A Cautious Note

Natural Gas Keynote Address: 23rd Annual ERRA Conference
Price and Non-Price Regulation in the Gas Sector
Fred H. Hutchison, 27 April 2026

Mr. Daraselia, Mr. Petrov, distinguished panelists, colleagues… thank you. I want to use this time well, because the subject is more urgent than the conference program may suggest… And while I am aware that ERRA is an organization that has expanded far beyond it’s Europe-centric origins, because we are assembled here in this grand European capital, I will direct my remarks primarily to our European friends.

Fatih Birol, the Executive Director of the International Energy Agency, has said repeatedly and on the record—not once, but in multiple recent forums—that the world is navigating the most serious energy security crisis in history. He is speaking globally. About supply systems under stress, price volatility, and geopolitical risk across every major consuming region on earth. Fatih is not a man given to hyperbole, and he has not walked it back.

Europe is not exempt from that global crisis. It is, in fact, its most acute theater. On top of everything the rest of the world faces, Europe is simultaneously managing two massive region-specific supply dislocations that no other major consuming region is dealing with. And I raise all of this because one occupational hazard of being a regulator is that you are trained to manage situations through established frameworks. That instinct is right in normal times. But the frameworks, tariff structures, and procurement habits designed for normal times may not be adequate to what is actually in front of us.

I want to say something that the energy industry rarely acknowledges openly, because intellectual honesty demands it and this audience is too sophisticated to be misled by a selective account.

The three winters following the Russian gas cutoff in 2022 were all warmer than normal across most of Europe. That meteorological good fortune significantly softened what could have been a humanitarian catastrophe. But here is what mild weather did not prevent: European governments spent an estimated 800 billion euros on energy price subsidies. European industries curtailed production—and a portion of that demand destruction, particularly in energy-intensive manufacturing, is very likely permanent. Companies do not re-invest in facilities they have already written off their books.

You cannot budget for luck. You cannot subsidize your way to energy security indefinitely. And you cannot afford to destroy what remains of Europe’s industrial base in another crisis.

Meanwhile, the underlying supply deficit has not resolved. It has compounded. The Russian phase-out removed roughly 140 to 150 bcm per year from Europe’s supply base. And this spring, Iranian strikes on Ras Laffan created force majeure conditions affecting Qatari LNG capacity–a reminder that replacing one hostile supplier with a geographically vulnerable one is not diversification. The cumulative incremental supply gap Europe must now fill above and beyond its pre-crisis baseline runs to approximately 55 bcm per year.

The United States is the obvious anchor for European gas supply security. We are currently exporting at a pace of 180 bcm per year—up over 20 percent year-on-year—with nearly 72 percent of those cargoes flowing to Europe today. By 2030 our capacity will reach 272 bcm per year, half again as large as Qatar’s entire 2030 productive capacity.

But the U.S. government does not dispatch LNG cargoes. There is no strategic reserve. This is a private industry, and the overwhelming majority of USLNG export capacity is already committed under long-term Sales and Purchase Agreements, which are typically 20-year contracts, to a global mix of buyers. The LNG Allies contract database documents 129 active contracts representing 304 bcm per year of committed supply across 71 companies in 26 countries.

Of that 304 bcm per year, European utility-class buyers—RWE, ENGIE, PKN Orlen, SEFE, Naturgy, Uniper, Eni, Centrica, OMV, EnBW, and their peers—hold contracts totaling 60 bcm per year. Just one-fifth of all contracted USLNG volume.

Another 64 bcm per year sits with European-headquartered portfolio traders and majors—TotalEnergies, Shell, BP, Glencore, Equinor. These companies are not in the business of guaranteeing European supply. They deliver molecules to wherever the price signal is strongest—as they did in 2022, and will do again. The remaining 180 bcm per year, nearly 60 percent of all contracted USLNG, is held by Asian utilities, American producers, and Middle Eastern national oil companies with no obligation to Europe whatsoever.

