U.S. natural gas exporters are asking Europe for something increasingly common in global energy markets these days: a timeout.
American LNG suppliers want the European Union to push back enforcement of its methane emissions rules until at least 2028, arguing the regulations are already creating enough uncertainty to freeze long-term gas deals at exactly the wrong moment.
Charlie Riedl, senior vice president of the Natural Gas Supply Association, said Tuesday that some U.S. companies have gone as far as telling commercial teams not to sign long-term contracts with European buyers until there is more clarity.
That is awkward timing.
The United States became Europe’s largest LNG supplier after Russia’s invasion of Ukraine upended pipeline flows in 2022. Since then, Europe has leaned heavily on U.S. gas to plug a massive supply gap. Now, amid the Iran war and severe disruption to global LNG markets, Europe suddenly needs reliable gas suppliers even more.
And this is where energy policy once again runs headfirst into energy reality.
Under the EU’s methane law, imported gas beginning in 2027 must comply with monitoring and verification standards equivalent to Europe’s or satisfy strict industry certification requirements. The regulation sits at the center of Europe’s climate agenda.
Unfortunately for Brussels, LNG markets have developed a habit of refusing to cooperate with carefully organized policy calendars.
Global gas markets are already under pressure after the Middle East crisis disrupted roughly one-fifth of global LNG supply and delayed new projects. Europe has scrambled to secure replacement cargoes, while companies have signed new deals with U.S. producers to compensate for supply disruptions tied to the conflict.
The methane rules have been causing heartburn for months. Earlier this year, oil and gas companies, including European majors, urged Brussels to pause the regulation, warning it could disrupt fuel imports.
The European Commission has softened portions of the policy and delayed some penalties. Now exporters appear to be asking for something more substantial.
By Julianne Geiger for Oilprice.com
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