As the Christian Science Monitor reported last September, one of the best perks of living in Venezuela is paying 7 U.S. cents a liter - or less than a quarter per gallon - every time you fill up. A telephone call to our sources in Moscow (it was 2 a.m. there) confirmed that Russians are paying 80 cents a liter for medium grade gasoline, or roughly the same $3 a gallon we're paying here in Seattle. Our readers should also know that the quality of Russian gasoline, for reasons we previously discussed here, is generally lower than American petrol. Russians also pay far more as a share of their income at the pump than we do.

As for the other subsidies Russians allegedly receive from fat oil revenues, Putin's government has actually been cutting back on basic services, by ending free public transportation for the elderly, and has announced plans to cut 20% of scientists already meager salaries from the federal payroll. Clearly the oil and gas money isn't being used to directly bribe the Russian people into thinking that Putin is a benevolent Czar.

Boot goes on to mention the windfalls reaped by Kuwait, the United Arab Emirates, and Saudi Arabia from higher world oil prices. Unfortunately, an LA Times reader unfamiliar with OPEC would just assume that Russia was also a member of the Arab and Iranian dominated oil cartel, when it is not. I say all this as someone who has regularly enjoyed Max Boot's articles.

These errors based on stereotypes about Russia are unfortunate, because there is a strong case to be made against the state-directed (Gazprom) model of energy development. Since a growing share of the world's proven reserves are now controlled by state-owned cartels and monopolies, there is a legitimate question of whether governments have an incentive to inflate their energy reserves, and could get away with this for a much greater period of time than any privately held multinational like Exxon or BP. Last year Twilight in the Desert, a book written by maverick Houston oil analyst Matt Simmons, disturbed investors by claiming that Saudi Aramco is lying about how much oil is left in the Kingdom. Peak oil enthusiasts, who want the U.S. and other leading economies to radically restructure their energy use and development, are also insisting that the world is running out of oil and we are doomed to a global depression unless we adopt draconian policies - of course, many experts insisted that the world was running out in the 1970s after the Arab oil embargo.

However, Russia is not bound by OPEC quotas, and soon will surpass Saudi Arabia as the world's leading producer of oil. More importantly, Americans don't have to worry about Russian petrodollars going to fund terrorists. Russia has the largest natural gas reserves in the world and can ship LNG to the U.S. in just nine days. Russia cannot easily ramp up production however, without more investment and modernization. Clearly Russia and America need each other, which is why we are so passionate about correcting misinformation that damages the prospect for better relations between our two countries. Russia is not like Iran or Sudan where there is a serious national security and egregious human rights dilemma for investors. If politics pushes American investment away from Russia's energy markets, China will be more than happy to seize the opportunities we abandoned.

UPDATE: While we're on the topic of the perils of state control of energy resources in a global economy, the oil and gas industry website RigZone notes today that Petroleos de Venezuela (PDVSA) is buying 100,000 barrels crude from Russia to meet its obligations (i.e. contracts Chavez signed to practically give away oil for political reasons). This in a country, like Iran (soon to be one of the world's leading importers of gasoline while exporting crude!), sitting on a sea of oil. Apparently Venezuela is no longer just importing weapons from Russia. Compared to PDVSA and Iran's state oil company, Gazprom is a model of efficiency.