Unfulfilled hopes
In the mid-1960s, the Soviet Union embarked on an unprecedented hydrocarbon megaproject - the development of unique oil and gas fields in Western Siberia. Few then believed that such an undertaking would be successful. The natural resources of Siberia were sealed in the impenetrable swamps of the deep taiga and harsh tundra. There is no infrastructure for hundreds of kilometers. Merciless climate - extreme temperatures, winds. Naturally, the question arose: will it be possible to conquer the Siberian storerooms? At first, skepticism prevailed.
The reality, however, surpassed the wildest expectations. In the shortest possible time, from scratch in the most difficult conditions, through the heroic efforts (and there is no other way to say) geologists, builders, transport workers, oil and gas workers, a new energy base of the country was created. By the mid-1980s, more than 60% of all-Union oil and more than 56% of gas were produced here. Thanks to the West Siberian project, the country has become a world energy leader. In 1975, the USSR produced almost 500 million tons of "black gold" and overtook the long-term champion in oil production - the United States.
For those who stood at the origins of the development of Western Siberia, a breakthrough to the richest oil and gas fields meant hopes for a bright future. People believed that their work would bring prosperity and prosperity to the country. American analysts also did not skimp on rosy forecasts. In 1972, for example, researchers L. Rocks and R. Rangon, under the influence of the "West Siberian epic", painted the prospects of the USSR in this way: in two decades the Soviet Union, remaining a superpowerful military power, will have the highest standard of living. They predicted the absence of any negative trends in the development of the USSR at least until 20001. As you know, history took a completely different path.
Two decades later, the Soviet Union surprised the world not with the highest standard of living, but with a systemic catastrophe, although historical experience testified that the discovery of powerful energy resources contributed to the qualitative renewal of industrially developed countries. For example, the English Industrial Revolution was made possible by access to Yorkshire and Welsh coal. The rapid development of the US economy and universal motorization were based on the rapid successes of the American oil industry in the first third of the 20th century. A powerful impetus for the development of France, impoverished after the Second World War, was the discovery of the unique Lakk sulfur-gas condensate field. And in the Soviet Union itself they remembered how the "black gold" of the Ural-Volga region helped the country to heal the terrible wounds of the Great Patriotic War …
What happened in the USSR? Why is the state, which annually produced more oil than any other country (20% of world production), was on the verge of historical collapse? How did it happen that oil turned from a "life-giving medicine" into a potent drug? Why didn't oil save the country from terrible shocks? And could she have done it?
On the construction of the main oil pipeline Photo: RIA Novosti
1973 Energy Crisis
The energy crisis in the West has been talked about since the early 1970s. Against the backdrop of rapidly growing energy consumption, there were occasional problems with the increase in oil supplies. The supply did not keep up with the demand, and the exporting countries, which united in the OPEC in 1960 and were "playing" on raising oil prices, added fuel to the fire.
In 1967, they first used such an instrument of pressure as an embargo. During the Six-Day Arab-Israeli War, Saudi Arabia, Kuwait, Iraq, Libya, Algeria banned the sending of oil to countries friendly to Israel - the United States, Great Britain and partly to Germany. However, the selective embargo could not be successful: the ban was easily overcome through third states.
In October 1973, the fourth Arab-Israeli War, known as the Yom Kippur War, began. To support Egypt and Syria, OPEC members again applied the oil embargo, only this time in a more thoughtful way. In addition to a complete ban on exports to the United States, the Netherlands, Portugal, South Africa and Rhodesia, the main thing was provided - a growing restriction on oil production - an initial reduction and an additional 5% every month. The reaction of the world market became immediate - more than a threefold increase in prices for oil and oil products. Panic began in the countries - importers of "black gold".
The energy crisis had far-reaching consequences. Over the years, it is spoken of as the beginning of the restructuring of the post-war economies of Western countries, a powerful impetus to a new stage of the scientific and technological revolution, an important, fundamental prerequisite for the transition from an industrial society to a post-industrial society in developed countries. From the height of the XXI century, one cannot but agree with this. But then everything seemed different - a drop in industrial production, a decrease in foreign trade turnover, a depressive state of the economy and a rise in prices.
