cheaper even than that of propylene. The much higher capital 212. i n v e s t m e n t n e c e s s a r y — i n t e r e s t s on w h i c h a r e not i n c l u d e d i n t h e comparison o f c o s t s - - makes the p i c t u r e somewhat l e s s "bright f o r a c e t y l e n e , however. A c e t y l e n e by p a r t i a l combustion ( o x y d i -z a t i o n ) appears much more e x p e n s i v e , and a p p r o x i m a t e l y on par i n a l l t h r e e t y p e s o f r e g i o n s ( T h i s , however, does not seem t o be a r e a l i s t i c a s s u m p t i o n on a c c o u n t of the heavy t r a n s p o r t c o s t n a t u r a l gas must i n c u r i n R e g i o n I I ) . I n r e a l i t y i t i s much cheaper, f o r over 10,000 c u b i c meters of s y n t h e s i s gas i s ob-t a i n e d a l o n g w i t h a t o n o f a c e t y l e n e , and t h i s b y - p r o d u c t i s v a l u e d a t over 40$ o f the p r o d u c t i o n c o s t o f the a c e t y l e n e , an 24 amount w h i c h must be d e d u c t e d . I n the f u t u r e , the b u l k o f a c e t y l e n e i s t o be produced by t h i s method-- a p l a n w h i c h i s r e l a t e d to t h e i n c r e a s e i n the m a n u f a c t u r i n g o f n i t r i c f e r t i l i -25 z e r s f o r w h i c h s y n t h e s i s gas i s a b a s i c raw m a t e r i a l . Table X X I I I p r o v i d e s d e t a i l e d c o s t comparisons f o r the p r o d u c t i o n o f a c e t y l e n e i n two r e g i o n s of the USSR — the Lower Don a r e a and C e n t r a l S i b e r i a . P r o d u c t i o n c o s t s a r e compared b o t h f o r the p a r t i a l combustion o f methane ( n a t u r a l gas) and f o r t h e e l e c t r i c c r a c k i n g o f l i q u i d f e e d s t o c k s . ( i t i s n o t made c l e a r whether the gas used i n C e n t r a l S i b e r i a would be l o c a l o r " i m p o r t e d " . Only v e r y s m a l l amounts o f n a t u r a l gas a r e found h e r e a t p r e s e n t , though d i s c o v e r i e s a r e not u n l i k e l y . " I m p o r t s " 24 L.V. Semenov et a l t " P e r s p e k t i v y i ekonomicheskaya e f f e k t i v n o s t ' i s p o l ' z o v a n i y a l o v u s h e c h n y k h e m u l s i i ... v p r o i z v o d s t v e a t s e t i l e n a , " K h i m i y a i Tekhnologi.ya, Ho. 7, 1963, p. 42, T a b l e 1. 25 G. B o r i s o v i c h : op. c i t . , K h i m i c h e s k a y a P r o m y s h l e n n o s t * , Ho. 8, 1963, p. 4. 213. Table XXIII Production costs of acetylene in two lo c a l i t i e s and by two different manufacturing methods Price of Partial combustion of Electric cracking of pet-unit methane roleum emulsion  (rubles) No. of Total Cost No. of Total Cost Novo Cen units Novocher- Cent- units Novocher- Cent-cher t r a l kask r a l Sib. kask r a l Sib. Basic materials: kassk Sib.  Natural gas(lOOO cu.m.) Oxygen(lOOO cu.m.) Petrol, emulsion (ton) Auxiliary mat. (kg) 1.00 6.00 3.00 1.00 1.77 6.00 2.00 1.00 6.4 3.6 6.00 6.4 21.8& 6.0 10.62 21.8a 6.0 3.055 6.0 9.18 6.00 6.11 6.00 Energy costs: Electricity(lOOO kwh) Water (ton) Steam (cu.m.) Condensate (cu.m.) 5.00 0.0_2 2.15 0.54 4.00 0.012 2.15 0.54 1.57 575.0 6.87, 0.5 7,85 6.9 14.77. 0.27 6.28 6.9 14.77 0.27 10.18 235.0 6.87 0.5 50.90 2.82 14.77 0.27 40.72 2.82 14.77 0.27 Wages & salaries(rubles) — — 1.41 1.41 1.09 1.09 Amortization(rubles) mm mm mm mm- 6.39 6.39 2.76 2.76 Shop & Dept. expenses(ru. ) -- 14.68 14.68 12.72 12.72 Total plant cost _ _ 86.27 89.12 —— — 100.51 87.26 By-products: Synthesis gas(l000 cu.m.) Carbon black (kg) 4.00 0.11 4.00 0.11 10.3 41.20 41.20 3.3 312.0 13.2 34.32 13.2 34.32 End cost of 1 ton of acetylene by the combus-tion method (rubles) mm> mm 45.07, 47.92 End cost of 1 ton of ace-tylene by electric crack-ing using: (rubles) a) 30$ pet. emulsion — — — 52.99 38.34b b) 17$ pet. emulsion — — 50.86 37.74b a) Oxygen, whose production requires a considerable amount of electricity should be cheaper in Siberia. b) Figures add up to slightly different end costs: 39.74 and 37.61. Either there i s a minor error somewhere or there are additional factors influencing cost. Source: Khimiya i Tekhnologiya. No. 7, 1963, p. 42. 