Gas & gangsters

Energy is the key to Europe's new relationship with Russia - and supposedly Moscow's weapon of choic

Scoops and shocks are thin on the ground in Moscow these days. As events of 2 March should confirm, elections are hardly nail-biting affairs, and nobody expects journalists to publish revelations about Vladimir Putin or his anointed successor, Dmitry Medvedev, dallying with a lobbyist. So when police grabbed 61-year-old Sergei Schneider on Moscow's fashionable Arbat Street and bundled him into an awaiting Black Maria on 24 January, they also shook newsrooms across the Russian capital out of their torpor.

They weren't the only ones to register their surprise - eyes popped in law enforcement and intelligence agencies throughout Europe and North America when they learned that "Schneider" was none other than Semyon Mogilevich, one of the FBI's most-wanted on charges of money-laundering and racketeering. In the past few years, Mogilevich is suspected of acting as a pivotal figure in Russia's gas industry.

Getting gas out of the ground in central Asia or Russia to the homes of central and western Europe is an expensive and complicated business. And as capitalism emerged in Russia during the 1990s, it needed people to grease the wheels of mineral commerce. The big industry players needed energetic and persuasive fixers in order to ensure that they were paid their cut away from the prying eyes of any tax authorities or their competitors. Two companies, ETG and RosUkrEnergo, were consecutively given exclusive rights to negotiate transit deals for Russian gas travelling through Ukraine. They were widely considered the most notorious vehicles for this lucrative sideline to Russian organised crime's impressively diverse portfolio.

Details started to emerge in 2005 after the Orange Revolution brought Yulia Tymoshenko to power as Ukraine's prime minister. She ordered her then security minister to open a criminal investigation into these companies and specifically into Mogilevich's involvement with them. Later, the same minister asserted that Moscow connived in the successful movement to bring down Tymoshenko's government in order to prevent details about ETG and Mogilevich from being made public. Tymoshenko herself was threatened with arrest in Moscow on corruption charges.

Three years later, things have changed. Four weeks after Mogilevich's arrest in January, Tymoshenko pitched up in Moscow (charges and arrest threat long since forgotten) and announced that Ukraine had overcome its long-standing problems with Gazprom, Russia's state-backed energy behemoth, and negotiated payment of its outstanding debt to the company. Two days later she was happy to comment on Mogilevich's arrest: "As far as gas transit from Uzbekistan, Tajikistan and other countries is concerned, we don't need any shadowy intermediaries," she said. "There will be transparency in our government and society. It also concerns energy policy."

Winner takes all

The ghostly presence of figures like Mogilevich around the gas industry has reinforced the impression that Gazprom and Putin are playing fast and loose with its energy resources. This has bolstered the thesis, which has become fashionable very quickly, that Russia and the west have returned to the days of a winner-takes-all ideological competition. Indeed, the past few months has seen publication of two books devoted to the subject, most recently The New Cold War, by the Economist correspondent Edward Lucas. The blame for this development is invariably placed firmly on Moscow's shoulders.

Perhaps after the uncertainties of the 1990s and the Twin Towers, there is a hankering to get back to the grand chess game between the White House and the Kremlin, with Europe as the battleground. Nevertheless, the warnings of those who subscribe to the thesis are stark: Putin's Russia is bent on stifling all domestic opposition and restoring the omnipotence of the KGB. But special attention is paid particularly to how Russia intends to use its gas supplies to western Europe as a weapon. A week ago, Matthew Bryza, the US deputy assistant secretary of state, spelled out western concerns, warning against the creation of monopolies in the energy industry. "We especially don't like them when they threaten at least the economic security of our most important allies," he said in an explicit attack on Gazprom, the energy company that symbolises the revival of Russian might.

The cold wind blowing in from Moscow is especially chilly by the time it hits London. The murder of Alexander Litvinenko, with its tit-for-tat expulsions, and the closure of British Council offices in St Petersburg and Ekaterinburg, suggest the Russians are revisiting the sinister romanticism of the Cold War.

Of course, Russia has a very different perspective on this. It suddenly has very powerful American radar systems being placed close to its border (and also hosted by Britain) under Washington's missile defence system; and it awaits in vain the extradition of Boris Berezovsky. Moscow first requested the extradition of this Russian billionaire and prominent Putin opponent on charges of corruption, money-laundering and racketeering in 2003. At first the Home Office refused Berezovsky's application for asylum but several months later Whitehall changed its mind. The only reason that a number of senior sources in Washington and London can give for this turnabout is that Berezovsky has enjoyed a close relationship with British intelligence. That angers the Russians, and goes a long way to explaining why Andrei Lugovoi, Scotland Yard's number-one suspect in the Litvinenko murder, continues to enjoy the full protection of the Russian state. However, the arrest of Mogilevich in order to smooth the path of the Ukrainian gas deal suggests a pragmatism on Russia's part that is often overlooked in Britain. In important respects, the fate of Mogilevich is much more significant than Lugovoi's.