Oil importing countries tried to find new reliable partners, but there were not so many options. In 1973, OPEC included Iran, Iraq, Kuwait, Saudi Arabia, UAE, Venezuela, Qatar, Indonesia, Libya, Algeria, Nigeria, Ecuador. Who could interfere with the trusteeship plans? The eyes of buyers (primarily European) were directed towards the Soviet Union, which in the 1970s was rapidly increasing oil production in Siberia. However, the situation was far from straightforward. In the confrontation between Israel and the Arab states, the USSR traditionally supported the latter. The question arose: would the Soviet Union want to play the oil card in an ideological vein - to join OPEC and blackmail the Western world with high prices for hydrocarbons? Difficult negotiations began.
The country's leadership appreciated the unique opportunities that the energy crisis opened up. The Soviet Union, despite the ideological rhetoric directed against the "Israeli military", took a principled position: we are not going to participate in the oil intimidation of Western countries (after all, the working people will suffer), but on the contrary, we are ready to help in every possible way in overcoming the energy crisis and become a reliable supplier energy resources, in particular oil2. Europe breathed a sigh of relief. A large-scale expansion of Soviet oil to the Western market began.
The first oil of the Samotlor oil field. 1965 year. Photo: TASS
A bit of history
There were different times in the history of oil exports of the USSR. Immediately after the end of the Civil War, the country struggled to increase the export of oil. By the end of the 1920s, exports of crude oil amounted to 525.9 thousand tons, and oil products - 5 million 592 thousand tons, which was several times higher than the level of exports in 1913. The Soviet power, desperately in need of foreign exchange, actively used oil as a significant source of funds for the renewal and development of the economy.
In the 1930s, the USSR almost gave up oil exports. The country was undergoing forced industrialization, an integral part of which was the all-round motorization of the national economy, unthinkable without significant volumes of petroleum products. Fundamental changes affected the army - aviation and tank formations developed, which also required fuel and lubricants. For several years, the country has reoriented its oil potential for domestic needs. In 1939, export supplies amounted to only 244 thousand tons of oil and 474 thousand tons of oil products.
After the end of World War II, the Soviet Union, despite its own limited capabilities (in 1945, oil production amounted to 19.4 million tons of oil, or 60% of the pre-war level), assumed obligations to supply oil to the countries of Eastern Europe that entered the socialist camp and were deprived of own sources of "black gold". At first, these were rather small volumes, but as the Volga-Ural oil and gas province - "Second Baku" was developed in the 1950s and the Soviet oil industry exploded (in 1955, oil production was 70.8 million tons, and after 10 years already 241.7 million tons), oil export figures began to rise. By the mid-1960s, the country exported 43.4 million tons of oil and 21 million tons of oil products. At the same time, the socialist camp remained the main consumer. Thus, within the framework of "mutually beneficial cooperation and fraternal assistance" in 1959-1964, an oil pipeline with the symbolic name "Friendship" was built, through which oil from the Ural-Volga region was transported to Hungary, Czechoslovakia, Poland and the GDR. Then it was the longest oil pipeline in the world - 4665 km, and the design capacity - 8.3 million tons.
By the way, it was at the end of the 1950s that a fundamental restructuring of the structure of Soviet oil exports took place. If before 1960 the supply of petroleum products prevailed, then after that it was already crude oil. Such a transformation is associated, on the one hand, with the lack of its own refining capacities (although 16 large refineries were built in the first post-war twenty years, oil production grew at an outstripping pace), on the other hand, with changes in the world trade in "black gold". In the early days of the oil industry, oil was not a subject of international trade. Crude oil deals were considered more exotic. They sold products of its processing, first lighting kerosene and lubricating oils, then - motor fuel. After World War II, the situation changed. Importing countries assessed profits and reoriented to import crude oil.
Irkutsk region. Here it is - the oil of the Verkhne-Chonskaya area! 1987 year. Photo: TASS
Petrodollars
After the 1973 energy crisis, the USSR rapidly increased the volume of oil exports to Western countries, which, unlike its allies in the socialist camp, were paid with freely convertible currency. From 1970 to 1980 this figure increased 1.5 times - from 44 to 63.6 million tons. In another five years it reached 80.7 million tons.3 And all this against the background of rapidly growing oil prices.