Now, 60 bcm against a 55 bcm gap might appear to balance. But follow this carefully. Of that 60 bcm, roughly 34 bcm is contracted against USLNG export terminals that are already operating and already flowing. Those volumes were in Europe’s supply picture before the Russian phase-out and the Qatar disruption created the new gap. They are embedded in the pre-crisis baseline. You cannot count the same molecules twice.

The remainder, on the order of 25 bcm per year, is contracted against USLNG export projects now under construction or at final investment decision, supply that is coming but not yet flowing. Against a 55 bcm incremental gap, that still leaves a substantial uncovered position… volumes that no European utility has yet locked in from any source.

Europe is currently receiving 72 percent of all USLNG exports because European gas prices are high enough today to attract those cargoes. That is not a supply security strategy. It is a price signal, and it will reverse the moment Asian demand recovers.

Three points for the regulators in this room.

On storage: the EU has rightly treated it as a security asset since 2022, with mandatory filling targets now extended through 2027. But that framework expires. Push for permanent measures, because energy supply security cannot be managed crisis-by-crisis on two-year renewals, and the cost of strategic reserves should be explicit, socialized across the tariff base, and visible to consumers.

On LNG terminal access: examine whether your cross-border tariff frameworks are up to the current and future challenges you now face. I am aware there is a great deal of work underway in this space, and I urge you to accelerate your cooperation.

On procurement policy: long-term contracted USLNG offers price stability that spot markets cannot. Consider whether your frameworks give utilities the right incentives to hold contracted supply—because a 55 bcm gap does not close by itself.

Now let me address a question I hear consistently in European capitals—and one made newly urgent by a recent FT article on European ratification of the EU-U.S. trade agreement: Can a U.S. president revoke USLNG export authorizations, or withhold what one U.S. ambassador recently called “favorable access” to American LNG as a trade lever?

The answer is statutory… and the answer is no. USLNG flows under long-term, project-specific export authorizations issued by the Secretary of Energy under Section 3 of the Natural Gas Act of 1938. Once granted, these authorizations are immutable. They are not executive orders. They are not presidential proclamations. Revoking one would require a formal administrative proceeding, with notice, comment, and a reviewable record—a process that would take years and face immediate legal challenge from authorization holders who have invested tens of billions of dollars in reliance on those approvals.

Furthermore, as I said, the vast majority of USLNG moves under long-term Sales and Purchase Agreements, contracts running 15 to 20 years, governed by commercial law, with force majeure and damage provisions. No president, and in fact no U.S. official, is a party to those contracts. No such official can instruct a USLNG export terminal to turn away European customers any more than they can instruct Boeing to stop delivering aircraft to Lufthansa.

Let me be crystal clear: the executive branch of the U.S. government sets the tone of the LNG trade relationship. It does not control the molecules.

I want to close with something that goes beyond the supply and demand arithmetic.

I love Europe. I love its cities and its countryside… the castles and chateaux, the medieval squares, the art and architecture that took a thousand years to build. But what I love most about Europe is that its nations are America’s truest friends and most steadfast allies. The democracies of Europe, together with those of the United Kingdom, Japan, South Korea, Canada, and Australia, represent something irreplaceable: a community of free people committed to open societies, the rule of law, and human dignity.

For that community to endure, its economies must be robust. A Europe deindustrialized by a generation of energy insecurity—its chemical plants shuttered, its manufacturers relocated—is not only a poorer Europe. It is a weaker democratic partner at a moment when the world can ill afford weaker democracies. Guard your industrial might as you guard your art, your history, and your cafés. They are not separate things. They are all expressions of the same civilization, and they all depend, ultimately, on affordable, reliable, secure energy.

The United States is ready to provide it. What we need are the long-term contracts—above and beyond what is already in the baseline—so that the next normal winter does not become the crisis that three mild ones deferred.

Fatih Birol is right. The world is in the most serious energy security crisis in history. Europe is its most exposed theater. This does not resolve itself. It ends because the people in rooms like this one make decisions equal to the moment.

Thank you, and may God bless you in the months and years ahead.

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The 23rd Annual Conference of the Energy Regulators Regional Association was held in Bratislava, Slovakia, on 27-28 April 2026. The overarching theme was “Transforming Energy Policies—Adapting Energy Regulation.”