Co-operation, not confrontation

Elsewhere in the European Union, a different picture is emerging where the emphasis in relations with Moscow is placed on co-operation, not confrontation. Germany's economic links with Russia are expanding with the explicit backing of Chancellor Angela Merkel. Nicolas Sarkozy started his presidency by securing a huge deal for Total to develop the Shtokman gas field in the Barents Sea in a deal with Gazprom that Putin personally approved.

Energy is the key to the new relationship with Russia and supposedly Moscow's weapon of choice in its plan for European domination. Yet this assumption ignores a more fundamental reality: the European Union currently consumes 480 billion cubic meters (bcm) of gas a year and that is set to rise to about 600bcm by 2020; Russia can provide most of that need either with its own gas or by transporting Turkmen and Kazakh gas. There is no better customer for Russia than the European Union. Gazprom is also developing its markets in Japan and China but the EU remains by far the most lucrative and reliable consumer. Why would the Russians seek to promote a conflict with its best revenue stream? The converse is true - given that the alternative supplies to the EU come from Iran or elsewhere in the Middle East, there is no better supplier for the EU than Russia.

Such is the fear of Russia's dominance of the EU gas market that, for several years, a European consortium has been attempting to diversify its gas suppliers. To lessen the dependency on Russian gas, and with American support, the EU came up with Nabucco, a gas pipeline that would bring supplies from Kazakhstan, Turkmenistan, Azerbaijan and Iran across Turkey and into the Balkans. But last summer President Putin managed to scupper this by persuading the Kazakhs and Turkmens, without difficulty, to sell their gas to Gaz prom instead, knocking the stuffing out of the Nabucco plan overnight. American sanctions on Iran did the rest.

Already signed up

More recently, Bulgaria and Serbia have signed up to Gaz prom's alternative to Nabucco called South Stream which will bring 30bcm of gas from Russia under the Black Sea. But before the new cold warriors raise the alarm, it is worth remembering that this is not a Russian monopoly - ENI, the Italian energy giant, owns 50 per cent of South Stream while Austria's OMV and Hungary's MOL have recently signed deals with Gazprom despite their involvement in Nabucco.

Ironically, Nabucco looks as though it might be saved by the intervention of Gazprom. The Russian firm has said it will consider diverting some of its gas away from South Stream and into Nabucco - after all it all makes money.

To the north, Germany and its former chancellor, Gerhard Schröder, are enthusiastic participants in the Nord Stream project that will bring gas to Germany direct from Russia across the Baltic Sea. Schröder, who actually chairs the consortium building the pipeline, dismissed the objections of Poland and Ukraine who detected a Russo-German plot (familiar from their histories) to squeeze the two countries out of the lucrative transit market. Brussels is trying desperately to fashion a coherent pan-EU policy on gas supply to head off disputes within the Union over access to Russian gas. But so far the needs of individual countries, whether large like Germany and Italy or small like Bulgaria and Hungary, have been decisive in determining the course of pipeline politics.

The new Russia knows how to exploit internal European squabbles to its advantage. In the old days, the Soviet Union was run by a gerontocracy clinging to the ideology of communist state power. These days the young energy advisers around Putin have Harvard MBAs and perfect English - they are not driven by ideology, but by money and market share.

The resurgent Russian state and its repressive mechanisms are distasteful and a matter of real concern. It is important to remember that while we in the west made hay in the 1990s, the Russians faced chaos and economic misery. Their introduction to capitalism, inspired by oligarchs like Berezovsky, was deeply unhappy, and it is essential to take this into account when assessing Putin's growing authoritarianism. This may not yet amount to the rule of law but for most Russians it is an improvement on the rule of gangsters that preceded it.

Clearly the deployment of missile defence and the recog nition of Kosovo confer a sense of Cold War panic on proceedings, but that should not obscure the fact that gas and oil are the substances underpinning Europe's relationship with Moscow. If this mutual dependency were handled properly (a big if), both sides should benefit in equal measure. The relationship between Russia and the west is driven not by the old Cold War ideologies but by the carving up of profits. If, however, we start guiding our policies by the new Cold War thesis, this may become a self-fulfilling prophecy. Present circumstances would look benign by comparison.

