The conference "New Generation: 'Second Coal Wave', the Gas Market and the Reform of Thermal Electrical Engineering" was held in Moscow in December 2006. It was organized by the Export RA rating agency and the Expert analytical center with the support of the Ministry of Industry and Energy of the Russian Federation. Its participants proceeded from the fact that the shortage of power generating capacities is increasingly felt in the country with the gap growing ever wider between the requirements of electric and thermal power and the potential for its generation. Methane is now the predominant kind of fuel in Russia*. It accounts for 52 percent of the country's total power consumption and for 68 percent in heat generation. This Russia's indicator is eight times higher than that of Germany and six times higher than that of the USA. Apart from the climatic and geographic factors, this difference is attributable to wasteful production methods and consumption of cheap natural fuel in this country. However, its sources are not inexhaustible and will soon diminish. Gas production at Gazprom's basic gas fields- Medvezhy, Urengoy, Yamburg and Zapolyarny - reached its peak in the early 1990s, while, according to forecasts, it will drop 3 to 7 times by 2012. Anyway, in the short-term perspective (until 2010) Gazprom will not only preserve its former indicators but also raise gas production from 548 to 560 bin m3 by operation of small gas fields. While new large gas fields that may compensate for a lower gas production level after 2010 are located in regions of austere climate lacking the required infrastructure (the Shtokman, Yamal, and East Siberian gas fields). There are also some other reserves for the output of raw fuel, i.e., from associate gas (up to 30 bin m ) and from independent producers (up to 180 bin m ). True, the latter are hampered by the limited carrying capacity and a high degree of fixed assets wear and tear (about 60 percent) of the country's ... Read more