The Trump administration has an opportunity to free the U.S. of draconian climate regulations and directives the European Union (EU) has imposed on American oil and gas companies for years, energy sector experts and industry insiders told the Daily Caller News Foundation.
Though the Trump administration made a major trade deal with the EU in July that benefitted American energy, the EU still imposes a number of climate regulations and directives that drive up U.S. energy costs, according to some energy policy experts. The Trump administration is positioned to pressure the EU into a fairer trading atmosphere and ease burdens on the American energy sector, industry insiders told the DCNF.
“It’s going to take the pressure of the Trump administration in the trade negotiations to get the EU to back down from these extraterritorial regulations imposed on American companies, including U.S. oil and natural gas producers,” Vice President of Corporate Policy at the American Petroleum Institute (API) Aaron Padilla told the DCNF. “The EU should not make it more difficult for companies to provide the energy that their consumers need.”
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Energy sector experts and insiders specifically pointed to the Critical Entities Resilience Directive (CER), the EU methane regulation and the Corporate Sustainability Due Diligence Directive (CSDDD). The CSDDD requires companies to have a net-zero transition plan and the EU methane regulation places additional stringent emissions standards on the oil and gas industry, while the CER requires companies to report a whole host of risks that add red tape, according to energy insiders.
Trump has threatened the EU with tariffs to buy American oil and gas, and part of the major July trade deal required the EU to purchase $750 billion in American energy by 2028.
“The Administration continues to address trade barriers against every American industry with our trading partners, and commitments from the EU, Japan, South Korea, and other countries to buy hundreds of billions of dollars’ worth of American energy over the next few years reflect how President Trump is delivering on his agenda of fair trade and drill, baby, drill,” White House spokesman Kush Desai told the DCNF.
Tammy Nemeth, a strategic energy analyst, told the DCNF that the climate regulations and directives are burdensome to American oil and gas companies. Nemeth argues that these regulations increase costs on U.S. businesses and Americans as companies hoping to do business in the EU have to wrestle with layers of red tape and adopt a net-zero transition plan. It is difficult to estimate, but compliance with EU climate regulations and directives can add significant costs, according to Nemeth.
“I think if companies are approaching [these non-tariff barriers] with open eyes, they’ll say we need the government to help us maybe eliminate some of these non-tariff barriers, because if the compliance costs [equate to a] 10 to 30% increase, then that’s something that they have to pass on, not just to those to whom they’re exporting, but also domestically, because those are costs that are borne by the entire company,” Nemeth told the DCNF. “[These non-tariff barriers] could therefore increase costs to Americans, not just passing it on only to the Europeans, because all of those bureaucratic structures have to be established within the company, and that’s cost they have to absorb or pass on in some way.”
If American oil and gas companies decide to not comply with the climate regulations, they can be heavily fined or essentially forced out of trading with the EU, Nemeth said.
“It’s really quite absurd,” Nemeth said, noting that the EU already requires a significant amount of red tape and environmental reporting paperwork. Nemeth added that all the reporting also can open companies up to environmental litigation.
API has generally supported President Donald Trump’s energy policy and praised his April decision to exempt oil and gas from new reciprocal tariffs, however, the trade association argues that now is the time to force the EU into relaxing its non-tariff barriers. API has asked the Trump administration to negotiate EU non-tariff barriers, including the CSDDD and the EU methane regulation, to ease burdens on American oil and gas companies hoping to do business in the EU, Padilla noted.
Secretary of State Marco Rubio rejected the International Maritime Organization’s net-zero framework on Tuesday, stating that the U.S. “will not tolerate any action that increases costs for our citizens, energy providers, shipping companies and their customers, or tourists.”
An EU official told the DCNF that negotiations with the U.S. are still ongoing, though any amendments to EU legislation would represent a non-negotiable boundary for the EU.
Energy costs have been a major concern for European officials following the 2022 spike in prices, which hit the continent’s economies after Russia’s invasion of Ukraine and weaponization of its natural gas supply. Many European countries are also devoted to a green energy transition as the continent faces high electricity prices and grid instability.
Notably, severalEuropeancountries have recently moved to rethink or reverse their anti-nuclear pledges in search of a sustainable energy resource.
“We say to the Europeans, you don’t need to put these non-tariff barriers into place. The only result of them is going to be to make it more expensive and difficult for Europeans to import the energy that they need from the United States. Don’t bite the hand that feeds you,” Padilla said. “You need oil and you need natural gas from the United States, especially in the wake of Russia’s invasion of Ukraine. So, don’t make it more difficult to get that energy that you need from the United States.”
Nemeth and other energy policy experts argued that these non-tariff barriers work to benefit EU oil and gas companies and disincentivize American companies from competing in the European market.
“For years, the European Union has used trade policy as a backdoor to impose its climate agenda on American businesses. Their reporting rules and carbon tariffs aren’t about saving the planet, they’re about controlling markets and kneecapping competitors,” CEO and founder of the American Energy Institute Jason Isaac told the DCNF. “As President Trump negotiates with the EU, the first order of business must include a clear commitment to scrap these schemes. The United States should set the terms and not let European bureaucrats punish American energy.”
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Is the push and pull in the energy and climate regulatory environment hurting the ability for companies to finance and complete energy projects in the United States? The head of Shell in the United States, Colette Hirstius, said she believes it is in a recent interview.
“I think uncertainty in the regulatory environment is very damaging,” Hirstius said, adding, “However far the pendulum swings one way, it’s likely that it’s going to swing just as far the other way.”