This article first appeared in the 03 March 2008 issue of the New Statesman, Gas gangsters

MARTIN O’NEILL
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The new young fogeys

Today’s teens and twentysomethings seem reluctant to get drunk, smoke cigarettes or have sex. Is abstinence the new form of youth rebellion?

In a University College London lecture theatre, all eyes are on an elaborate Dutch apple cake. Those at the back have stood up to get a better look. This, a chorus of oohs and aahs informs me, is a baked good at its most thrilling.

In case you were wondering, UCL hasn’t rented out a room to the Women’s Institute. All thirty or so cake enthusiasts here are undergraduates, aged between 18 and 21. At the third meeting this academic year of UCL’s baking society, the focus has shifted to a Tupperware container full of peanut butter cookies. One by one, the students are delivering a brief spiel about what they have baked and why.

Sarah, a 19-year-old human sciences undergraduate, and Georgina, aged 20, who is studying maths and physics, help run the baking society. They tell me that the group, which was set up in 2012, is more popular than ever. At the most recent freshers’ fair, more than 750 students signed up. To put the number in perspective: that is roughly 15 per cent of the entire first-year population. The society’s events range from Great British Bake Off-inspired challenges to “bring your own cake” gatherings, such as today’s. A “cake crawl”, I am told, is in the pipeline. You know, like a pub crawl . . . but with cake? Georgina says that this is the first year the students’ union has advertised specifically non-drinking events.

From the cupcake boom to the chart-topping eminence of the bow-tie-wearing, banjo-plucking bores Mumford & Sons, the past decade of youth culture has been permeated by wholesomeness. According to the Office for National Statistics (ONS), this movement is more than just aesthetic. Not only are teenage pregnancies at their lowest level since records began in the 1960s, but drug-taking, binge drinking and sexually transmitted infections among young people have also taken significant dives. Drug use among the under-25s has fallen by a quarter over the past ten years and heavy drinking – measured by how much a person drinks in an average week – is down by 15 per cent. Cigarettes are also losing their appeal, with under-25 smokers down by 10 per cent since 2001. Idealistic baby boomers had weed and acid. Disaffected and hedonistic Generation X-ers had Ecstasy and cocaine. Today’s youth (which straddles Generations Y and Z) have cake. So, what shaped this demographic that, fairly or otherwise, could be called “Generation Zzzz”?

“We’re a lot more cynical than other generations,” says Lucy, a 21-year-old pharmacy student who bakes a mean Welsh cake. “We were told that if we went to a good uni and got a good job, we’d be fine. But now we’re all so scared we’re going to be worse off than our parents that we’re thinking, ‘Is that how we should be spending our time?’”

“That” is binge drinking. Fittingly, Lucy’s dad – she tells me – was an anarchist with a Mohawk who, back home in the Welsh valleys, was known to the police. She talks with deserved pride about how he joined the Conservative Party just to make trouble and sip champagne courtesy of his enemies. Lucy, though decidedly Mohawk-free, is just as politically aware as her father. She is concerned that she will soon graduate into a “real world” that is particularly hard on women.

“Women used to be a lot more reliant on men,” she says, “but it’s all on our shoulders now. One wage isn’t enough to support a family any more. Even two wages struggle.”

***

It seems no coincidence that the downturn in drink and drugs has happened at the same time as the worst financial crisis since the Great Depression. Could growing anxiety about the future, combined with a dip in disposable income, be taming the under-25s?

“I don’t know many people who choose drugs and alcohol over work,” says Tristan, a second-year natural scientist. He is one of about three men at the meeting and it is clear that even though baking has transcended age it has yet to transcend gender to the same extent. He is softly spoken and it is hard to hear him above a room full of sugar-addled youths. “I’ve been out once, maybe, in the past month,” he says.

“I actually thought binge drinking was quite a big deal for our generation,” says Tegan, a 19-year-old first-year linguistics undergraduate, “but personally I’m not into that. I’ve only been here three weeks and I can barely keep up with the workload.”

Tegan may consider her drinking habits unusual for someone her age but statistically they aren’t. Over a quarter of the under-25s are teetotal. Neither Tegan nor Lucy is dull. They are smart, witty and engaging. They are also enthusiastic and seemingly quite focused on work. It is this “get involved” attitude, perhaps, that distinguishes their generation from others.

