One wonders why some U.S. journalists do not even understand the most basic economic facts. Does their  task of forwarding U.S. centric ideological phantasies like the "sclerotic Europe" or the "declining Russia" make it impossible for them? Or are they just stupid?

Look at this short piece on the opening of the Northstream pipeline by Will Englund, the Moscow correspondent of the Washington Post: Russia opening gas pipeline to Western Europe

MOSCOW — With its gas business in decline, Russia on Tuesday began filling a new pipeline that goes directly under the Baltic Sea to Germany, bypassing Ukraine, Belarus and Poland.
…
August was one of the worst months ever for Gazprom, the state-owned Russian gas company, which saw a drop in exports to Europe despite the turmoil in Libya, another gas producer. This pushed overall output down 8.2 percent.
…
Gazprom, until recently a powerful agent for Russia’s foreign policy because of its control over the European supply of gas, has seen its position slip as new technologies for extraction and shipping gas from elsewhere have undermined its pricing.

According to Englund we have:

• Russia's gas business in decline
• the worst month ever for Gazprom
• an output drop by 8.2%
• pricing undermined by other sources

This must be really bad for Russia. But only if you put ideological thinking above economics.

Yes, Russia's production did decline in the last years. But that was not a sign of general decline as Englund wants to make you believe. Russia's long term gas business is doing very well. The downward bump was a solely a matter of lacking demand because of economic trouble in the consumer countries.

source: US EIA – International Energy Outlook 2010

From the official U.S. Energy Information Agency:

Early estimates for 2009 [..] indicate a decline of 12.4 percent (2 to 3 trillion cubic feet) in Russia's natural gas production from the 2008 total. The production decline was due not to a lack of resources or production capacity, but rather to the global economic downturn and the resultant decline in natural gas demand in Russia and in its gas export markets, especially those in Europe.

August, according to Englund "one of the worst months ever for Gazprom", saw the Gazprom share price drop from $14.58 down to $10.6 as all world markets declined in fear of a renewed global recession. But the current price of $11.60/share is still 90% above the $6.09/share price low of October 2008 which occurred after a after a much bigger drop due to the global recession in that year.

And yes, Gazprom gas production declined in August. It did so because it was hot and because people had vacations.

source: FSU Oil & Gas Advisory Service April 2011 (pdf)

As can clearly be seen in the graph gas is a seasonal product with less demand in the summer than during the winter. As gas can not be stored well it only gets produced when there is demand for it. Most gas is used in Europe for heating during the winter and for electricity production. Hot weather and summer vacations are the reason why gas production in Russia dropped in August. Ten percent demand drops in natural gas during the summer are obviously normal.

As for "undermined" pricing power. Import prices for gas in Europe declined together with demand in 2008 and 2009. But since then they are again on the way up.

source: Mongabay.com based on World Bank numbers

What we have with Englund's piece is ideological phantasy – not economic analysis and reality.

There is no structural decline in Russia's gas production or in its gas pricing power. The opposite is the case. The global recession and seasonal factors were the sole reasons for recent demand, production and price movements. When that recession is over, Russia and Gazprom will be in same or even better position than before.