The volume of foreign exchange earnings of the USSR from oil exports is astounding. If in 1970 the revenue of the USSR was 1.05 billion dollars, then in 1975 it was already 3.72 billion dollars, and by 1980 it had increased to 15.74 billion dollars. Almost 15 times! This was a new factor in the country's development4.
It would seem that the development of Western Siberia and the world price environment provided favorable conditions for the internal development of the economy (due to high energy supply), and for its modernization due to export revenues. But it all went wrong. Why?
Fatal coincidence
In 1965, the beginning of the so-called Kosygin reform was announced in the country. The official wording is "improving planning and strengthening economic incentives." In fact, it was an attempt to introduce separate market regulators into the planning and administrative environment that began to slip, or, as they said at the time, to push forward economic management methods as opposed to the administrative approach. The enterprise was put at the forefront. Of course, everything had to happen within the framework of socialism. Nevertheless, the reform also had influential opponents, who considered the new trends to be ideologically dubious and dangerous. On L. I. Brezhnev was under pressure, but the Secretary General understood that nothing could be changed. The reform went on and brought the first results. However, in the early 1970s, due to internal contradictions, the question of whether to continue the reforms (first of all, the release of wholesale prices and the replacement of Gossnab with a market mechanism for wholesale trade) was ripe. And here petrodollars "inappropriately" poured into the country.
Under the influence of new financial sources, the Soviet political leadership developed a strong idea that now the most acute economic and social problems can be solved not by increasing the efficiency of the economic system, but by increasing revenues from oil and gas exports. The outlined path of updating the system was discarded. The choice seemed obvious. Why painful and dubious from an ideological point of view of transformations, when such financial revenues are available? Is the industry working poorly, there are not enough goods for the population? No problem! Let's buy them for currency! Things are getting worse in agriculture, collective and state farms are not coping? Not scary either! We will bring food from abroad! The foreign trade balance of those years is appalling. An ugly program - "oil for food and consumer goods"!
Oil transportation. Photo: RIA Novosti
"Bread is bad - give 3 million tons above the plan"
In the second half of the 1970s - early 1980s, in the view of the country's top leadership, there was a clear relationship between petrodollars and the provision of the population with food and consumer goods. Chairman of the Council of Ministers of the USSR A. N. Kosygin, who had direct contacts with the head of Glavtyumenneftegaz V. I. Muravlenko, personally addressed him with approximately the following requests: "With bread it is bad - give 3 million tons above the plan" 5. And the shortage of grain was solved by extracting 3 million tons of oil in excess of the already extremely tense plan.
Recently declassified working tapes of the Politburo meetings of the CPSU Central Committee provide interesting evidence of how senior management, when discussing hydrocarbon exports, directly linked it to food imports and purchases of consumer goods. So, for example, in May 1984, at a meeting of the Politburo, Chairman of the Council of Ministers of the USSR N. A. Tikhonov stated: "Most of the oil that we sell to capitalist countries is used to pay for food and some other goods. In this regard, it seems advisable, when developing a new five-year plan, to provide for a reserve for a possible additional supply of oil in the amount of 5-6 million. tons for five years "6.
The Soviet leadership did not want to listen to warnings that it was extremely dangerous to substitute imports for the work of the economy. The national economy worked worse and worse. Every year it became more and more difficult to ensure the already very modest standard of living of the population.
The most painful, of course, was the food issue. The crisis in agriculture has become an integral part of the party meetings of the Brezhnev era, starting with the March Plenum of the Central Committee of the CPSU in 1965. The government announced an increase in investment in agriculture, mechanization and electrification of production, land reclamation and chemicalization. But, despite this, agriculture and food industry could not meet the needs of the population. To feed people, more and more food was bought overseas. If in 1970 imported 2, 2 million tons of grain, then in 1975 - already 15, 9 million tons. By 1980, the purchase of grain increased to 27, 8 million tons, and five years later amounted to 44, 2 million tons. For 15 years - twenty-fold growth! Slowly but surely, the food shortage became alarming.
