Russian politicians and media are preoccupied with the same problem as their counterparts in the U.S. - "skyrocketing gasoline prices". As in the U.S., the problem is not simply of demand temporarily outstripping supply, but one of politics and geography.

Thanks to Hurricanes Katrina and Rita, most news watchers now know that the bulk of U.S. oil and gas production occurs in the Gulf of Mexico, as does a dispraportionate share of American refining (since refineries are easier to expand in the business friendly southern Gulf states than on the Atlantic or Pacific coasts). Less reported has been the problem of fields in Oklahoma and the Gulf that once were prolific now yielding less gas, driving exploration into deeper waters and geologic formations. And that's before we discuss the environmental rules that keep many rich fields on the Atlantic coast, the Rocky Mountains and Alaska offline.

Russia's geographic/political problem in contrast, is not complacency and the NIMBY syndrome but a corrupt culture that was not transparent enough to use the massive foreign investment necessary to get oil and gas from Siberia, the Caspian and Arctic seas to markets.

On the positive side, Russia's difficulties are actually a sign of real economic gains at home and greater connectivity with the world. High domestic demand for gasoline and electricity is solid proof that Russia's rising GDP is real, and cannot simply be chalked up to greater energy exports. Money that in the Nineties would come in for raw materials and go abroad for imported luxury goods may actually be coming back to Russia.

Conoco Phillips' full page ad in the Wall Street Journal today boasted about its push to open up gas fields in Russia. In case anyone needed further proof that the Cold War is dead, liquified natural gas (LNG) tankers will soon be plying their trade along sealanes once reserved for the Red Banner Northern Fleet of Tom Clancy fame. American oil men are already working with their Russian counterparts in a region that the U.S. Navy once only beheld through periscopes and satellite photographs. How fitting that both Murmansk and Vladivostok might become bustling ports again thanks to global capitalism.

But as noted previously here, Russia's track record of giving foreign investors real returns on their investment and attracting more capital in the 1990s was poor, worse even than the politically unstable kleptocracies of West Africa.