The second week of Champions League last-16 action kicks off tonight, with a pair of very juicy matches indeed: Bayern Munich at Juventus and Barcelona at Arsenal. So maybe it’s the appropriate time for a little reminder about one of that competition’s chief sponsors.

Gazprom has paid big to associate its name with Europe’s leading international football club competition for a number of years now, and at every commercial break you’ll see an elaborate paean to it on your TV screen, generally in cartoon form and accompanied by a medley of leading tunes from Tchaikovsky. The thing everyone must remember is that Gazprom is not really a company in the conventional sense of that term. Rather, it is a component of the Russian state, tasked with making money, for sure, but also with carrying out Putin’s strategic objectives. Those have included, multiple times, forgetting about money entirely and cutting off gas supplies to entire countries – generally in mid-winter, of course – to make them knuckle under. Among these victims have been the Ukraine, of course, but also those EU countries, generally to the East (e.g. Bulgaria, Slovakia, Estonia, Finland), which have not had the resources or time to make the considerable infrastructure switch from the heavy dependence on that gas that they had during Soviet times.

So you can watch those playful cartoons of serious-looking employees manning gas pipeline control rooms, etc., flick by on your screen, but you need to remember: this is a “company” that would be glad to simply let you and your family freeze; all that it takes is for Putin to give the word. The sad fact that it has been able to do that reflects the absence of any common EU energy policy. Yes, the Commission has certainly been aware of the problem, and of course there exists a Directorate-General for Energy within the Commission, now headed by the Slovak Maroš Šefčovič. And in one sense it’s reassuring to read (in Dutch, from Het Financiële Dagblad; behind paywall) that the Commission recently concluded from a study that “well coordinated actions by member-states, above all in case of emergency, can considerably increase the security of [natural gas] delivery.” (On the other hand: Why did they find this out only recently? And what are they going to do to make that conclusion a reality?)

Fortunately, other developments have occurred which – often independently from anything the Commission might have done – serve to lessen this dependency on Gazprom and Russia. For one thing, demand for natural gas is declining simply due to increased energy-efficiency and alternate renewable sources of energy that are coming on-line. And there are other developments, too, discussed in a separate article not stuck behind a paywall (although it is in Polish):

“American natural gas arriving on European shores forces Gazprom into a battle for the market and for investors.” Yes, the Americans are coming to the rescue again, specifically the shale-oil companies which, via fracking, have unlocked considerable new supplies of both petroleum and gas there on the North American continent. Mighty kind of them, you have to admit, namely to pollute their own ground-water and a as result have so much gas coming out of local household water-taps that you can light a match and explode it, all just to produce some more fossil fuels to sell. But the business of America is business. (more…)

New bad news for the Ukraine:

“Hungary stops gas deliveries to Ukraine.” Would that have something to do with the visit by Gazprom chief Alexei Miller to Budapest on Monday of this week to speak with Hungarian PM Viktor Orbán?

Not if you ask the Hungarians. From the lede:

According to the government in Budapest and the State company responsible for the pipelines, FGSZ, the step was taken due to the rise in domestic demand for gas. Satisfying Hungarian demand has priority.

Yeah, right. Like the rest of us Europeans, Hungary has been enjoying the usual global warming-induced prolonged summer September weather, with temperatures dipping below 15ºC (59ºF) only at night. Demand for gas there – for heating – is due to rise maybe end November, beginning December, and not particularly now.

The real story here can be clearly seen from a couple weeks ago, when Gazprom similarly forced Poland to stop the “reverse supplies” of natural gas it was providing to the Ukraine by threatening to cut off the Poles’ supply they were diverting from. It’s just that the latter were willing to be rather more straightforward about what was happening than the Hungarians. Indeed, this Telegraaf piece speaks of a €10 billion Russian loan Orbán’s government is hoping to gain. How is such a thing even possible after the EU has collectively imposed repeated waves of sanctions – including of the financial kind – on Russia?

I’d like to derive two remarks from this data-point, which we can call “Major” and “Minor”:

• Major: Putin really likes throwing Russia’s geopolitical weight around using the threat of energy cut-offs. I believe I read somewhere that the dissertation he wrote for whatever higher academic degree it was that he earned back in his KGB schooldays had precisely to do with that subject.The prevailing wisdom seems to be that, while the Ukraine has of course already been shoved out into the cold (literally) for the coming winter when it comes to Russian natural gas, Putin would not dare to do that to the rest of the EU because of the revenue loss that would entail. Then again, he seemed indifferent enough to the food-price inflation the Russian people have had to suffer resulting from his embargo on EU agricultural imports. Make no mistake: this coming winter is when the EU will be confronted in the bleakest and most direct way possible with the problem of how to do without Russian energy supplies.
• Minor: Notice here as well the common thread of the involvement of Gazprom, which is supposed to be a private company. Well, at least it is a private company to the likes of FIFA, which allows it to pay the mega-price to be one of the commercial sponsors of the Champions League. (It is also the shirt-sponsor of the famous German football club Schalke 04.) Inevitably, those watching Champions League games at home have to put up with repeated commercials extolling Gazprom as a reliable energy-provider; if you watch closely, you’ll even notice how the characteristic Champions League graphic used when heading into and out of commercial breaks, in which spotlights come on in turn around a circular stadium, precisely recalls the pattern of gas-jets lighting up on a stove! How many of those looking on for the football actually realize that Gazprom will be glad to let them freeze next winter, if only Putin gives the order?

Next Monday, 11 February, is promising to be quite an eventful day on the Gazprom front – that’s of course the gigantic Russan natural gas company, the largest extractor of natural gas in the world, of which the Russian government owns a majority stake. On the one hand, it’s the same-old same-old, what we’ve all seen before, for Monday is the day that Russia, speaking for Gazprom, will cut off all natural gas supplies to the Ukraine due to alleged non-payment by the latter of $1.5 billion. Curiously, Ukrainian president Viktor Yushchenko has been scheduled for some time to arrive in Moscow for a visit on Tuesday. At least he’ll be glad to be away from his native country and someplace instead where it’s actually warm inside the buildings, though one can imagine that the diplomatic talks he will engage in might still be rather frosty.

But that is all par for the course for a European winter; I can remember recently thinking to myself “Hmm, it’s already February – shouldn’t we have had the regularly-scheduled Russian energy cut-off crisis by now?” More interesting is that next Monday is also the evening of the going-away concert in honor of Dimitri Medvedev – Gazprom chairman now, but Vladimir Putin’s “recommended” candidate for president of the Russian Federation at the upcoming March 2 elections, and therefore also a shoo-in as the next Russian president. The concert will be headlined by the legendary English rock-n-roll band Deep Purple, and this was recently commented upon in the New York Time’s weblog “The Lede: Notes on the News,” by Mike Nizza, who notes that Putin himself will surely be present as well. (more…)