Europe is facing an energy crisis. We now live in an era of energy uncertainty. The days of cheap and abundantly available energy are over.
Europe is running out of indigenous energy resources at a time of increased prices, diminishing resources and their concentration into fewer, more geopolitically sensitive regions, and greater international competition for the remaining energy resources.
The price of oil and gas remained fairly static for nearly two decades and this lulled many into a false sense of security.The prices of oil and gas have more than tripled since 2001. The last three global recessions were caused by oil price rises. The IMF says that “oil prices will continue to present a serious risk to the global economy”.
At the same time, there are concerns about the real level of known and realisable oil and gas reserves, and when peak production and the associated price increases occur.
This coincides with fears over the security of supply coming from politically unstable regions, and a reduction in countries that have resources.
Europe is an energy intensive region heavily reliant on imports; already today, it imports 50% of its energy needs, projected to increase to 70% within two decades. By 2030, oil imports would rise from 76% to 88% and gas imports from 50% to 81%, compared to 2000. Indigenous fossil fuel resources, such as in the North Sea, are in rapid decline. Global known uranium reserves amount to two and a half million tonnes, equal to 40 years’ demand at present consumption rates. The European Union is home to barely 2 % of the world’s natural uranium reserves.
In 2000, when fuel prices were far lower than today, the European Commission’s Green Paper on Security of Supply recognised the potential of renewable energy sources: “Renewable sources of energy have a considerable potential for increasing security of supply in Europe.. […] In the medium term, renewables are the only source of energy in which the European Union has a certain amount of room for manoeuvre aimed at increasing supply in the current circumstances.” It continued: “Effectively, the only way of infl uencing [European energy] supply is to make serious efforts with renewable sources.”