214. to the area east of the Yenissey do not appear probable but could be expected to the Kuznets Basin. In any case, however, the price of gas i s set improbably low as explained further below). It is clearly shown by the table that the cost of elec-t r i c i t y makes up half the total cost of acetylene produced by electric cracking( If methane and not liquid feedstocks were cracked, even more electricity would be required.) The partial combustion method, therefore, is clearly more economic in a region, such as the Lower Don-North Caucasus, where natural gas i s abundant and cheap but electricity i s f a i r l y expensive— espece i a l l y when these regions are also in need of f e r t i l i z e r s . The actual costs of acetylene, however, are l i k e l y to be considerably higher than those given in the table for both areas. The cost of raw materials seems unbelievably low. The chemical industry purchases gas at a price which excludes turnover and 26 sales tax— which cuts the price by one half -- and Novocherkassk is situated very close to the major deposits of the North Caucasus. Yet a price of one ruble per 1000 cubic meter is pos-sible only i f the pipelines purchase gas at cost and deliver i t to the plant, making hardly any profit. (The producing enter-prises and the pipelines form different departments of the State G-az Trust (Gazprom) with separate planned profits for each). Such a course is possible, but i t i s certainly not sanctioned in a l l areas of the USSR. In Siberia, however, 1.77 rubles per 1000 cubic meter would be far too low even at cost price. A 26 T. A. Brents: op. cit.,' Gazovoye Delo, No. 8, 1963, p.47. 215. higher price for natural gas, however, would simply strengthen the argument of the previous pages about the competitive posi-tion of acetylene produced by partial combustion of methane. The difference between producing areas and those to which gas has to be transported would be accentuated. (Petroleum emulsion— light petroleum fractions suspended in water-- cost less in Siberia than at Novocherkassk, despite the 'import' of o i l from the Hiddle Volga, because at the latter place Caucasian crudes would be used, which are five times more expensive than crudes from the Middle Volga). Tables VIII - XII in the Appendix ill u s t r a t e the limi t -ations of dry natural gas as raw material for organic synthesis. Dry gas can be economic only in those regions where i t is plen-t i f u l , provided that these regions have cheap elec t r i c i t y (then electric cracking is used) or require n i t r i c f e r t i l i z e r s in large quantities (then partial combustion is employed) and have, by and large, no access to IPG's or low-cost refinery products (at present, from Volga crudes). 216. C O N C L U S I O N 217. TJtie Soviet natural gas industry is very young: i t s large-scale development i s the work of the past fifteen years, and especially of the last decade. Since 1950, output increased about 20 fold, and today the USSR produces about one-fourth as much as the United States. Though i t s proved reserves are s t i l l only a quarter of those of the latter, i t s ultimate reserves are far in excess, judging from the extent of promising sedimentary basins. Many of the deposits however, even today and more in the future, are inconveniently located with respect to the major consuming areas. Notwithstanding the general eastwardly shift, the bulk of the Soviet population and industry i s s t i l l found in Euro-pean Russia, the Urals included, and three-fourths of