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  • Petrostate: Putin, Power, and the New Russia
  • Paul Josephson (bio)
Petrostate: Putin, Power, and the New Russia. By Marshall Goldman. New York: Oxford University Press, 2010. Pp. 256. $16.95.

In Petrostate Marshall Goldman discusses the high politics of the oil and gas industry in Russia (and the USSR) over the past 100 years. He focuses on the post-Soviet era in five of seven chapters. Goldman, a leading specialist [End Page 855] on the command economy and a veteran Sovietologist, has followed the economics and politics of the former USSR for decades; this book is one of many studies he has produced aimed at a popular audience. Here he considers the importance of resource development, especially energy wealth, in Russia’s ongoing effort to reassert superpower ambitions after the breakup of the USSR. He describes the centralization of power in Moscow and the reestablishment of a stable economy after an economic crisis in the late 1990s, for which Vladimir Putin has gained credit, rightly or wrongly. Putin strongly believes that mineral resources are the key to the nation’s future, and that the Russian government should reassert its control over them, even those where joint ventures or other arrangements have given multinationals a stake in Russian oil and gas.

For historians of technology, this book may be of interest here and there. Chapters 1 and 2 consider the Soviet period and the long history of oil exploration and production. Goldman offers some discussion of how Russia’s traditional “backwardness” in technology led to various innovations, but also to heavy reliance on the West. Still, the focus of this book is more the high politics of oil production, for example the role of oil as a diplomatic tool—the support of socialist Eastern Europe with subsidies and the efforts to punish Ukraine and Georgia for their Western turn by controlling gas pipeline deliveries, among other methods. This raises the specter of risks for European clients of Russian oil and gas. Finland, Estonia, Latvia, and Lithuania are totally reliant on Russian gas, Germany 38 percent, Turkey 64 percent, and Europe generally 26 percent.

Goldman discusses at length the transition from state industry under Soviet power to privatization and back to state domination, if not outright ownership, of the oil and gas industry. The privatization of the industry in the 1990s when no market mechanisms existed led to chaos. The assets were acquired by men—exclusively men—who happened to be in the right place at the right time politically, but were not necessarily good managers. They exploited resources, but avoided investment in surveys or technology. Recently, better geological exploration and equipment, including that based on Western technology, has helped the industry.

Goldman reveals the hazards of involvement for multinationals in Russian industry, with changing rules and tax provisions, and courts that have yet to learn the rule of law. He notes cultural differences, and even comments on a sense of paranoia and xenophobia among the Russians. Once the energy sector revitalized and Russia was no longer supplicant, then it no longer needed to offer the generous terms of earlier periods to encourage Western technology and know-how to develop fields. This led to the ongoing legal and quasi-legal efforts of the government to retake control of various companies. Goldman acknowledges that energy resources around the world have been nationalized, and that it is therefore a Russian right to do [End Page 856] so, but he, like many observers, believes that Russia needs to do this in a less peremptory and more lawful manner.

Petrostate is a good place to start to understand oil and gas in Russia. Goldman relies on English-language newspapers (Western and Russian), and also interviews. The narrative can be repetitious and disorganized, and the presence of scores of subheadings indicates that Goldman feels comfortable telling a story, but not necessarily providing analytical themes. For example, he refers to the Russian political culture of the oligarchs but does not explain its origin or evolution.

Paul Josephson

Paul Josephson is an associate professor of history at Colby College and the author of Would Trotsky Wear a Bluetooth? (2009) and Lenin’s Laureate (2010). He is currently...

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