Russian gas industry and its effects on people environment and business - Research Paper Example

Environmental problems are of a great challenge to Russia’s citizens and the economy causing among others, respiratory and gastrointestinal illness, budgetary strains, reduction of labor productivity and damaging natural resources. This paper focusses on the Russian gas industry and its effects on people environment and business. Russia boasts of holding the largest natural gas reserves with 1, 688 trillion cubic feet as per 2013 reports, a figure that accounts for about a quarter of the world’s total proven reserves.

Most of Russia’s reserves are situated in Siberia, Urengoy and Medvezh’ye that account for almost 40% of the country’s total reserves as other reserves are located in the northern Russia (Miller, 2013). Looking at the gas sector organization, the state run Gazprom dominates Russia’s upstream and produces almost 74% of the Russia’s output and further controls more than 65% of proven reserves (World Watch Institute, 2014). Independent producers such as Novatek and LUKoil have also significantly gained and enhanced Russia’s production even though upstream opportunities are narrowed.

However, the Gazprom’s monopoly on the Russia’s gas export is on the verge of ending as per the government’s plans. Most of Russia’s natural gas reserve under development and production are in the upper part of Western Siberia although Gazpron is investing in new regions such as the Yamal Peninsula to bring gas deposits into the areas. The renown prolific fields in Siberia include Yamburg , Urengoy and Medvezh’ye that are licensed by Gazpron although the three fields have recorded output declines in the recent years (Miller, 2013).

The higher production rate of natural gas in Russia has been triggered by the many companies entering the gas industry such as oil companies preempting to develop their gas reserve. The government is also trying to reduce the ever increasing gas