- European Union member states have agreed to impose maximum methane intensity values on all producers sending fuels to Europe.
- In terms of methane intensity in oil and gas production, the United States ranks 10th, emitting 8.18 tonnes of methane per kiloton of oil energy equivalent.
As part of efforts to reduce overall emissions and measure pollution from their energy suppliers, European Union member states have agreed to impose maximum methane intensity values on all producers sending fuels to Europe. According to the Natural Resources Defense Council, methane is the primary component of natural gas. It is a far more potent greenhouse gas than carbon dioxide regarding climate-warming potential. United States Liquefied Natural Gas (LNG) exports to Europe remain strong in 2023, valued at around $14 billion through August, with Europe accounting for two-thirds of all US LNG exports.
However, this means US LNG suppliers will risk losing sales to Europe if the methane intensity of the gas contained in their shipments fails to meet the standards the EU will set. As Europe’s top supplier of LNG, the US has been the primary beneficiary of the pivot by utilities to replace sharply lower Russian pipeline gas supplies with imports from other origins and in the form of LNG. But following the EU deal yesterday to place methane limits on Europe’s oil and gas imports from 2030, US LNG shippers will be anxious that their lucrative European market may be at risk due to the enduring high levels of methane emissions throughout the US natural gas supply chain.
According to the International Energy Agency’s methane tracker, the US oil and gas industry is the largest source of methane in the country, emitting 12,297 kilotons (Kt) of methane in 2021 and ranking second behind Russia (14,866 Kt). In terms of methane intensity, or a measure of how much methane is emitted in oil and gas production, the US ranks 10th, emitting 8.18 tonnes of methane per kiloton of oil energy equivalent (ktoe). Given the importance of the gas-fired industry across Europe, it is unlikely that policymakers will impose such harsh standards that may limit volumes from critical suppliers and potentially impact local power markets.