The prospect of 100% market share in any industry is enough to make entrepreneurs, companies, and even countries salivate.
Russia's Gazprom and its assertive tendencies have earned it the welcome of a wolf in a sheep flock.
This week, the G8 meeting of finance ministers in Moscow will bring about a continental conversation on the future of Russia's resource leviathan.
It all raises a pressing question for the world's energy markets: do totalitarian regimes breed monopolies, even after the political system changes?
Though Russia is no longer the Soviet Union, the tendency towards centralized government control is still strong, and the opening of European markets to that heavy Muscovite hand is as scary to the EU as China's CNOOC is to the US Congress.
Last month, Gazprom stirred the waters of European energy security when its leadership decided to cut off natural gas flow to Ukraine after Kiev refused a 4x price increase.
This dealt a major blow to Russia's public façade of European energy steward.
A Pictureless Frame
Following the collapse of the Soviet Union, the European community set quickly to work that would ensure the energy security of Russia, her former Soviet sisters, and Eastern Bloc satellites while integrating them into a market system.
Russia balked at the resulting European Energy Charter, and many blame the Russia-Ukraine debacle on the lack of a stable framework for resolving such disputes.
You see, when Russia turned down the pressure in their pipeline to Ukraine, they also strained the supplies of every country west of Ukraine - the EU was not pleased.
Now, after demonstrating their own capriciousness and making Europe question Russian competence in doling out Europe's largest gas and oil reserves, Gazprom movers and shakers want to take operations international on a broader scale.
Gazprom has recently made overtures to Brazil, Turkey, Greece, and other countries that might eventually constitute part of a web of Gazprom pipelines and barges.
In Turkey, Gazprom hopes to broker a deal that would see Gazprom pipe laid across the country as a conduit to southern Italy and Greece, as well as south of Turkey to Syria, Lebanon, Israel, and elsewhere. This could easily land Russia a heavy stake in Middle Eastern politics, where President Putin has already dabbled as part of the Quartet negotiating for Israeli-Palestinian peace under the "Road Map."
Big and Hungry
Russia holds the world's 3rd largest oil and gas reserves behind Iran and Saudi Arabia. Where CNOOC wants oil control, Gazprom wants and largely already has gas control.
Gazprom controls about 60% of Russian oil and gas and produces a full 90% of Russian gas. By Gazprom's own estimates, the company is responsible for 8% of Russia's GDP, but we know that the giant is more heavily responsible for the country's 6% economic growth by generating 50% of Russia's electricity.
With the UK's Centrica PLC on the auction block, Gazprom's size and appetite are worrisome to UK Energy Minister Malcolm Wicks:
"It would look a bit odd if, in a few years' time this market resembled a monolithic oligopoly with a few companies state-owned, but not by Britain."
Wicks has also indicated that, as the US did to CNOOC's Unocal bid, the UK would be more than likely to block a Gazprom acquisition of Centrica.
The G8 meeting in Moscow and its preceding buzz has put Russia on the defensive somewhat. Russian national and Gazprom officials are indicating openness to allowing independent gas producers access to its supply routes. Currently only 15% of Russian production is non-Gazprom, and none of those firms have access to European markets.
If competition is the rule in the new Europe, Russia is a paradox - both domestic monopoly and international competitor. European energy and finance ministers are dealing carefully with Russia for now, but they are clear that the monopolistic status quo will not suffice for long.
Oh, and by the way, the rumor in Red Square is that once Vladimir Putin finishes his time at the Kremlin, he has his eyes on the executive chair of Gazprom. He will not show his cards easily.
Sitting Here in Limbo
Both nature and economies abhor a vacuum. The political transition of the USSR to Russian Federation was not magic, and neither is the reconstitution of dead markets.
The USSR maintained state control over resources. Once the market economy became possible, it was nevertheless impossible for state-owned enterprises to be auctioned off to a populace whose idea of entrepreneurship was trading watches for wiper blades.
Russia is still in a state of transition, and this limbo could become hell if a Russia-specific mechanism for open, market-based energy pricing and supply is not devised.
Sam Hopkins
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