Summary

Siberia is considered by most to be a remote and frozen wasteland. It covers 13.1 million square kilometers (5.1 million square miles) — almost 10 percent of the Earth's land surface — but with only about three people for every square kilometer, it has one of the world's lowest population densities. It has numerous mountain ranges, such as the Urals and Altai, rivers that flow into the Arctic Ocean when they are not frozen, and a generally cold climate with long winters and short summers.

These geographic and climatic features have been significant barriers to the economic development of Siberia, but the region still serves an important strategic function for Russia. First, control of Siberia provides Russia a buffer against the Eurasian steppes, one of two traditional routes of invasion (the other is the North European Plain, the route used by Napoleon's and Hitler's forces). Siberia is also a strategic redoubt for Russia during invasions from the west. But in the present day, with Russia neither at war nor seriously threatened from either direction, the significance of Siberia lies more in its wealth of natural resources.

Development of Siberia

For millennia, various nomadic Mongol and Turkic groups, such as the Buryats, Tuvinians, Yakuts and Tatars, occupied Siberia. The Mongols conquered a large part of Siberia in the early 13th century, and late in the 14th century the autonomous Siberian Khanate was established after the breakup of the Golden Horde, the western section of the Mongol Empire.

In the 16th century, a resurgent Russian state (then the Grand Duchy of Muscovy) began to undermine the Siberian Khanate from the west. Driven by an interest in acquiring furs and other resources, Russian traders and Cossacks began to enter the area. Soon the Russian army started to set up forts farther east to secure and extend the state's economic exploits. By the mid-17th century, Russia's control of Siberia extended to the Pacific Ocean.

The first great modern change to Siberia came between 1891 and 1916 with the construction of the Trans-Siberian railway, which further expanded Russia's trade routes and improved the Russian military's ability to deploy eastward. From 1801 to 1914, an estimated 7 million settlers moved from European Russia to Siberia, 85 percent of them during the quarter century before World War I. The region then became an important resource extraction and production base as the Russian Empire gave way to the Soviet Union, which began a full-scale process of industrialization. It was under the leadership of Stalin that one-industry towns such as Magnitogorsk, Norilsk and Zlatoust began to appear in Siberia.

Siberia has long had economic value for Russia. Although most of its territory is frigid, the climate of southwest Siberia is more moderate and contains a more-fertile black soil. Wheat, barley, rye and potatoes are grown here in large numbers, and many sheep and cattle are raised in the region.

But it was the development of Soviet industry in the latter half of the 20th century that made Siberia crucial to Russia's emergence as a major regional — and eventually global — power. Siberia has some of the world's largest deposits of nickel, gold, lead, coal, molybdenum, gypsum, diamonds, diopside, silver and zinc and is a leading producer and exporter of these minerals. For example, Russia has about 40 percent of the world's known resources of nickel at the Norilsk deposit in Siberia, and Norilsk Nickel is Russia's largest mining company and the world's biggest producer of nickel and palladium. Russia is also the fourth-ranked steel producer after China, Japan and the United States and was tied with Japan as the leading steel exporter in 2011.

The production and export of these minerals makes up a major part of Russia's economy (approximately 3-4 percent of gross domestic product, or GDP), but Russia draws its real significance — economic and geopolitical — from its oil and natural gas resources. Most of Russia's oil production (10.3 million barrels per day) comes from western Siberia, more specifically the Priobskoye, Prirazlomnoye, Mamontovskoye, Malobalykskoye and Surgut fields. The Sakhalin oil fields in the Far East also contribute to Russian oil production, in addition to other areas outside of Siberia (Tatarstan, Bashkortostan and the North Caucasus). As of early 2012, Russian oil exports were at a post-Soviet high of 5.1 million barrels per day.

Russia also boasts the world's largest natural gas reserves at 45 trillion cubic meters, which is about a quarter of the world's total proven reserves. The majority of these reserves are located in Siberia; the Yamburg, Urgengoy and Medvezh'ye fields alone account for about 45 percent of Russia's total reserves and are all licensed to Gazprom, Russia's state-run natural gas exploration and production company. As for natural gas production, about 95 percent of Russia's is done in Siberia.

