OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

[c1ue]

http://finance.yahoo.com/news/Putin-...1&asset=&ccode=

Prime Minister Vladimir Putin said Sunday that Russia will further delay the introduction of a higher export duty on raw timber that has deeply worried neighboring Finland.

Putin told an international meeting of forest producers in St.Petersburg that Russia will maintain the duty freeze because of a slump in demand amid international economic crisis.
"We will extend the moratorium on raising the export duty on raw timber to 2010," Putin said, adding that the freeze also may be extended into 2011.
Russia is the world's largest raw timber producer while Finland imports 80 percent of logs from Russia. In the past 15 years, Russia has gained some euro7 billion from its timber exports to Finland, according to Lesprom timber network.
Russia's government announced in 2006 that the export duty on raw timber would be increased more than three-fold to euro50 per cubic meter in 2008. The move was supposed to spur exports of processed timber with higher added value and lead the country away from exporting cheap rough wood.

From CIA factbook: Finland https://www.cia.gov/library/publicat...k/geos/fi.html

Industries:
metals and metal products, electronics, machinery and scientific instruments, shipbuilding, pulp and paper, foodstuffs, chemicals, textiles, clothing

Exports:
$96.62 billion (2008 est.) country comparison to the world: 37 $90.2 billion (2007 est.)
Exports - commodities:
electrical and optical equipment, machinery, transport equipment, paper and pulp, chemicals, basic metals; timber

Imports:
$87.51 billion (2008 est.) country comparison to the world: 38 $78.22 billion (2007 est.)
Imports - commodities:
foodstuffs, petroleum and petroleum products, chemicals, transport equipment, iron and steel, machinery, textile yarn and fabrics, grains
Imports - partners:
Russia 16.3%, Germany 15.7%, Sweden 13.6%, Netherlands 6.3%, China 5.1%, UK 4.2% (2008)

http://www.forest2market.com/f2m/us/...008-Oct-Russia

Russia is the third largest forest harvester in the world, after only the United States and Canada. Despite this ranking, the overall statistics for the forest industry in Russia do not look good: ¹

• Russia produces up to 150 million cubic meters of wood products annually, only about a third of the government’s estimated total annual allowable cut of 576 million cubic meters per year.
• Russia accounts for 22 percent of the world’s wood trade in terms of volume, but only 3 percent in terms of value.
• Russia has the capacity to process only 2 percent of its annual harvest; as a result of its minimal processing capacity, it exports logs instead of higher priced forest products, like paper, furniture, doors and windows.

...

Russia exported $2.9 billion of logs in 2005. A total of 81 percent of Russian logs went to these three countries—46 percent went to China, 22 percent to Finland, and 13 percent to Japan.

...

Finland, which receives 80 percent of its round wood supply from Russian forests, has been affected most directly by these changes.

http://www.finnfacts.com/english/company/forest.html

One quarter of Finland's export revenue is derived from the forest industries. 90 per cent of the paper made in Finland and 70 per cent of the sawmill products are exported, mainly to Western Europe.

I can see it now: Approve Nord Stream and we'll give you a break on wood export taxes.

Denmark is already on board:

http://www.spiegel.de/international/...656229,00.html

Denmark moved on Tuesday to provide Russian gas giant Gazprom with the go-ahead to lay a controversial pipeline through Danish waters in the Baltic Sea.

Who's left? Sweden. Very similar forestry position as Finland.

OWEC, OPEC and OGEC (Organization of Gas Exporting Countries): brothers in arms.

[cobben]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

Russia has been trying to coerce the big Finnish/Swedish paper companies into building paper plants in NW Russia, the Finns were dragging their feet in any way they could last I heard several years ago, not liking the idea of getting bogged down in Russian bureaucracy / corruption. Finland has a long tradition of working under the shadow of the Russian bear, they have deep connections in Russia. Finns designed & built the new train station in St. Petersburg for example, a quite magnificent construction.

Forestry & paper are I believe Sweden's biggest exports, Sweden is importing some from the Baltic countries, probably nothing from Russia. Several of the big Scandinavian paper companies (Stora Enso, etc.) might theoretically be able to influence Sweden's attitude towards the gas pipeline, but I doubt it.

I wonder how big the black market timber export from Russia is? Hearsay said it was considerable.

[c1ue]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

Forestry & paper are I believe Sweden's biggest exports, Sweden is importing some from the Baltic countries, probably nothing from Russia. Several of the big Scandinavian paper companies (Stora Enso, etc.) might theoretically be able to influence Sweden's attitude towards the gas pipeline, but I doubt it.

