Biden administration rejects Cheniere’s request to circumvent LNG pollution rule

WASHINGTON, Sept 6 (Reuters) – The U.S. Environmental Protection Agency (EPA) said on Tuesday it had rejected a request from major liquefied natural gas (LNG) exporter Cheniere Energy Inc. (GNL.A) to exempt the turbines at its two US Gulf Coast terminals from a dangerous pollution rule.

The release raises questions about whether the Texas-based company will have to cut supercooled fuel exports to install new pollution control equipment at its facilities at a time when Europe depends on increased LNG shipments from the United States to compensate for reductions from Russia. .

Europe is facing its worst gas supply crisis, with energy prices soaring and German importers discussing possible rationing in the European Union’s biggest economy after Russia slashed gas flows west. Moscow cited a pipeline fault for the shutdown, but Europe sees it as apparent retribution for Western sanctions imposed on Russia for its invasion of Ukraine.

“Although the EPA denies Cheniere’s request for a special subcategory to comply with the turbine rule, the Agency will continue to work with them and other companies as needed to ensure they comply. obligations of the Clean Air Act,” EPA spokesman Tim Carroll said in an email. .

Gas turbine owners and operators had a Sept. 5 deadline to comply with National Hazardous Air Pollutant Emission Standards (NESHAPs), which President Joe Biden’s administration implemented after an 18-year stint. year.

The rule imposes restrictions on emissions of known carcinogens like formaldehyde and benzene from stationary combustion turbines, such as those used by LNG facilities.

Cheniere had asked the Biden administration to exempt a specific type of turbine it installed at its LNG terminals from NESHAP limits, arguing that they would reduce shipments from the major US exporter for an extended period and jeopardize efforts. country to increase supplies to Europe. . Read more

Cheniere was the only company to request such an exemption, according to the EPA. The company said the turbine model it uses at its Texas and Louisiana facilities is the best technology to withstand the types of storms that often hit the Gulf Coast, but the equipment is also exceptionally difficult to modernize, and that the engineering and installation of pollution controls could take years.

Cheniere spokesman Eben Burnham-Snyder said that while the company “strongly disagrees” with the EPA’s decision, “we will work with our state and federal regulators to develop solutions that ensure conformity”.

He said the decision could result in “undue expense”, but added that full compliance would not result in a significant financial or operational impact and would not affect his ability to supply LNG to customers and countries. of the whole world.

Gas turbines emit formaldehyde and other dangerous pollutants through a chemical transformation that occurs when methane, the main ingredient in natural gas, is overheated.

About 250 U.S. gas turbines are subject to the new rule, according to an EPA list, including nearly a quarter from Cheniere.

The Houston-based company accounts for about 50% of US overseas LNG shipments.

Ilan Levin, associate director of the Environmental Integrity Project, said the EPA’s decision to deny Cheniere’s application came as no surprise as it had warned the company it had to meet the standard for years. .

Reuters reported last month that the EPA questioned Cheniere’s selection of gas turbines without adding pollution controls in 2011 and again in 2013. Read more

“We commend the EPA for enforcing the law and ensuring that people living near these plants in the Coastal Bend and Southeast Texas/Southwest Louisiana have the same protections from clean air than everyone else,” he said.

Shares of Cheniere closed down 2.3% at $158.58 on Tuesday.

Reporting by Valerie Volcovici in Washington and Nichola Groom in Los Angeles; Editing by Jonathan Oatis, Matthew Lewis and Himani Sarkar

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