It was especially bad with meat and meat products. In Moscow, Leningrad, the capitals of the Union republics and some of the largest cities, they somehow managed to ensure an acceptable level of supply. But in other settlements … This is from those years a riddle about a grocery train: long, green, smells of sausage. Despite a sharp increase in meat imports (by the beginning of the 1980s, the country was buying almost a million tons!), Per capita consumption of meat grew only until the mid-1970s, and then practically stopped at the level of 40 kg per person. Colossal purchases of feed grains and direct imports of meat only compensated for the general collapse of agriculture.
The petrodollars could feed the people with imported products. At the counter with the products of the Polish company Photo: RIA Novosti
The picture was not the best with consumer goods. Light industry frankly did not cope with the installation: more goods, good and different! At first, they were worried about quality: “Huge reserves are laid in improving the quality and range of products, - noted at the XXV Congress of the CPSU held in 1976. - Last year, for example, the production of leather shoes amounted to about 700 million pairs - almost three pairs per person. And if the demand for footwear is not yet satisfied, then it is not a question of quantity, but a lack of high-quality fashionable footwear. Approximately the same is the case with many types of fabrics, sewing and haberdashery products "7. In the early 1980s, it was already a question of non-fulfillment of plans in terms of quantity: "It's a fact," they sadly stated at the XXVI Congress of the CPSU (1981), "that from year to year the plans for the release of many consumer goods, especially fabrics, knitwear, are not being fulfilled., leather shoes … "8 To dress and shoe people, they clicked on import. But as in the case of food, purchases only kept the already not very high level. Thus, per capita consumption of knitwear stopped at the level of 2, 1 items, and of footwear - 3, 2 pairs per person.
The most offensive thing was that, buying food and consumer goods for foreign currency, the Soviet leadership practically did not use oil and gas revenues for large-scale technological modernization. It would seem that under the conditions of the scientific and technological revolution, it was necessary to radically reorient imports and invest in modern equipment and technologies. But nothing of the kind happened. The disregard for world achievements in the development of computing technology had fatal consequences for the Soviet Union - it was in this area that those global changes took place, which subsequently led to the formation of the information society.
The 1970s were a time of missed opportunities for the Soviet Union. In the advanced countries, a structural restructuring of the economy was underway and the foundations of a post-industrial society were laid, in which the role of raw materials and resources was decreasing, and the USSR not only preserved the industrial model of development, but also formed a resource economy, where the country's dependence on hydrocarbons and the world price conjuncture was consistently growing. As the last decade of the existence of the USSR has shown, a one-sided focus on the hydrocarbon sector, which was entrusted with the task of compensating for the inefficiency of the national economy, turned out to be an extremely vulnerable position, unable to bring the country out of economic stagnation.
OIL EXPORT USSR (million tons)
Year Oil Oil products, recalculated
for oil Total
oil
export
1965 43, 4 32, 3 75, 7
1970 66, 8 44, 6 111, 4
1975 93, 1 57, 4 150, 5
1980 119 63, 5 182, 5
1985 117 76, 5 193, 5
1989 127, 3 88, 3 215, 6
Notes (edit)
1. Dyakonova I. A. Oil and Coal in the Energy Sector of Tsarist Russia in International Comparisons. M., 1999. S. 155.
2. Gromyko A. A. In the name of the triumph of Lenin's foreign policy: Selected speeches and articles. M., 1978. S. 330-340.
3. Hereinafter, we mean the export of oil and oil products converted to oil.
4. For more details see: M. V. Slavkina. Triumph and tragedy. The development of the oil and gas complex of the USSR in the 1960-1980s. M., 2002. S. 113-131.
5. Ibid. P. 193.
6. RGANI. F. 89. Op. 42. D. 66. L. 6.
7. XXV Congress of the CPSU: Verbatim report. T. 1. M., 1976. S. 78-79.
8. XXVI Congress of the CPSU: Verbatim report. T. 1. M., 1981. S. 66.