Some statistics from http://www.ssd.scb.se/databaser/makro/SaveShow.asp

Imports and exports of goods by commodity groups Prod-SNI97 and trading partner by products Prod-SNI97, period and observations
	1998
	Imports of goods from country of consignement, SEK thousand	Exports of goods to country of destination, SEK thousand
20.5 industry for other products of wood; industry for articles of cork, straw, cane etc.	613027	713476
20.1 Wood, sawn, planed or impregnated	1386750	18091113
20.2 Veneer sheets, plywood, laminboard, particle board, fibre board etc.	2021458	2457120
21.1 Pulp, paper and paperboard	5406653	58829251
36.1 Furniture	6457595	10189249

Imports and exports of goods, not adjusted for non response by trading partner, Commodity group SITC, period and observations
	1998
	Imports of goods from country of consignement,SEK thousand	Exports of goods to countries of destination, SEK thousand
Finland
247 wood in the rough or roughly squared	154567	6565
251 pulp and waste paper	280299	140112
634 veneers, plywood, particle board etc	484581	69179
635 wood manufactures, n.e.s.	116520	199240
641 paper and paperboard	1193834	1014548

Imports and exports of goods, not adjusted for non response by trading partner, Commodity group SITC, period and observations
	1998
	Imports of goods from country of consignement,SEK thousand	Exports of goods to countries of destination, SEK thousand
Russian Federation
247 wood in the rough or roughly squared	751418	0
251 pulp and waste paper	0	40276
634 veneers, plywood, particle board etc	72694	6940
635 wood manufactures, n.e.s.	15370	118419
641 paper and paperboard	42637	126216

It would appear that a considerable amount of Russian wood products may be coming through Finland - if the direct trade numbers between Finland and Sweden are any indication.

The trade with Russia is low in SEK numbers - but then again that is unsurprising given raw wood is the primary import in question.

The web site above is really difficult to use for larger picture activity - I have yet to discover a way to get overall trade numbers to put these into context.

But 20 billion Swedish Kr worth of wood related exports in 1998 doesn't seem to be peanuts...

[c1ue]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

Well, it sure didn't take long for Sweden to toe the line:

http://www.yle.fi/uutiset/news/2009/...e_1139253.html

The government on Thursday approved the construction of the Nord Stream undersea natural gas pipeline. The 1,220 kilometre pipeline’s planned route crosses Finland’s territorial waters.

Government’s approval comes with the caveat that Nord Stream must strive to prevent and minimise any possible damage to the marine environment.
“Moreover, the project must be implemented so as not to prevent any future energy, data communications or other infrastructure projects, even if they would intersect with the gas pipelines within Finland's exclusive economic zone," the government said in a statement.
However the final decision lies with the West Finland Regional Environment Centre, which is expected to make the final permit decision by January.
Delivering Russian gas to the EU
The pipeline is to run from Vyborg, Russia to Greifswald, Germany. Two German energy companies have joined forces with Russia's Gazprom for the project.
The pipeline aims to deliver Russian natural gas deposits to the European gas network. Natural gas will be delivered via Germany to Denmark, the Netherlands, Belgium, Great Britain, France, Poland and the Czech Republic at least.
The pipeline will pass through the territorial waters of five states. Approximately 375 km of the route will lie within Finland's exclusive economic zone.
Sweden also approved the pipeline project on Thursday.

[cobben]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

"Sweden to toe the line"

Note that Sweden just gave permission for the pipeline to be built through Swedish waters, after having collected all sorts of "encouragements" (refurbishing of a port on Gotland, etc., I have not kept track of this). Sweden will not be buying any of the gas at all.

[c1ue]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

Note that Sweden just gave permission for the pipeline to be built through Swedish waters, after having collected all sorts of "encouragements" (refurbishing of a port on Gotland, etc., I have not kept track of this). Sweden will not be buying any of the gas at all.

Your statement only underscores the reality.

Sweden as an intermediary via a pumping station or whatever has some economic stake in the pipeline.

Sweden as a passthrough for natural gas on the way to Germany gets nothing. Furthermore all the Baltics, Ukraine, etc who are going to equally get bypassed also get nothing.

[cobben]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

"Sweden as an intermediary via a pumping station or whatever"

The pipeline runs in the Baltic Sea near the island of Gotland, Sweden has nothing at all to do with it as far as I have heard other than giving permission, and indirectly making some money through the use of some ports for the construction work.

