Energy crisis in Europe

The end of 2021 saw European countries fall into an energy crisis that has played a role in the conflict between Ukraine and Russia. This crisis came about as a result of multiple factors which range from the plan to cut back the use of fossil fuels to the reopening of economies after the COVID-19 lockdown.

In the past year, there has been a global increase in the demand for natural gas. Europe, in particular, has been transitioning from coal to cleaner energy sources. In 2021, Europe more heavily relied on natural gas due to their poor wind production and decreased coal production; however, gas production in European countries has been on a decline over the last few years. As a result, they import the vast majority of the natural gas they use—in 2019 it was 90%—and of the natural gas produced in Europe, supply chain issues have limited its distribution. The global reopening of economies has also led countries to increase their demand for natural gas. In 2020, due to the pandemic, natural gas consumption in the European Union decreased by 2.7% compared to 2019. However, between April and June of 2021, the European Union experienced an increase of 19% in gas consumption compared to that of 2020. All of these factors together have led gas prices to drastically rise in Europe, leaving people in the best case scenario with higher energy bills, or in the worst case scenario, unable to keep warm during the winter.

This is where Russia’s increased leverage in the Ukraine conflicts comes into play. Russia supplies one-third of Europe’s natural gas through pipelines, some of which run through Ukraine. As tensions rise between Ukraine and Russia, there is trepidation over what imposing sanctions on Russia will mean for the energy crisis in Europe. There is concern that Russia will stop their export of natural gas to Europe if the conflict escalates, deeply impacting the economies of European countries that depend on that source of energy. One very important dependent on Russia’s natural gas is Germany, which gets 30% of its natural gas from them and is currently in the works of constructing a pipeline, Nord Stream 2, that will connect the two countries. A reason for German dependence on Russian gas is Germany’s decision to cease all nuclear energy and replace it with renewables. However, to make up for the percentage that was covered by nuclear energy, Germany has had to increase their use of fossil fuels, like natural gas.

In an attempt to help European countries, the United States has sent “two dozen tankers [with] liquified natural gas to Europe” which could alleviate some of the immediate pressure in regard to energy supply; unfortunately, this is only a short-term solution. During a moment of diplomatic sensitivity with the Russia-Ukraine conflict, this energy crisis has highlighted Europe’s deficiency in energy infrastructure and has complicated matters for European countries.