a l l fuel i s consumed west of Chelyabinsk and the Caspian Sea. As the coal resources and hydro potentials of this area are generally meager and expensive to exploit, i t i s here that the benefits of cheap natural gas are f e l t today. Outside European Russia gas consumption i s as yet negligible. Although a l l the economic regions of the European USSR receive gas today, the amount utilized by them and the contri-bution this fuel makes to the regional fuel balance varies great-l y . The Central Region is by far the largest consumer, account-ing for over a third of a l l gas used in 1962, but w i l l soon be matched by the Urals. The Eastern Ukraine and the Volga are moderate consumers, while a l l other regions use only small amounts. 218. A l l areas could use much more gas than i t is available to them at present, and Soviet planners are faced with the pro-blem of allocating this s t i l l somewhat scarce resource. A l -though natural gas i s expensive to transport, i t is s t i l l the cheapest fuel in a l l regions of European Russia. However, cost advantage alone cannot determine whether gas w i l l be substitu-ted for other fuels. The relative importance of any one area, the value and transportability of alternative sources of energy, and the total saving accruing to the national economy by the replacement must a l l be considered. Thus while the production of lignite and/or peat is being reduced in the industrial core of the Central Region and in the Urals, i t is being expanded in the more outlying areas of the Center, in the Baltic and Bye-lorussia. Similarly shale production has ceased in the Volga and the North Caucasus, but is being intensified in Estonia. The share of gas in the fuel mix of the various regions does not necessarily vary according to the amount util i z e d , since many regions are unimportant consumers of fuel. The share i s over a half in the Transcaucasus, over a third in the Volga and about a quarter in the industrial core of the Central Region. Gn the other hand, i t is n i l in Estonia, small or very small in the Leningrad Region and the Eastern Ukraine and relatively low even in the rest of the Ukrainian SSR. Very large supplies do not necessarily lead to a correspondingly high share of nat-ural gas in the fuel mix of a region. In both Central Asia and the North Caucasus natural gas satisfies less than half of the very modest fuel need. 219. Because the production of natural gas i s highly concen-trated, large areas have and w i l l have no output on their own. The Center, the Urals, the Leningrad Region and the Baltic have to he supplied from distant deposits through long-distance trunk-lines. The f i r s t two regions, in particular, are served by the two longest and largest pipeline-systems of the country. While the above regions need to "import" a l l their gas, the two rich-est provinces— the North Caucasus and Central A s i a — u t i l i z e only a fraction of their output at home. The areal discordance between the major producing and consuming areas i s likely to increase in the future. In 1963 some three-quarters of a l l free gas output came from the North Caucasus and the Ukraine, while the Volga produced roughly an additional one-sixth and the bulk of the oil-well gases in the country. In that year the ratio of "industrial reserves" (A B) to output in European Russia had fallen to an 18 year supply, while in the Ukraine, the Volga and Azerbaydzhan i t was well below that figure. Obviously, new fields must he brought into production i f output targets are to be met, and the necessary increase in reserves w i l l have to come largely from Central Asia and West Siberia. At the same time, Middle Asia w i l l remain hut a minor consumer relative to more important regions in Eur-opean Russia, while the swampy wilderness of the West Siberian