Natural Resources and Russian Strategy

Since the Soviet Union's collapse, Russia's natural resources have played a huge role in driving the country's economic growth. From 2000 to 2008, Russia's GDP averaged 7 percent growth. After a brief contraction during the global financial crisis, which severely affected the Russian economy because of its dependence on exports of raw materials, growth has returned since 2010. In 2011, revenues from oil and natural gas exports made up 50 percent of Russia's budget.

These resources, particularly oil and natural gas, are important not only as sources of revenue for the Russian state but also as levers in Russian foreign policy. This is especially true with Europe, where Russia provides roughly a quarter of the energy supply. Natural gas is of particular importance because Russia dominates not only the supply but also the distribution network, especially in Central and Eastern Europe.

Russia has an extensive energy distribution and export pipeline network, the latter of which it began to develop in the 1970s during the thaw in Soviet-Western relations. Druzhba is Russia's largest oil pipeline, while major natural gas pipelines include the Yamal-Europe I, Northern Lights, Soyuz and Bratrstvo, all of which carry Russian natural gas to Eastern and Western European markets via Ukraine and/or Belarus. The Nord Stream pipeline, which avoids transit states bothersome to Russia, such as Ukraine, and traverses the Baltic Sea straight to Germany, has recently come online in Western Europe, and Russia is laying the groundwork to begin construction by the end of 2012 on another energy project, South Stream, which will traverse the Black Sea.

Many Central and Eastern Europeans are completely dependent on Russia for their natural gas consumption, but even some major players, such as Germany, Italy and Turkey, are quite dependent on Russian natural gas supplies. Russia has used this dependence to its advantage, whether establishing close commercial and political relationships with the likes of Germany and Italy or cutting supplies to gain political concessions as it did in Ukraine in 2006 and 2009, Lithuania in 2006 and Belarus in 2010. These cutoffs are a reminder that Russia's interests must be considered on any strategic issues (for instance, when Ukraine is friendly with the West), while Russia's energy position in Germany, Italy, France and other countries has created an opening for Moscow to be more active in European energy matters — and, by extension, political and security matters.

Importance of East Asia

Between 75 and 85 percent of Russia's oil exports currently go to Europe, but exports of Russian oil to East Asia have begun to increase as well. And Moscow and Beijing in 2009 commissioned the Eastern Siberia-Pacific Ocean oil pipeline, which has a capacity of 600,000 barrels per day. The development of energy ties with East Asia, such as developing untapped oil reserves in eastern Siberia and Sakhalin and natural gas reserves in central Siberia, appears to be increasingly important for Russia. This is especially true because consumption of minerals and energy resources in East Asia, especially in China, is growing.

Two trends in Europe have demonstrated to Russia the importance of building closer energy ties with East Asia. The first is that European energy consumption, for demographic and economic reasons, is reaching its peak. The second is that many European countries are in the process of diversifying their energy inputs, to the detriment of Russian energy exports.

Although major "Southern Corridor" projects like Nabucco — projects that are intended to build infrastructure around Russia — have not met expectations, other energy inputs are starting to chip away at Gazprom's market share. Particularly important is the growth of liquefied natural gas (LNG), which has come to represent 30 percent of the global natural gas supply. Already several LNG import terminals have come online in Western Europe, and for the first time Central and Eastern European countries, namely Poland and Lithuania, have made significant progress in securing LNG import structures.

In the meantime, the EU Third Energy Package, which seeks to unbundle supply, distribution and sales of energy assets, threatens Russia's position in many European countries, where Gazprom is dominant in both supply and distribution. The Asian market is a promising but relatively new one for Russia, while the European market will continue to challenge the leverage that Russia has spent the past few decades creating. Regardless of how Russia's energy policy develops, Siberia will remain a crucial part of the Russian state as both a buffer zone and a resource base.