In a few quick decisions, President Vladimir Putin has devastated Russia's energy policy. This daring radical change of strategy will primarily hit state revenues. The essence of these policy changes is renationalization, a massive increase in capital expenditure and reduced efficiency. For years, Gazprom has carried out too large capital expenditures, 70 percent of which investment analysts euphemistically with call "value detraction," which really means corruption or waste. Now, Putin has decided to drive it to new heights. This month, Gazprom went ahead with its South Stream project, which is supposed to cost $20 billion, but will probably cost twice as much. Its sole purpose is to circumvent Ukraine. For the same reason, Gazprom plans to build two more Nord Stream pipes at a cost of probably $20 billion, but neither is needed. On top of this comes the massive investment program in Yamal. None of this adds any value.