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Sep 8, 2022 - World

How Europe ended up in an energy crisis

Dave Lawler
Animated illustration of the EU symbol gradually going dark.

Illustration: Shoshana Gordon/Axios

As European countries moved away from coal and nuclear over the past decade or so, they became increasingly reliant on natural gas imported via pipelines from Russia.

By the numbers: Russia provided around 40% of the EU's gas supply as of 2020 and more than 50% of Germany's.

  • Many European countries failed to diversify away from Russian gas or build in redundancy even after the invasions of Georgia in 2008 and Ukraine in 2014.
  • For example, Germany continued to shut down nuclear plants as it proceeded with the Nord Stream II gas pipeline to Russia. The U.K.'s primary gas storage facility shut down in 2017, leaving it more vulnerable to a supply shock.

Then came the invasion of Ukraine, and with it, sanctions and pledges from Europe to wean itself off of Russian oil and, eventually, gas.

  • Gazprom cut gas flows to a fraction of capacity. It dragged out planned "maintenance" on the Nord Stream 1 pipeline, purportedly due to a faulty part.
  • The Kremlin has now dropped the pretext and simply stated that if Europe wants gas, it should end the sanctions.
  • As supply has dwindled, countries like the U.K. that aren't heavily reliant on Russian gas have seen prices surge because of competition for the limited supply available from countries like Norway.

State of play: Germany and others are building terminals to import liquified natural gas from countries like the U.S. — though America won't really be able to ride to the rescue, as Axios' Ben Geman reports.

  • Truss lifted a ban on fracking and wants to build new nuclear power stations. Neither is a quick fix.
  • In the meantime, several eco-conscious countries like the Netherlands are turning to coal.

If the winter is mild, and EU countries cut gas consumption by 15% as requested, supplies might hold up even if Russia turns off the tap.

  • But a cold winter could prove very cold indeed. Countries are already having to make difficult choices about prioritizing households versus industries.
  • What to watch: The gas crisis will likely carry over into 2023 as countries blow through their storage.
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