US LNG developers and their suppliers of feed natural gas say uncertainty around their ability to comply with upcoming EU methane emission regulations are becoming an obstacle to their ability to negotiate long-term commercial deals.
The EU in 2027 will start requiring companies importing LNG to meet monitoring, reporting and verification rules for methane as a way to control emissions of the potent greenhouse gas. But ambiguity over the methane rules, combined with President Donald Trump's push to end an emissions reporting program, has become an unwanted complication for the sector, gas industry officials said on Wednesday at Energy Dialogues' North American Gas Forum in Washington, DC.
"There's a lot of uncertainty in Europe around methane regulation, and it's starting to manifest itself in the conversations that we have about commercial long-term supply," US independent Expand Energy's marketing and trading vice president Dennis Price said. "We run the risk of slowing down commercial activity."
US industry officials were already wrangling over EU compliance before the US Environmental Protection Agency (EPA) proposed this year to end a 15-year-old program that required large oil and gas companies to report on their greenhouse gas emissions. Repealing the program would eliminate a credible source of data on the methane intensity of US-produced natural gas and LNG, leaving it up to industry to find another way to show compliance to the EU.
Oil and gas groups have urged EPA to keep the greenhouse gas reporting program, which the operators also intend to use to claim federal tax credits for carbon capture and clean hydrogen.
EPA's rationale for repealing the reporting program was "admirable", but the anticipated cost savings are unlikely to be "real" because most operators will continue monitoring emissions, American Exploration & Production Council chief executive Anne Bradbury said.
"I think that you will see American oil and gas companies continue to report regardless of whether or not they're required to do so by EPA," Bradbury said.
The Trump administration has been pressuring the EU to provide flexibility on the methane standards, as it also negotiates trade agreements that contemplate the EU purchasing large amounts of US-produced energy. US LNG developers say that with the uncertainty over the methane standards, they have decided their best course is to simply reduce emissions from their own facilities as much as possible.
"The whole thing is clear as mud, and so what do you do?" Golden Pass LNG chief commercial officer Jeff Hammad said. "We're gonna do everything we can to make sure our facility has all the methane emissions detection and whatever we can to make our own facility as button-up as possible."
EPA said its proposed repeal of mandatory greenhouse gas emissions reporting will "provide companies choice, instead of taking it away". The comment period on the proposal closed last month, and EPA said it will now review and respond to comments.