In Absolutely Fabulous, one of the most popular British sitcoms of the 1990s, a lot of the humour stems from the relationship between the shallow and fashion-obsessed PR agent Edina Monsoon and her shockingly straitlaced teenage daughter, Saffie. Although Saffie belongs to Generation X, she is its antithesis: she is hard-working, moral, politically engaged, anti-drugs and prudishly anti-sex. By the standards of the 1990s, she is a hilarious anomaly. Had Ab Fab been written in the past couple of years, her character perhaps would have been considered too normal. Even her nerdy round glasses and frumpy knitted sweaters would have been considered pretty fashionable by today’s geek-chic standards.

Back in the UCL lecture theatre, four young women are “geeking out”. Between mouthfuls of cake, they are discussing, with palpable excitement, a Harry Potter-themed summer camp in Italy. “They play Quidditch and everything – there’s even a Sorting Hat,” says the tall, blonde student who is leading the conversation.

“This is for children, right?” I butt in.

“No!” she says. “The minimum age is actually 15.”

A kids’ book about wizards isn’t the only unlikely source of entertainment for this group of undergraduates. The consensus among all the students I speak to is that baking has become so popular with their demographic because of The Great British Bake Off. Who knew that Mary Berry’s chintzy cardigans and Sue Perkins’s endless puns were so appealing to the young?

Are the social and economic strains on young people today driving them towards escapism at its most gentle? Animal onesies, adult ball pools (one opened in west London last year) and that much-derided cereal café in Shoreditch, in the East End, all seem to make up a gigantic soft-play area for a generation immobilised by anxiety.

Emma, a 24-year-old graduate with whom I chatted on email, agrees. “It feels like everyone is more stressed and nervous,” she says. “It seems a particularly telling sign of the times that adult colouring-in books and little, cutesy books on mindfulness are such a massive thing right now. There are rows upon rows of bookshelves dedicated solely to all that . . . stuff.” Emma would know – she works for Waterstones.

From adult colouring books to knitting (UCL also has a knitting society, as do Bristol, Durham, Manchester and many more universities), it is hard to tell whether the tsunami of tweeness that has engulfed middle-class youth culture in the past few years is a symptom or a cause of the shrinking interest in drugs, alcohol, smoking and other “risk-taking” behaviours.

***

Christine Griffin is Professor of Social Psychology at Bath University. For the past ten years, she has been involved in research projects on alcohol consumption among 18-to-25-year-olds. She cites the recession as a possible cause of alcohol’s declining appeal, but notes that it is only part of the story. “There seems to be some sort of polarisation going on,” Griffin says. “Some young people are actually drinking more, while others are drinking less or abstaining.

“There are several different things going on but it’s clear that the culture of 18-to-25-year-olds going out to get really drunk hasn’t gone away. That’s still a pervasive social norm, even if more young people are drinking less or abstaining.”

Griffin suggests that while frequent, sustained drinking among young people is in decline, binge drinking is still happening – in short bursts.

“There are still a lot of people going to music festivals, where a huge amount of drinking and drug use goes on in a fairly unregulated way,” she says. It is possible that music festivals and holidays abroad (of the kind depicted in Channel 4 programmes such as What Happens in Kavos, in which British teenagers leave Greek islands drenched in booze and other bodily fluids) are seen as opportunities to make a complete escape from everyday life. An entire year’s worth of drinking, drug-taking and sex can be condensed into a week, or even a weekend, before young people return to a life centred around hard work.

Richard De Visser, a reader in psychology at Sussex University, also lists the economy as a possible cause for the supposed tameness of the under-25s. Like Griffin, however, he believes that the development is too complex to be pinned purely on a lack of disposable income. Both Griffin and De Visser mention that, as Britain has become more ethnically diverse, people who do not drink for religious or cultural reasons – Muslims, for instance – have become more visible. This visibility, De Visser suggests, is breaking down taboos and allowing non-mainstream behaviours, such as not drinking, to become more socially accepted.

“There’s just more variety,” he says. “My eldest son, who’s about to turn 14, has conversations – about sexuality, for example – that I never would’ve had at his age. I think there’s more awareness of alcohol-related problems and addiction, too.”

De Visser also mentions the importance of self-image and reputation to many of the young non-drinkers to whom he has spoken. These factors, he argues, are likely to be more important to people than the long-term effects of heavy drinking. “One girl I interviewed said she wouldn’t want to meet the drunk version of herself.”

