U.S. LNG lobbying aimed at weakening EU methane rules

The European Union has agreed to spend $750 billion on U.S. energy imports over three years as part of a trade deal with President Trump. Industry analysts say such lofty figures are “delusional” and “pie in the sky,” and were meant merely as a sop to appease President Trump and avoid more painful American tariffs on EU goods.

But new reporting also suggests the European willingness to make large-scale purchases of U.S. LNG is the outgrowth of a years-long lobbying campaign by the U.S. LNG industry and some European governments, particularly in Central and Eastern Europe, to get Europe hooked on American gas. Trade threats from Washington have pushed energy high up on the agenda, amping up the pressure on Brussels to take more U.S. LNG.

At the same time, industry lobbying on both sides of the Atlantic has targeted the European methane regulations, which would ease the way for more LNG to flow to Europe.

Politico has reported that the U.S. lobbying outfit LNG Allies, which represents U.S. natural gas producers, has spent years convening and elevating the voices of the Washington-based embassies of Central and Eastern European countries, making the case that the U.S. should export more LNG to Europe.

In the first Trump administration, LNG Allies worked with the U.S. Trade and Development Agency to promote gas exports. As Politico reports, with Trump back in office, that effort is now being revived in part to promote LNG exports to Europe.

One obstacle for U.S. LNG is the forthcoming EU Methane Regulation, which would impose limits on the methane intensity of gas imported into Europe. Details have yet to be finalized and the rules will be phased in over the coming years, but it would require very low levels of methane emissions from U.S. LNG.

At the CERAWeek conference in Houston in March of this year, many oil and gas executives were fixated on the EU Methane Regulation, expressing anxiety that the rules would be hard for American gas producers to meet. As Gas Outlook reported at the time, the head of LNG Allies, Fred Hutchison, said opposition to the methane regulation was stronger from “sister organisations in Brussels,” rather than the U.S. LNG industry.

But as Politico detailed, LNG Allies is not merely a bystander. LNG Allies held an “Embassy Working Group” meeting in April with European diplomats and the European oil and gas industry. At that meeting, they had a discussion to “address challenges” for U.S. companies complying with the EU’s methane regulation.

In response to questions from Politico, Hutchison said: “We haven’t been critical of the EU’s objective of regulating methane,” but added, “It seemed to be developed without any factual understanding of how the gas system works in the United States.”

In June, seven European countries supported a proposal to soften the methane regulation. Politico asked Hutchison if the support from those countries, many of which are the same countries LNG Allies worked with for many years to support LNG, were “the fruit of a decade-long cultivation of the region.” Hutchison replied: “Sure, I think it is.”

The EU even granted Fred Hutchison an award earlier this year for strengthening U.S.-European energy security cooperation, bestowing an accolade on the head of a U.S. lobbying group that appears to be working to undermine the EU Methane Regulation and lock Europe onto American gas.

U.S.-EU trade deal

The U.S. trade deal with the EU has received immediate blowback from some European states. French Prime Minister Francois Bayrou called it a “dark day” and that the EU “resigns itself to submission.”

The deal, which remains light on detail, maintains a 15 percent tariff on European imports to the U.S., and calls on Europe to spend $250 billion per year on American oil, gas, coal, and other smaller products.

To be sure, the energy figures are unrealistic. The EU only bought around $76 billion worth of American petroleum, gas, and coal in 2024. There’s no conceivable way to ramp that up to $250 billion. Energy analysts have widely panned these expected trade flows as “delusional.”

But that does not mean the accord will be meaningless. The agreement could provide political momentum to some commercial deals. In the weeks leading up to the announcement, Germany’s SEFE and Italy’s Eni signed contracts with Venture Global’s CP2 project, each promising to buy LNG from the southwest Louisiana facility for the next 20 years. Venture Global announced that it had secured a financing package and announced a final investment decision on CP2 immediately after the U.S.-EU trade deal was announced on July 27.

Importantly, the urgency to pursue the political goals behind the agreement could pressure the EU into weakening its own rules.

“[T]he U.S.-E.U. deal may have potential to create upside for U.S. energy exporters: if political math can open a deal window, pragmatic changes necessary to encourage new supply could further pare back red tape on the other side of the pond,” ClearView Energy Partners, a Washington-based energy consultancy, wrote in a note to clients, referring to the potential watering down of the EU Methane Regulation and other EU corporate oversight rules.

Pressure on Europe is also coming from another major LNG supplier. Reuters reported that Qatar has threatened to cut LNG exports to Europe in response to the bloc’s corporate due diligence law on labour and environmental damage.

The push to weaken the Methane Regulation comes at the same time that just about all regulatory restraints on the U.S. gas industry are being blown up by the Trump administration. The sweeping tax package passed by the U.S. Congress in early July scrapped a methane fee on the oil and gas industry, and rescinded $1.5 billion in funding for mitigation.

Meanwhile, the Trump administration’s EPA is expected to rescind the requirement that oil and gas companies monitor their methane emissions and repair leaks.

That leaves the EU Methane Regulation as one of the few sources of meaningful oversight on methane emissions from American gas producers. That is, if the regulation is fully implemented.

Even if the EU could somehow spend such staggering sums on American energy imports — which, again, analysts say it cannot — the opportunity cost would be immense. If the EU instead invested $750 billion on renewable energy, the bloc could install 546 gigawatts of clean electricity, which would expand its entire renewable energy capacity by 90 percent, according to an analysis from IEEFA.

In geopolitical terms, that would substantially build out electric capacity that could not be disrupted by hostile foreign governments.

Instead, the EU’s deal with the U.S. risks “a déjà vu moment” of deepening European dependence on a single energy supplier for critical energy supplies, IEEFA warned.

In an ironic twist, LNG Allies’ Fred Hutchison is concerned that Trump’s aggressive trade posture may backfire on the U.S. LNG industry if Trump decides to cut a deal with Vladimir Putin in an effort to end the war in Ukraine. That could result in a return of Russian gas to Europe, which would severely undercut the market share of American gas exporters in Europe. Hutchison told Politico such a scenario is akin “an asteroid strike…something that is probably beyond our control.”