The CIS countries already have Russian gas pipelines, have you looked at where Ukraine is located?
The Baltics all border on Russia, Latvia for example earns big money by storing Russian gas in a sand dome facility, I've heard that it more than pays for the Latvian gas imports.

[c1ue]

The pipeline runs in the Baltic Sea near the island of Gotland, Sweden has nothing at all to do with it as far as I have heard other than giving permission, and indirectly making some money through the use of some ports for the construction work.

The CIS countries already have Russian gas pipelines, have you looked at where Ukraine is located?
The Baltics all border on Russia, Latvia for example earns big money by storing Russian gas in a sand dome facility, I've heard that it more than pays for the Latvian gas imports.

The original Nord Stream offer was to put a pumping station in Swedish territory. Sweden didn't want it and used it as an excuse for 'environmental damages' to hold up the project.

Now the project is approved, also Sweden has talked itself out of any stake in it.

As for the Ukraine - the nearly annual natural gas payment crises are clearly the motivator for Nord Stream. Surely I don't have to explain on that further? As the Ukraine was the primary transit point for Russian natural gas to reach EU customers, the Ukraine has been holding this capability hostage in return for continued low natural gas prices despite its political shift towards the US sphere.

Nord Stream also will be supplied from the same sources as the Baltics; previously the Baltics (and domestic western Russia) were the only outlets for these fields - except via a tortuous routing through the Ukraine.

With Nord Stream, Russia now has less economic reason to continue the Baltic natural gas subsidies: there is a direct option to sell to Europe vs. the Baltics. Either prices rise in the Baltics or supplies will fall.

Finally the gas storage: yes, the gas storage was historically useful due to the outlet profile previously mentioned.

But with Nord Stream, the need for this storage will be put in question.

[VIT]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

There is a thread at this time with the anecdote about Russian man wishes the death of his neighbor's cow. These Baltic states and some others are no different with their relation to Russia. I do not care too much since that is their problem, but I guarantee when the time passes and they will realize how stupid their policy was they start blaming Russia that it bypassed them by "evil" will. Sure they will not look on themselfs.

Like Americans like to say win-win, this all development is lose-lose case. It makes me sick, talking about cooperation and making this kind of projects real.

*Recently Ukrainian president Ushenko said they will print more money to pay for Russian gas. What a sh...

[cobben]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

"As for the Ukraine - the nearly annual natural gas payment crises are clearly the motivator for Nord Stream."

Of course, I was assuming you were looking at who would have access to supply from the pipeline.

Russia will certainly continue to sell gas to anyone willing & able to pay for it, I see this as a non-event for the Baltics. The demise of Russian oil products exports through Ventspils in Latvia has been predicted off and on for some time, hasn't happened. The Russians are simply as they openly declared diversifying their possible export routes so no one port (also their own ports) can practice undue extortion.

[c1ue]

Re: OWEC? (Organization of Wood Exporting Countries) or Why Nord Stream is going to happen

One more domino has fallen: Germany approves Nord Stream

http://www.nord-stream.com/en/

Germany approves Nord Stream Pipeline

• Federal Maritime and Hydrographic Agency (BSH) grants Nord Stream AG the second and final permit for Exclusive Economic Zone
• Only the second Finnish permit outstanding

Zug,
28 December 2009.
Nord Stream AG today received the permit to construct the 31 kilometre section of the natural gas pipeline in Germany’s Exclusive Economic Zone. The permit was granted by the Federal Maritime and Hydrographic Agency (BSH) in Hamburg. This second and final German permit leaves only the second Finnish permit outstanding. The consortium had already received permits from Denmark, Sweden and Russia through whose waters the pipeline will pass, as well as the Finnish EEZ permit and the permit for the 50 kilometre section of the pipeline in German territorial waters and landfall in Lubmin near Greifswald.
"We are firmly on schedule to start construction of the pipeline in spring 2010 and to start transporting gas in 2011", said Nord Stream’s Managing Director Matthias Warnig.
When completed in 2012, Nord Stream will be able to transport 55 billion cubic metres of gas per year from Russia to Germany, where it will be connected to the European energy grid. Gazprom has already signed long-term contracts to supply gas through Nord Stream to customers in several EU countries including Germany, Denmark, The Netherlands, Belgium, France and The United Kingdom.

One left to go...