Lowland w i l l u t i l i z e no part of i t s output. Only a small amount of natural gas is processed today, with the result that the production of natural gas liquids is as yet quite insignificant. A major consequence of this fact 220. i s that only a very small share of Soviet gas output is consumed today as chemical raw material, since NGL's (natural gas liquids) constitute the most important natural gas-derived feedstocks for the chemical industry. Another i s the relative significance of dry gas for organic products. Methane (via acetylene) is given a greater emphasis vis a vis NGL's in Soviet plans than i t is receiving in the United States, especially since the manufac-turing of acetylene can be profitably combined with the produc-tion of n i t r i c f e r t i l i z e r s in many regions. The development of the natural gas liquid industry, never-theless, is given increasing attention as a prerequisite for the creation of a large petrochemical industry. In those regions, where wet gases are produced in significant quantities, such as the Middle Volga, the Caucasus and, to a much lesser extent, Central Asia and the Western Ukraine, an increasing share of wet gases w i l l be processed in the future. Only in the Volga Region, however, are other conditions favourable enough for the large-scale production of organic intermediates from IPG's. S t i l l , in a l l regions, even in the Middle Volga, where wet oil-well gases predominate over free gases, natural gas is utili z e d overwhelmingly as fuel. Each region, and even sub-region, has i t s own distribution pattern, but the industrial sector (the consumption by power plants included) everywhere takes a share not far from the national average of over 85 per-cent. Nowhere, not even in the city of Moscow, do household and municipal consumers u t i l i z e directly more than a tenth of the total output, although some of the gas burned in electric 221. stations does end up in this sector as by-product heat. Variations in the regional pattern of consumption are great and are influenced by a multitude of factors. While in the Eastern Ukraine, thermal stations u t i l i z e relatively small amounts, and in the Donets Basin the share of gas in the fuel mix of power plants is very low, in the Central Region, the Volga and the Transcaucasus, electric stations are very heavy consum-ers, accounting for a considerably higher share than the nation-a l average. The demand for, and value of, the alternative fuel, as well as the seasonal fluctuation in consumption, account for such differences. Since power plants can use practically any fuel with relatively l i t t l e change in their efficiency, they burn the less valuable ones— coal in the Donbass and, generally, in the Eastern Ukraine; natural gas in the Volga and the Trans-caucasus. In the Central Region, the great imbalance in season-a l consumption and the small scale of underground storage com-pels planners to allocate very large amounts of gas to thermal stations on an interruptible basis. In regions which boast large iron and steel plants, and where natural gas i s available, ferrous metallurgy is a most important consumer. The use of gas in the blast furnace reduces greatly the amount of coke needed, which-- aside from the Kuzbass— is expensive everywhere in the USSR. Steel making in open-hearth furnaces is becoming more and more the domain of natural gas since Soviet fuel oils are either sulfurous or expensive and by-product gases have low heat value. In addition, iron and steel plants are attractive to planners, because they are very large 222. users and are l i t t l e affected by seasonal fluctuations. In both, the Eastern Ukraine and the Urals, therefore, ferrous metallurgy predominates consumption and i t s share w i l l be very significant in the Central Region once the huge