Temperatures in Europe plummet, demand for natural gas increases. Wind production falls by as much as 15%, requiring more natural gas. With limited supplies, Europe sees benchmark prices for natural gas rise 500%. Enter Russian President Vladimir Putin,  offering to rescue Europe from the brink of energy disaster. The bargain? Approval of the controversial Nord Stream 2 pipeline, a project that will render Europe even more beholden to Russia for future energy.

Europe, of course, didn’t get here overnight. The continent’s current energy crisis results from a decade’s mismanagement of energy politics of energy supply.

Apart from France, Europe is gripped by a movement to abandon nuclear power, even though it provided over 25% of Europe’s electricity in 2019. Nuclear plants are crucial in Europe, since they can deliver stable electricity for decades.

However, after the Fukushima nuclear accident in Japan, and large anti-nuclear protests mainly in Germany, Merkel's government announced in May 2011 that it would close all of its nuclear power plants by 2022. Eight of the seventeen operating reactors in Germany were permanently shut down following Fukushima. Currently, Germany has just six nuclear power reactors left.

While NGOs have applauded this move, 25 leading foreign and German writers, journalists, and intellectuals wrote a joint letter warning that the loss of nuclear power would only increase Germany’s carbon emissions. Restoring nuclear power would help meet the country’s climate targets, according to the experts.

Mike Fulwood, Oxford Institute for Energy Studies senior research fellow, likewise argues, that liquefied natural gas imports, especially from the U.S., could be part of the answer to Europe’s climate targets. But to date, Europe has been largely unwilling to partner with the U.S. beyond short-term contracts, limiting the expansion of LNG export terminals and driving American LNG exports into the Asian market. 

Even the EU’s much-trumpeted renewable energy policies have contributed to the energy crunch. The latest version of the Renewable Energy Directive (RED II) managed to actually reduce the number of renewable fuels available to European industries and consumers. This was achieved primarily by designating foreign-produced biofuels made from palm oil as "high risk" in order to prevent them from competing on a level playing field with EU-produced crops such as rapeseed. The result is that palm oil biofuels in Europe will be gradually phased out by 2030, even though they are more efficient and require less land clearing and less pesticides than any other vegetable oils.

The reduction of nuclear as an option was one of Merkel’s biggest mistakes; the lack of commitment to LNG was a strategic oversight; and the removal of palm oil biofuels was a costly act of protectionism.

Europeans should be angry that these policies were pursued when the clear result is to narrow Europe’s energy options, and make bottlenecks and price spikes more likely. None of the alternative sources alone is the answer, but they are all part of an effective “all of the above” energy strategy. They must be restored in the energy mix, if Europe is to avoid future similar crises in the future.  

The result of these mistakes? The EU is now fully hooked on energy imports, particularly on Russian oil and natural gas, with more than 60% of the EU’s gross available energy in 2019 coming from imported sources. Petroleum products (crude oil, gas, and solid fossil fuels) are the main imported energy products, with crude oil constituting the lion’s share. Russia, of course, was the largest supplier of natural gas to the EU in 2019 and 2020, with only Norway and Algeria providing any significant additional share. 

Sadly, dependence on Russia is only deepening, as the percentage of energy imports actually increased over the past decade. Policies such as the RED ban on palm oil, and the lack of progress on increasing LNG imports, and phasing out nuclear plants have made Europe more dependent on Russia, not less.

As Atlantic Council Senior Fellow Ariel Cohen has written, “The energy crisis unfolding in Europe has many drivers, but EU green policy hubris, and Russian hard-nosed energy poker are the key. The main lesson is: one cannot will energy transformation into reality without building ample, reliable and economically viable baseline generation capacity.”

Fortunately, all isn’t lost. European leaders can still pursue an “all of the above” energy strategy by tearing down ill-considered barriers. Trying to narrow the energy supply options – whether for protectionist, climate action of other motivations – has clearly failed. It would do great credit to EU leaders if they recognized reality and changed tack, rather than plowing on and risking more misery for European citizens both in this crisis, and inevitable future crises that will follow.

Gary Clyde Hufbauer is a nonresident senior fellow at the Peterson Institute for International Economics