By Robert Bradley Jr.
“,,, relying on discretionary non-enforcement across all 27 EU Member States fails to address the financial and legal risks associated with [LNG] contracts that often span multiple years and that are valued in the tens of billions of euros.” (Wright et. al. below)
Chris Wright of the U.S. Department of Energy, along with major liquified natural gas exporters to the EU, wrote the following letter to the European climate leaders. The complaint regards the punitive regulatory framework required for expanded LNG deliveries to energy-hungry Europe from the viewpoint of “competitiveness, prosperity, sustainability, and energy security.” EU obstructionism centers around methane emissions in the gas-to-LNG-to-gas process.
An Open Letter to Leaders of the European Commission, European Council, and European Union (EU) Member States on the EU Methane Regulation
Dear President von der Leyen, President Costa, and EU Member State Leaders:
As your largest energy suppliers, we are committed to strengthening our economic and strategic partnerships and ensuring Europe’s energy security. We fully support your objectives of increasing EU economic competitiveness, prosperity, sustainability, and energy security through provision of reliable energy supplies for the European Union and its citizens.
It is with these shared goals in mind that we write to urge the EU to take swift, necessary actions to clarify and to adopt targeted amendments to the EU Methane Regulation (EUMR), some of which have already been requested by several EU Member States, industry, and members of European Parliament.
These amendments should also be preceded by the: (i) adoption of a stop-the-clock mechanism, to provide time to develop necessary methodologies and compliance pathways that work for all; (ii)grandfathering of new contracts signed while these additional legislative adjustments are underway; and (iii) removal of penalties for noncompliance during this transitional period.
As a large and diverse importing region, the EU purchases oil and natural gas from a wide variety of exporters, the majority of which cannot meet the EUMR methane emissions measuring, reporting, and verification (MRV) requirements on the prescribed timeline. According to an independent, comprehensive industry analysis, nearly all of EU oil imports and a significant quantity of EU natural gas imports will be noncompliant with the EUMR beginning in January 2027. Even with adaptive and flexible implementation, significant negative supply and price impacts are a certainty.
The EU faces a narrow window to make necessary changes to the EUMR as importers have already begun the process of purchasing oil and natural gas that will be stored for delivery in 2027, and as of now there is no viable path to compliance with the regulation.
We understand that non-binding forthcoming guidelines will encourage flexibility in implementation and will recommend against imposing penalties for noncompliance. However, relying on discretionary non-enforcement across all 27 EU Member States fails to address the financial and legal risks associated with contracts that often span multiple years and that are valued in the tens of billions of euros.
Moreover, because legal compliance remains paramount, exporters and importers alike are unwilling to enter into contractual agreements that knowingly violate EU law, notwithstanding recommendations against penalizing noncompliance.
To be clear, energy producers in our respective nations have already made substantial progress and are spending significant capital to decrease methane emissions intensity. They also intend to continue these efforts, consistent with the objectives of the EUMR.
We strongly encourage a pragmatic approach to clarifying essential missing elements of the EUMR and adopting necessary changes, to allow importers to continue sourcing oil and gas resources needed by the EU market. We also encourage the Commission and EU Member States to work with industry stakeholders on necessary clarifications and changes that enable effective implementation of the law while reducing untenable risks.
We look forward to partnering with you to advance responsible policies that enhance energy access and security throughout the EU.
Yours sincerely,
Chris Wright, Secretary of Energy United States of America
Saad Sherida Al-Kaabi, Minister of State for Energy Affairs State of Qatar
Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas) Federal Republic of Nigeria
Mohamed Arkab, Minister of State, Minister of Hydrocarbons People’s Democratic Republic of Algeria