Novo-Lipetsk complex is completed. In the Center, Leningrad and the Urals, though not yet in the Eastern Ukraine, gas is utilized extensively in machine building. In a l l regions of European Russia, again with the ex-ception of the Eastern Ukraine, and increasingly so in Middle Asia, i t appears to play a major role in the building material industry as well, since the great amount of thermal energy re-quired by this industry cannot be produced at low enough cost by other fuels. In the not too distant future, the Kuznets Basin and parts of North Kazakhstan and West Siberia w i l l probably receive nat-ural gas. Yet gas consumption w i l l continue to be concentrated in European Russia and the Urals to an overwhelming degree, and the share of various regions i s not li k e l y to change greatly in the future. The Center and the Urals w i l l remain the largest consumers, followed by the Eastern Ukraine and the Volga. The one region which w i l l probably increase i t s presently small share of gas consumption i s the Leningrad area, but only after new fields have been brought into production. The sectoral distribution of consumption i s more likely to change except in the household and municipal sectors. There are no plans to increase the share of household consumption in the future (indeed, i t has been fa l l i n g since the mid-fifties), 223. and household and municipal consumers w i l l continue to account for slightly less than ten percent of the total amount ut i l i z e d . L i t t l e variation i s to be expected in the different regions ex-cept in the manner of supply. Just as today, households in the more marginal areas (e.g. Central Asia, Byelorussia and the West-ern Ukraine) w i l l probably receive a very large portion of their supply in liquefied form to save investments on distribution lines. Industry w i l l continue to receive 85 percent or more of total supply in every region, but within this sector some changes seem l i k e l y . These changes, however, w i l l tend to reinforce the regional distribution pattern of today. Presently, there is a decrease in the relative import-ance of electric stations in the total consumption, and author-itative voices c r i t i c i z e the indiscriminate use of gas as boiler fuel. Yet owing to the areal discordance between the concentra-tion of population and reserves of solid fuels, as well as to the limited f a c i l i t i e s for storage, the share of electric sta-tions w i l l surely remain considerably higher than in the United States. A significant relative decline can be expected only in the Ukraine and, perhaps, in the adjoining part of the North Caucasus. The iron and steel industry has greatly expanded i t s share of consumption since the end of the last decade, and this increase is l i k e l y to continue until the Ural mills and the new Lipetsk complex receive enough gas for their needs. Beyond that, there may be some further growth i f natural gas i s introduced to the Kuznets Basin. The chemical industry, especially the petro-224. chemical, i s going to receive an increasing share, both i n the form of natural gas l i q u i d s and of dry natural gas i f Soviet plans materialize. Except f o r the production of f e r t i l i z e r s , however, t h i s increase w i l l be concentrated i n a few regions, such as the Volga and, to a much lesser extent, the Caucasus, the Eastern Ukraine and, perhaps, Middle A s i a . 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Table I The f u e l mix of the United States from 1880 to 1920 ( i n percent) Year Coal O i l Natural Gas Nat.Gas l i q u i d s Hydro-power Wood 1880 41.1 1.9 n.a. 57.0 1885 50.3 .7 1.5 47.5 1890 57.9 2.2 3.7 .3 35.9 1895 64.6 2.2 1.9 1.2 30.1 1900 71.4 2.4 2.6 2.6 21.0 1905 75.7 4.6 2.8 2.9 13.9 1910 76.8 6.1 3.3 3.3 10.7 1915 74.8 7.9 3.8 3.9 9.5 1920 72.5 12.3 3.8 • 2 3.6 7.5 Source: S. H. Schurr and B. C. Netschert: op. c i t . , p. 36. 