A new, harsh energy competition around natural gas is taking shape in Europe, with the paradox being that Russia is not at the center this time. The European Union, attempting to decouple from Russian gas, has led itself into an increasing dependence on American LNG, creating a new geoeconomic field of pressure where the US now appears as the primary regulator of Europe's energy balance. At the heart of this new tension lie the European regulations on methane emissions, which will come into full effect starting in 2027. These rules require strict leak monitoring, limits on the flaring and venting of natural gas, and provide for sanctions against non-compliant suppliers. However, the US is reacting strongly, with Energy Secretary Chris Wright warning that unless changes are made, American LNG exports might bypass the European market entirely, heading toward Asia instead.
The US warning
The US warning to Europe is now crystal clear. The head of the US Department of Energy, Chris Wright, stated that if the EU does not alter its methane emission standards, then Europe will suffer because American LNG will bypass Europe. The US refuses to comply with the ill-fated regulation to reduce methane emissions in the energy sector, which was adopted by the European Commission in 2024. From January 1, 2027, import contracts will only be possible if European reporting standards are met. These standards require leak monitoring and prohibit the routine flaring and venting of gas. LNG suppliers will have to pay fines for non-compliance. In other words, this means they will pay a price to enter the EU market.
What investments?
Europe wants to stimulate investments and the demand for renewable energy sources (RES). However, natural gas suppliers are highly dissatisfied. Qatar has also expressed its annoyance with these regulations. And, for the moment, the US has become the largest supplier of LNG to the EU, with exports exceeding 100 billion cubic meters. Qatar, behind Russia, was third even before the crisis in the Middle East and the closure of the Strait of Hormuz. Norway currently surpasses the US, but only in terms of the combination of LNG and pipeline gas supplies. However, by 2027, American gas volumes could overtake even Scandinavian gas. This is because Norway lacks the capacity to increase supplies, whereas the US possesses it—building a massive amount of new liquefaction capacity.
Energy crisis
If the US cuts off the supply of natural gas to Europe, it will signal a severe energy crisis for the European market. Gas prices within the EU will skyrocket immediately as the market attempts to reclaim the LNG that will be diverted to Asia. Europe is unlikely to freeze, but a new wave of deindustrialization is guaranteed. To secure sufficient natural gas and heating for ordinary consumers—residential buildings, kindergartens, hospitals, and schools—industrial consumption will be curtailed. This means a further drop in production and factory closures. The first wave occurred after the EU's actions blocked its market access to more than 100 billion cubic meters of Russian natural gas. Now, the same scenario could be repeated with the US.
Russia is waiting…
Ironically, only Russian natural gas can save European industry in this situation. Europe will continue to refer to American LNG and Russian gas as "the molecule of freedom". Qatari LNG will not help here, simply because the EU will impose the exact same fines for methane emissions. Meanwhile, Qatar lagged behind both the US and Russia in terms of supply volume. Apparently, the US Department of Energy will not need to do anything—it will not need to impose sanctions or bans. As soon as heavy fines loom over the heads of American LNG suppliers, they will turn around and head toward Asia, bypassing Europe. It appears, therefore, that the European Union will have to find a way to modify its new environmental regulations or at least delay their implementation. The fact is that Brussels has already thought of an amusing game for 2027: "How to survive the winter without Russian LNG".
Difficult winter
This coming winter, the demand for gas imports in Europe will rise sharply. First, this will be the first winter without Russian LNG, the second-largest supplier after the United States. A complete ban on LNG from Russia will take effect in January. Second, due to the crisis in the Middle East and rising gas prices, the rate of injecting gas into underground storage facilities for the winter has slowed down. It is already clear that less gas will be funneled into underground storage facilities than desired. All these factors will contribute to an increase in gas prices. Thus, Europe will first have to test what it is like to survive the winter without Russian LNG and with incomplete gas storage facilities. Any simultaneous problems with American and Qatari LNG would be highly disruptive.
Gloomy future
It is true that the EU's situation will not improve significantly in the future, allowing it the luxury of imposing fines on LNG suppliers. From November 2027, Brussels plans to completely ban natural gas supplies through Russian pipelines. Unless Hungary and Slovakia challenge the decision of Brussels, this will indeed happen. The elimination of Russian LNG and its share of pipeline gas in the European market means that something else will have to take its place. American LNG is the obvious candidate, as it has the capacity to do so. Therefore, it is highly probable that in 2027, American LNG supplies will surpass all gas supplies from Norway for the first time in EU history. Europe has never experienced such dependence on a single supplier. This means it will have to be even more compliant with its partner across the ocean.
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