Jess, a self-described “granny”, is similarly wary of alcohol. The 20-year-old Liverpudlian, who works in marketing, makes a bold claim for someone her age. “I’ve never really been drunk,” she says. “I’ve just never really been bothered with alcohol or drugs.” Ironically, someone of her generation, according to ONS statistics, is far more likely to be teetotal than a real granny at any point in her life. Jess says she enjoys socialising but her nights out with close friends are rather tame – more likely to involve dinner and one quick drink than several tequila shots and a traffic cone.

It is possible, she suggests, that her lack of interest in binge drinking, or even getting a little tipsy, has something to do with her work ethic. “There’s a lot more competition now,” she says. “I don’t have a degree and I’m conscious of the need to be on top of my game to compete with people who do. There’s a shortage of jobs even for people who do have degrees.”

Furthermore, Jess says that many of her interactions with friends involve social media. One theory put forward to explain Generation Zzzz is that pubs are losing business to Facebook and Twitter as more and more socialising happens online. Why tell someone in person that you “like” their baby, or cat, or new job (probably over an expensive pint), when you can do so from your sofa, at the click of a button?

Hannah, aged 22, isn’t so sure. She recently started her own social media and communications business and believes that money, or the lack of it, is why her peers are staying in. “Going out is so expensive,” she says, “especially at university. You can’t spend out on alcohol, then expect to pay rent and fees.” Like Jess (and as you would probably expect of a 22-year-old who runs a business), Hannah has a strong work ethic. She also has no particular interest in getting wasted. “I’ve always wanted my own business, so for me everything else was just a distraction,” she says. “Our generation is aware it’s going to be a bit harder for us, and if you want to support yourself you have to work for it.” She also suggests that, these days, people around her age have more entrepreneurial role models.

I wonder if Hannah, as a young businesswoman, has been inspired by the nascent strand of free-market, “lean in” feminism. Although the women’s movement used to align itself more with socialism (and still does, from time to time), it is possible that a 21st-century wave of disciples of Sheryl Sandberg, Facebook’s chief operating officer, is forswearing booze, drugs and any remote risk of getting pregnant, in order to get ahead in business.

But more about sex. Do the apparently lower rates of sexually transmitted infections and teenage pregnancies suggest that young people are having less of it? In the age of Tinder, when hooking up with a stranger can be as easy as ordering a pizza, this seems unlikely. Joe Head is a youth worker who has been advising 12-to-21-year-olds in the Leighton Buzzard area of Bedfordshire on sexual health (among other things) for 15 years. Within this period, Head says, the government has put substantial resources into tackling drug use and teen pregnancy. Much of this is the result of the Blair government’s Every Child Matters (ECM) initiative of 2003, which was directed at improving the health and well-being of children and young adults.

“ECM gave social services a clearer framework to access funds for specific work around sexual health and safety,” he says. “It also became a lot easier to access immediate information on drugs, alcohol and sexual health via the internet.”

***

Head also mentions government-funded education services such as Frank – the cleverly branded “down with the kids” anti-drugs programme responsible for those “Talk to Frank” television adverts. (Remember the one showing bags of cocaine being removed from a dead dog and voiced by David Mitchell?)

But Head believes that the ways in which some statistics are gathered may account for the apparent drop in STIs. He refers to a particular campaign from about five years ago in which young people were asked to take a test for chlamydia, whether they were sexually active or not. “A lot of young people I worked with said they did multiple chlamydia tests throughout the month,” he says. The implication is that various agencies were competing for the best results in order to prove that their education programmes had been effective.

However, regardless of whether govern­ment agencies have been gaming the STI statistics, sex education has improved significantly over the past decade. Luke, a 22-year-old hospital worker (and self-described “boring bastard”), says that sex education at school played a “massive part” in his safety-conscious attitude. “My mother was always very open [about sex], as was my father,” he says. “I remember talking to my dad at 16 about my first serious girlfriend – I had already had sex with her by this point – and him giving me the advice, ‘Don’t get her pregnant. Just stick to fingering.’” I suspect that not all parents of millennials are as frank as Luke’s, but teenagers having sex is no longer taboo.

Luke’s attitude towards drugs encapsulates the Generation Zzzz ethos beautifully: although he has taken MDMA, he “researched” it beforehand. It is this lack of spontaneity that has shaped a generation of young fogeys. This cohort of grannies and boring bastards, of perpetual renters and jobseekers in an economy wrecked by less cautious generations, is one that has been tamed by anxiety and fear.

Eleanor Margolis is a freelance journalist, whose "Lez Miserable" column appears weekly on the New Statesman website.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war