237 Table I I Gross Consumption of Commercial Sources of Energy (million metric tons coal equivalent) North America 1929 1937 1950 Solid Liquid 559.8 457.4 488.6 179.2 200.7 403.7 El e c t r i c i t y Gas (hydro,geo- Total termal and imported) 73.3 45.7 858.0 105.5 50.4 814.0 251.0 86.9 1230.2 Latin America 1929 9.5 15.0 1937 9.7 18.4 1950 9.1 45.1 0.3 2.4 4.9 2.0 3.6 6.4 26.8 34.1 65.5 Oceania 1929 12.0 2.4 0.8 15.2 1937 14.3 4.1 — - 1.2 19.6 1950 20.7 8.6 2.7 32.0 Europe 1929 633.2 23.7 1.7 38.6 697.2 1937 614.0 40.8 3.9 45.5 704.2 1950 635.5 73.7 4.5 67.1 780.8 USSR 1929 52.1 20.4 0.3 0.4 73.2 1937 137.9 44.3 1.9 4.1 188.2 1950 268.8 69.7 11.2 6.4 356.1 Asia 1929 86.0 12.0 0.6 12.5 111.1 1937 109.1 16.3 1.3 18.8 145.5 1950 117.2 25.3 1.2 28.7 172.4 Africa 1929 14.7 2.3 — 0.1 17.1 1937 18.3 3.4 0.3 22.0 1950 28.8 10.1 0.8 39.7 World 1929 1367.3 255.0 1937 1360.7 328.0 1950 1568.7 636.2 76.2 100.1 1798.6 115.0 123.9 1927.6 272.8 199.0 2676.7 Source: S t a t i s t i c a l Office of the United Nation, Dept. of Economic Affairs, Yforld Energy Supplies in Selected Years. 1929 - 50. S t a t i s t i c a l Papers. Series J.. No. 1, New York, Sept. 1952. 233 Table III Technical Indices of Blast-furnace Smelting Air Blasting Blasting with Blasting with without natural gas gas, enriched natural gas by oxygen Blast temperature (centigrades) 1200 1200 1200 Coke consumption (ton of coke per ton of pig iron) 0.538 0.493 0.436 Volumetric efficiency 0.595 0.524 0.480 Productivity (percentage) 100 113 124 Natural gas consumption (cu.m. --- 145 175 per ton of pig iron) Oxygen consumption (cu.m. per ton of - — 138 -pig iron) Blast consumption (cu.m. per ton of 1530 1270 940 pig iron) Oxygen content in — 32 blast, (percent) Source: A. A. Pedotov et a l : Izvestiya Vysthikh  Uchebnik Zavedeniy Chernov Metallurgii, No. 1, 1964, Transl. in US J. P. R. S., 23673, March 13, 1964, p. 5. 239 Table IV Transport Costs of Natural Gas. Cost variations according to length, and diameter of pipelines and the volume of gas transported (rubles per 1000 cubic meters) Inside diameter and thickness of pipe -wall (Millimeters) Transport of gas(billion cu.meters per year)  Distance, km. 500 800 1000 1500 2000 529 x 8 720 x 9 820 x 10 1020 x 12 1.0 3.1 5.3 6.9 1.5 2.6 4.5 6.2 1.7 2.7 4.7 6.1 - — 2.0 2.8 4.9 6.1 ---1.0 3.9 6.3 7.9 _ _ _ — 1.5 2.6 4.2 5.2 1.7 2.3 3.7 4.6 2.0 2.0 3.1 4.2 6.5 9.0 2.5 1.6 3.0 3.7 5.8 8.0 3.0 1.6 2.9 3.7 5.6 7.9 3.5 1.6 2.8 3.6 5.6 7.7 4.0 1.7 2.8 3.6 5.7 7.9 2.0 2.2 3.6 4.5 6.7 9.2 2.5 1.8 2.9 3.7 5.6 7.7 3.0 1.5 2.6 3.2 5.2 7.1 3.5 1.3 2.5 3.0 4.8 6.6 4.0 1.3 2.4 2.8 4.6 6.2 4.5 1.4 2.5 2.9 4.6 6.1 5.0 1.3 2.4 3.0 4.8 6.6 5.5 1.5 2.6 3.1 5.1 7.2 6.0 1.6 2.6 3.1 5.3 7.7 3.5 1.7 2.7 3.4 5.0 7.0 4.0 1.5 2.3 2.9 4.6 6.3 4.5 1.3 2.1 2.6 4.4 5.7 5.0 1.2 2.1 2.6 3.9 5.4 5.5 1.1 1.9 2.4 3.9 5.2 6.0 1.0 1.8 2.4 3.8 5.0 6.5 1.1 1.8 2.4 3.7 5.1 7.0 1.0 1.7 2.2 3.6 4.9 7.5 0.94 1.6 2.2 3.6 4.7 8.0 1.0 1.6 2.2 3.5 4.8 8.5 1.1 1.9 2.4 3.9 5.3 9.0 1.1 2.0 2.4 3.9 5.4 9.5 1.1 1.9 2.5 4.1 5.6 10.0 1.1 1.9 2.6 4.1 5.7 10.5 1.2 2.0 2.6 4.0 5.7 Source: V.M. Gal'perin, "0b optimal'nykh usloviyakh dal'nego transporta gaza," Gazovaya Promyshlennost', No. 4, 1964, p. 42. 240 Table V Coat Structure of Gas Transport over the Kiev Network (comprising the Dashava-Kiev, Kiev-Bryansk and Shehelinka-Poltava lines) Item Percent of 1960 1961 total 1962 1000 1960 rubles 1961 per 1 1962 Wages 20.3 19.3 18.1 0.81 0.72 0.53 Materials and reagents 0.5 0.5 0.5 0.02 0.02 0.02 Energy 7.6 6.5 2.1 0.31 0.24 0.06 Amortization 61.4 63.4 69.8 2.47 2.36 2.13 Maintenance and inventory 2.7 2.8 3.0 0.11 0.11 0.08 Transport expenses 1.1 1.1 0.4 0.05 0.04 0.02 Administration and organization 4.0 3.9 3.6 0.16 0.14 0.11 Other economic expenses 2.4 2.5 2.5 0.09 0.09 0.07 TOTAL 100$ Sourcet V. S. Chernovol, op. c i t . , Gazovaya Promysh-lennost' , No. 12, 1963, p. 40. 