Hirstius was addressing the moves made by the Trump administration to slow the progress of the offshore wind industry, which was the crown jewel of the Biden administration’s headlong rush into a government-subsidized energy transition. Trump’s regulators, led by Secretary of Interior Doug Burgum and Energy Secretary Chris Wright, have taken a series of actions in compliance with executive orders signed by Trump since January to halt several projects that were under construction, roll back federal subsidies, and review permits they believe were hastily issued in non-compliance with legally required processes.
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“I certainly would like to see those [offshore wind] projects that have been permitted in the past continue to be developed,” Hirstius said.
That hope seems discordant, coming as it does amid Shell’s ongoing effort to step back from offshore wind and refocus more of its capital budget back to its core oil and gas business following years of unprofitable ventures into renewables. It also seems fair to point out that the political pendulum about which Hirstius warns already swung wildly in favor of offshore wind and other wind and solar projects in the Biden administration. It is odd that Shell only now decides to roll out that particular warning.
Shell was pulling back from its major offshore wind investments while Trump was still fighting off efforts by an array of Democratic prosecutors to put him in prison. In June 2023, for example, the company announced its intent to offload its 50% share in the Southcoast project offshore Connecticut amid Biden era high inflation and supply chain challenges that were already rocking the industry at the time. Nine months later, Shell sold the interest to another party.
The company announced last December that it was “stepping back from new offshore wind investments” as part of a company-wide review implemented by then-new CEO Wael Sawan in mid-2023. A month later, it cancelled its interest in the Atlantic Shores project, writing off $1 billion in investments in the process. Shell’s ventures into the U.S. offshore wind arena had run head-long into economic reality long before the second Trump presidency came along.
That Atlantic Shores project has become an item of special interest inside the Interior Department’s Bureau of Ocean Energy Management (BOEM) in recent days. In a court filing last Friday, BOEM Deputy Director Matthew Giacona said the Bureau plans to conduct a full review of the process that went into approving Atlantic Shores during the Biden presidency. He also said the review would likely expand to other offshore wind projects given the administration’s concerns that Biden’s regulators failed to properly assess the true environmental impacts these major industrial installations create.
In addition to that, the Daily Caller’s Audrey Streb reported on Monday that Biden regulators gave the go-ahead to some of these offshore projects despite internal concerns expressed as early as 2021 that granting long delays in their decommissioning processes “increases risk to the federal taxpayer.” Offshore developers are normally required to provide financial assurance to pre-fund such costs, but big Danish developer Orsted and others were requesting delays as long as 15 years in that requirement to make their project economics work.
Hirstius’s concerns about regulation are absolutely valid: Having such certainty is a crucial element for any company to be able to plan its future business endeavors. But every presidency has a duty to ensure that actions by prior administrations meet the mandates of prevailing laws. It has long been feared that the Biden regulators cut important corners related to environmental and marine mammal protections to speed some offshore wind projects through the process.
As this current review process plays itself out, Shell might well find itself glad it cut its losses in this failing offshore wind sector when it did.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
The United States produced a record-high 13.6 million barrels of crude oil per day in July, up from 13.5 million barrels per day (b/d) in June, the Energy Information Administration (EIA) said in its latest Short-Term Energy Outlook.
U.S. crude oil production in July was higher than previously estimated, prompting the agency to raise the starting point of its forecasts for the remainder of 2025 and 2026. The agency now projects U.S. crude oil production will average 13.5 million b/d in both 2025 and 2026. For the remainder of 2025, this represents a 100,000 b/d increase from the agency’s August forecast, while 2026 oil production was projected 200,000 b/d higher.
The agency also raised its forecasts of crude oil production in the Gulf of America in 2025 and 2026, noting that some offshore drilling projects are ramping up output faster than expected.
The EIA expects global production of crude oil and petroleum products to increase through 2026, leading to continued growth in international inventories. The agency projects this inventory growth will put downward pressure on global oil prices, with benchmark Brent crude declining to an average of $62 per barrel in the fourth quarter of 2025 and to $52 per barrel in 2026. Brent crude oil spot prices averaged $68 per barrel in September.
The EIA said a key uncertainty in its forecast is the pace at which China continues to purchase oil to put into storage. If China continues to build inventory at the pace estimated in recent months, crude oil prices could be higher than now forecast, the agency said.
The agency projects U.S. dry natural gas production will reach 107 billion cubic feet per day (Bcf/d) in 2026, up 1.0 Bcf/d or about 1% from the EIA’s previous forecast. U.S. dry natural gas production in 2024 averaged approximately 103.5 Bcf/d, according to the agency.
The market price of natural gas at the Henry Hub in Louisiana is expected to rise from an average of $3 per million Btu in September to $4.10 per million Btu in January 2025, according to the EIA’s forecast. The agency expects the Henry Hub price in January will be 50 cents lower than was projected in September, primarily because U.S. gas production will be higher than previously expected. Early Wednesday, the spot price for natural gas at the Henry Hub was at $3.38 per million Btu.
The EIA projects U.S. LNG export capacity will increase by 5 Bcf/d in the remainder of 2025 and in 2026 as production continues to ramp up at the Plaquemines LNG facility in Louisiana and the Corpus Christi plant in Texas. The additional capacity should increase total U.S. LNG exports to 15 Bcf/d in 2025 and to 16 Bcf/d in 2026, up from 12 Bcf/d in 2024, the agency said.
