U.S. energy sec Wright calls on EU to address regulatory trade barriers: Gastech

(Milan, Italy) — Increasing U.S. energy exports to Europe is in the “best interest for both countries” but non-tariff barriers such as the EU methane regulation must be addressed, U.S. energy secretary Chris Wright said on Wednesday.

Speaking to journalists at Gastech in Milan, he ruled out the possibility that a focus on gas exports might come at the expense of domestic U.S. gas users by driving up prices, saying that “it’s hard to overstate the scale of shale gas production,” potential.

Wright is due to meet European Commissioner for Energy Dan Jørgensen in Brussels on Thursday, where he will push for key EU climate regulation such as the Carbon Borders Adjustment Mechanism (CBAM) , the Methane Regulation and Corporate Sustainability Due Diligence Directive to be watered down as these are “problematic for growing energy trade” between the U.S. and the EU.

The Trump administration wants to end subsidies for wind, solar and battery energy sources, which should be able to compete in the market on equal terms with hydrocarbons, he continued.

While he conceded that solar and batteries might still have a place in the U.S. energy mix, he reiterated the current government “does not see a future for offshore wind as it’s too expensive and not reliable enough” amid growing opposition from various groups.

“We’re ending the era of mass subsidies to offshore wind” he said, adding that in the past projects have enjoyed an “ideologically-driven” fast permitting process.

Asked about possible sanctions on Chinese imports of Russian LNG, he did not want to elaborate specifically on the issue but said that the government is exploring “all possible avenues” to end the Russia-Ukraine conflict.

The EU committed to buy $750 billion of U.S. energy products, including oil and gas, by the end of 2028.

The numbers have been slammed as wildly unrealistic by commentators, as the EU spent a mere 76 billion euros on U.S. energy last year, and the U.S. itself exported just $166 billion of oil and gas globally, meaning the numbers wouldn’t add up even if it were to redirect all volumes to Europe.

Moreover, Europe as such does not buy energy, and it remains unclear how European buyers would be able to accommodate these volumes against the backdrop of existing contractual obligations with other suppliers.

European gas demand is also projected to decline in the coming years. Commentators have also noted that the continent has little incentive to move from dependency on one supplier – Russia – to being dependent on U.S. exports, pointing to the need to focus on diversification of domestic sources such as renewables.

“The ink is barely dry on the U.S.-EU trade deal and it’s already ‘under threat’ from EU climate laws,” said Kelly McGlynn, Policy Advisor in the EU Energy Transition at E3G. “As more and more is demanded from the EU, Europeans are right to ask: what will we be asked to give up next? Europe’s energy transition is working: creating jobs, boosting innovation, and delivering results. That’s where Europe should invest its billions, not in the interests of unreliable partners abroad.”

Ana Maria Jaller-Makarewicz, Lead Energy Analyst for Europe at the Institute for Energy Economics and Financial Analysis, said that “increasing U.S. LNG exports to Europe could be risky and bad business for countries on both sides of the Atlantic. For the EU, an over-reliance on one gas supplier could undermine energy security — as we saw in the aftermath of Russia’s full-scale invasion of Ukraine. The EU’s LNG imports should be determined by the bloc’s demand for the fuel, not by LNG suppliers’ eagerness to sell.”

Meanwhile for the U.S., “targeting a market where gas demand is in terminal decline will do little to help the country’s LNG exporters. More LNG exports could also raise the cost of electricity and home heating for U.S. consumers,” she warned.

(Writing by Beatrice Bedeschi; editing by Sophie Davies)