241 Table VI Cost structure of natural gas extraction Item of Expense Horth-Stavropol' Ukraine kop./lOOO cu.m. % "percent Saratov Ob. percent Wages 1.7 Amortization 11.7 -of wells 5.4 -of other equip-ment 6.3 Repair 0.4 Other production cost 0.7 Departmental cost 1.3 General industrial cost 0.8 Administration 1.2 9.5 17.5 66.0 30.4 35.6 2.1 3.9 7.3 4.5 6.7 50.0 30.3 19.7 0.5 32.0 17.0 52.8 40.6 12.2 1.7 28.5 Total Cost 17.8 100.0 100.0 100.0 Sources; A. L. Kozlov et a l : op. c i t . , Gazovaya  Promyshlennost', Ho. 11, 1963, p. 8 and P.P. Dunayev: op. c i t . , p. 189. Table VII Projected costs of natural gas and coal in 1965 at major consuming centers and necessary capital investments (rubles per ton of nominal fuel) N A T U R A L G A S C 0 A L Points of con-sumption Cost Capital Outlay Cost Capital Outlay Gas Out- Trans-Fields put port Total Out- Trans-put port Total Coal Out- Trans-Fields put port Total Out- Trans-put port Total Leningrad East Ukraine 0.41 2.0 2.41 North Caucasus 3.9 20.4 24.3 Donbass 12.72 2.96 15.68 Vorkuta 15.17 7.81 22.98 23.12 9.92 38..CW 26.12 12.33 38-45 Riga West Ukraine 0.65 2.1 2.75 6.5 23.6 30.1 Donbass 12.72 2.73 15.45 23.12 8.14 31^6 Moscow North Caucasus East 0.5 1.4 1.9 Ukraine Volga 0.52 0.8 1.32 4.4 13.7 18.1 5.2 7.8 13.0 Donbass 12.72 1.56 14.28 23.12 4.81 27_-!3 Gor'kiy Volga 0.46 0.19 0.65 3.9 2.5 6.4 Donbass 12.72 1.99 14.71 23.12 7.69 30.81 Rostov North Caucasus0.52 0.04 0.56 5.2 0.9 6.1 Donbass 12.72 0.42 13.14 23.12 1.07 24W9 Saratov Volga Donbass 12.72 1.56 14.28 23.12 4.60 27_7* T b i l i s i North Caucasus0.7 0.8 1.5 Karadag 6.3 7.5 13.8 Donbass 12.72 2.22 14.94 23.12 5.02 28W¥ Sverdlovsl Central Asia 0.22 2.3 2.52 2.1 23.0 25.1 Kuzbass 7.44 3.05 10.49 Chelya-binsk 11.18 0.98 12.16 14.20 6.26 20-16 30.70 3.68 34-33 Minsk Western Ukraine 0.65 0.8 1.45 6.5 0.3 15.8 Donbass 12.72 2.54 15.26 L'vov-Volynsk 18.23 1.47 19.70 23.12 6.66 29.78 23.50 2.93 26-43 Kiev Western Ukraine 0.7 1.1 1.8 6.4 10.7 17.1 Donbass 12.72 1.45 14.17 23.12 4.56 27.6? Tashkent Central Asia 0.23 1.1 1.33 2.1 10.9 13.0 Kuzbass 7.44 5.60 13.04 Kara-ganda 8.38 4.03 12.41 14.20 12.82 27^ 02 16.69 5.51 22W0 Alma-Ata Central Asia 0.23 3.1 3.33 2.1 28.8 30.9 Kuzbass 7.44 3.05 10.49 Kara-ganda 8.38 2.84 11.22 Ekibas-tuz 2.00 4.75 6.75 14.20 9.73 23-73 16.69 4.26 20-95 12.93 9.19 22-/2 Sources; For gas and coal: Yu. I. Bokserman: op. c i t . , (1964), p. 229. & 230. For peat : D. I. Maslakov; op. c i t . , p. 106. 243 Table VIII Cost indices of vinyl chloride in various regions Method of production Capital Outlay Projected costs in three types of re-gions(in percent) I I III 75 Hydrochlorination(with regen-eration of HCl) of acetylene produced by: a) high temperature pyrolysis 85 75 75 b) electric cracking 65 ---Prom dichlorethane and acety-lene in conjunction(acetylene made by pyrolysis) portion of acetylene:0.3 ton 90 105 105 portion of acetylene:0.2 ton 75 90 95 As above, with acetylene made by electric cracking portion of acetylene:0.3 ton 70 — - 110 portion of acetylene:0.2 ton 65 — - 100 Table EC Cost indices of acetaldehyde, produced from acetylene and ethylene, in various regions Method of production Capital Outlay Projected costs in three types of re-gions (in percent) II III Acetylene Hydration of acetylene, pro-duced by partial combustion of methane 100 Hydration of acetylene, pro-duced by electric cracking of methane 80 Hydration of acetylene, pro-duced by high temperature pyrolysis 110 Ethylene Dehydration of ethyl alcohol produced through hydration of ethylene 95 Straight oxydization of ethy-lene 95 130 85 100 100 100 105 120 165 60 70 90 Source; Khimicheskaya Promyshlennost1. Ho. 8, 1963, 244 Table X Projected costs and capital investment of acetylene