Europe’s regulatory overreach threatens energy security

ABOUT THE AUTHOR: Sergio de la Peña, a retired U.S. Army colonel, is a former deputy assistant secretary of defense for Western Hemisphere affairs.

At a moment of renewed instability in the Middle East and persistent uncertainty in global energy markets, reliable American energy is not a luxury for our allies. It is a strategic necessity. President Donald Trump understood that during his first term, when he made American energy dominance a pillar of both economic policy and national security strategy.

By unleashing U.S. oil and natural gas production, cutting red tape, and accelerating liquefied natural gas export approvals, the Trump administration helped turn the United States into the world’s leading energy producer. That achievement delivered jobs and growth at home. It also gave Washington a stronger geopolitical hand abroad. American energy became more than a commercial success. It became a strategic asset.

That was especially clear after Russia invaded Ukraine. As Europe scrambled to replace Russian pipeline gas, the United States stepped up. American LNG exports surged across the Atlantic, helping reduce Europe’s dependence on Moscow and demonstrating that U.S. energy could serve as the backbone of allied energy security. Today, the United States supplies roughly 55% of Europe’s LNG imports; a reminder that energy infrastructure, energy exports and alliance security are deeply connected.

That is why the European Union’s Corporate Sustainability Due Diligence Directive, or CSDDD, deserves far more scrutiny in Washington than it has received. Though it may sound like another distant piece of Brussels bureaucracy, it carries serious implications for American energy exporters and for the long-term resilience of the trans-Atlantic alliance.

The directive imposes sweeping obligations on large companies, including American firms operating in Europe or selling into European markets. It requires them to monitor and manage human rights and environmental risks not only within their own operations, but across sprawling global supply chains involving contractors, subcontractors, suppliers and other business partners. If European authorities or courts later determine that a company’s due diligence was insufficient, the legal and financial consequences can be significant. This is classic Brussels overreach that creates uncertainty where energy markets need confidence.

LNG export terminals and related infrastructure are among the most capital-intensive projects in the modern economy. They require billions of dollars in upfront investment, years of permitting and construction, and long planning horizons. Investors will tolerate risk when the rules are clear. However, they pull back when legal exposure is vague, expansive, and potentially subject to shifting political and judicial interpretation overseas. Europe’s regulatory overreach is therefore becoming a strategic error.

Making it harder for American firms to invest in export capacity tied to trans-Atlantic demand may affect American exporters at the margins, but the consequences will fall much harder on Europe and on the broader Western alliance. A Continent that only recently learned the cost of overreliance on Russian gas should not be adopting policies that risk pushing away dependable American suppliers and provide Moscow the pathways it is seeking back into European energy markets. Nor should it create openings for China to expand its role in financing, building or shaping critical energy infrastructure in ways that carry their own long-term strategic consequences.

None of this means companies should be exempt from reasonable environmental or human rights standards. American energy firms already operate within substantial environmental compliance frameworks and under widely recognized business-conduct expectations on human rights and supply-chain due diligence. But there is a meaningful difference between clear rules and open-ended liability, between accountability and a legal framework so ambiguous that it invites uncertainty and litigation.

Trump has long argued that American energy dominance is central to economic growth, national security, and U.S. leverage abroad. Europe’s expanding liability regime now tests not only that vision, but also Washington’s commitment to using American energy strength to reinforce European security and NATO resilience. Defending American energy exporters from extraterritorial regulatory burdens should therefore be a priority.

That means pressing Brussels for clearer safe harbors, opposing discriminatory enforcement, and making energy trade a central part of trans-Atlantic negotiations.

Pages 25-27 of the 2025 National Security Strategy clearly express the Trump administration’s views of U.S.-European relations.  It specifically addresses regulations by stating: “Continental Europe has been losing share of global GDP — down from 25 percent in 1990 to 14 percent today — partly owing to national and transnational regulations that undermine creativity and industriousness.” Europe can enhance its energy security by cutting unnecessary regulations, especially given that the U.S. provides the lion’s share of global maritime security. It is time for our partners and allies to share in the costs as well.

Energy security is national security, and American LNG has helped make Europe safer. At a time of fresh instability from the Middle East to Eastern Europe, undermining the secure supply chains that provide the Continent the energy they need and insulate them from coercion by hostile powers would be a costly mistake. Washington should say so clearly, before Brussels makes one.