We lost Bulgaria. We are likely soon to lose the Czech Republic. We gained Ukraine. Poland has always stood with us. Germany hedges its bets. France definitely is not with us. The United Kingdom probably will side with us. The Baltic States would love to join us if they have the resources. A fierce battle rages over Romania.
The adversary is Russia, a petro-state that projects power through control of the European energy market. President Vladimir Putin’s regime depends on selling hydrocarbons. That pays for the Russian state and for a patronage system that keeps his supporters and backers in clover.
Many of Gazprom’s decisions are political. It pays for long pipelines to bypass Ukraine. Political appointments and scams are costly. Analysts estimate that Gazprom needs to charge about $12 per 1,000 cubic feet of natural gas to break even. It collects about $16 per 1,000 cubic feet in Eastern Europe. In the United States, the cost is about $2.
The price of natural gas in America dropped because hydraulic fracturing glutted the market with cheap gas. There are no such commercial wells in Europe.
If hydraulic fracturing can be used on a commercial scale in Europe, the price of natural gas there will plummet. It could force Russia to start working for a living and would have radical political repercussions.
The holy grail for Gazprom is a European Union-wide ban or moratorium on the technology. The more countries adopt such restrictions, the stronger the case for it would be in Brussels, capital of the EU, and Strasbourg, seat of the European Parliament.
The challenge facing Gazprom is to convince nations that pay it exorbitant sums of foreign currency to forgo a technology that can save them a lot of money, create local jobs and support their political independence. This challenge is not unlike the task the Soviet Union faced after World War II: The United States offered the devastated countries of Europe substantial free economic aid in the Marshall Plan. Fearing economic and political independence, the Soviets had to persuade Europeans to give up free money.
Some Czech anti-hydraulic-fracturing demonstrators, who protested against granting concessions to Hutton Energy, an Australian company headquartered in London, carried signs proclaiming, “We do not want your American money.” They could have dusted off similar signs from 1947.
This time, the mobilizing ideology is not anti-capitalism but environmentalism. Russia’s Mr. Putin has become a great champion of other countries’ environments. Gazprom and Russia pay directly or indirectly, through public-relations firms and environmentalist groups, for the creation of grand coalitions with authentic environmentalist groups. As in the national fronts of post-World War II Europe that paved the way for communist takeovers, the groups that are loyal to Moscow control the coalitions. Such organizations do not, for example, criticize nuclear power as long as it is provided by Russia or condemn the effect of drilling in Siberia on the Russian environment.
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Hopefully somebody shows this article also to Gazprom´s latest recruitment in Europe, German football legend Franz Beckenbauer!