in various regions (in percent) Central^ Volga Leningrad Middle Region Region&ft Asia End cost of acetylene 100 76 104 74 Cost of raw material (natural gas) 100 45 131 31 Energy costs 100 62 103 60 Capital investment for production of acetylene, 100 91 102 90 including output and transport of nat. gas A On basis of East Ukrainian AA On basis of East Ukrainian . and , gas Saratov gas. • Table XI Projected costs of olefins in various regions (in percent) Economic Regions Tentative end costs Expenditure on: raw material energy Leningrad* 100 Center 4 94 Volga (a)liquid petroleum products 77 (b)L.P.G.»s 60 North Qaucasus (a) petroleum products 94 (b) L.P.G.«s 70 East Siberia (Bashkir oil) 91 Par East* 127 Donets-Dnieper^* 101 Kazakhstan 98 100 90 79 45 111 63 121 163 121 105 probably from petroleum products. AA may be from condensates. Source: N. Fedorenko & A. Vayn: op. c i t . , Planovoye  Khozyaystvo, No. 5, 1964, p. 27, Table 4 and Table 3. 100 82 49 23 59 30 47 118 72 82 245 Table X I I Projected costs of vinyl chloride and vinyl acetate on the basis of acetylene from natural gas and acetylene plus ethylene from petroleum products (in percent) Vinyl chloride M Vinyl acetate A Economic From natural From petroleum From nat. From pet. Regions gas products gas products Leningrad 100 100 100 100 Center 88.3 99.2 88.1 92.0 Volga 68.8 80.4 72.2 79.7 North Caucasus 88.0 92.3 80.0 87.9 Central Asia 65.7 81.3 ' 71.2 85.8 West Siberia 78.9 85.1 East Siberia 67.8 82.9 71.0 83.3 Far East _ _ _ 111.4 114.2 Notes Percents may be compared only within vertical columns. Data for natural gas and petroleum products cannot be compared. it Vinyl chloride and vinyl acetate can be produced via acetylene as well as ethylene. It i s not shown in the table which route is chosen. The cheaper route is generally via ethylene, but this chemical cannot be produced from dry gas while acetylene can be made from any feedstock. One suspects that in the Volga and perhaps in the Center too, these f i g -ures were arrived at on the basis of LPG and not dry gas. This would allow production via ethylene, and would explain why cost i s no higher in the Center than in the North Caucasus, which is a major gas-producing area. Source; N. Fedorenko & A. Vayn: op. c i t . , "Planovoye  Khozyaystvo. 1964, No. 5, p. 28-29. 246 Table X I I I Projected Cost of Following Products; (i n percent) Two fflethyl V i n y l - Phenol Capro-Regions alcohol acetate lactone Central A s i a 100 100 100 100 East S i b e r i a 107 87.4 95.0 94.5 Source; 1ST. Fedorenko and A. Vayn: op. c i t . t  Planovoye Khozyaystvo, Ho. 5, 1964, p. 31. 247. SOURCES for MAPS Map 1. 2 & 5; Sources for Table III (p. 13) and Table VI (p.48); Oil and Gas Journal, June 8, 1964, p. 114; rtV gazprome SSSR," Gazovaya Promyshlennost*. Ho. 8, 1964, p. 44; Izvestiya, March 29, 1964, p. 5 and others. Map 4; E. J. Eohs: op. c i t . , American Assoc. of Petro-leum Geologists, Bulletin, Vol. 46, 1962, p. 1978-79. Modified. Map 5: Yu. I. Bokserman: op. c i t . . p. 95-143 and inset map between p. 68 and 69; H. K. Ham: op. c i t . , Gazovoye Delo, Ho. 5, 1963, p. 40-41; R. E. King; op. c i t . , American Assoc. of Petroleum Geologists, 1964, p. 1342; Oil and Gas Journal, June 8, 1964, p. 114; "V gazprome SSSR," Gazovaya Promyshlennost*. Ho. 3, 1964, p. 441; Izvestiya, March 29, 1964, p. 5 and March 15, 1965, p. 4, and others. Map 6: "Statisticheskiye Materialy," Vestnik S t a t i s t i k i . Ho. 5, 1962, p. 87 and 91; A Riznik, and S. Litvak: op.  c i t . . p. 17 and 24; Promyshlennost' SSSR. 1963. p. 191-217, passim; and D.I. Maslakov: op. c i t . . p. 146-167, passim. Maps 7-16: Eor these regional maps, various atlases and sketch maps were used as well as newspaper reports on construction of plants, power stations, etc. 

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