Cheniere Seeking Renewal of Air Toxics Exemption

Cheniere is asking the US Environmental Protection Agency (EPA) to renew a longstanding exemption for some gas-fired turbines from air toxics rules, warning the regulations would impose significant costs and possible operations disruption for its two US Gulf coast facilities.

“The rule would have implications across the domestic energy sector and particularly in the LNG industry at a time when Russia’s invasion of Ukraine has shaken global energy markets and threatens to disrupt energy supply to Europe, where US LNG has a significant role to play in providing reliable supplies of natural gas,” Brittany Pemberton, an attorney with the firm Bracewell, representing Cheniere, writes in a March 8 letter to EPA officials.

At stake is potentially half of US LNG capacity, with Cheniere's two facilities — Sabine Pass LNG and Corpus Christi LNG — representing 45 million tons out of a total US LNG nameplate export capacity of about 91.3 million tons. Due to an explosion on Jun. 8, Freeport LNG, with 15 million tons of capacity is already out of action.

Clean Air Act

At issue is a 2004 rule governing toxic air pollutants under the Clean Air Act from certain types of gas-fired turbines, which has long been halted by the EPA for some energy facilities. The agency in March announced it would move forward with the requirements of the rule even while it continues to determine whether to remove the turbines as a regulated entity altogether.

According to the letter, Cheniere uses 62 of the regulated combustion turbines at its Texas and Louisiana facilities, and that they are necessary to drive compressors integral to the LNG refrigeration process. Moreover, the company argues that the turbines are located on elevated pedestals with limited space to install emissions control equipment.

“Potentially imposing significant costs and operational disruption on the US LNG industry at the same time the Administration is focused on Europe’s strategic need to break its reliance on Russian gas is counterproductive,” the letter says.

Under the Clean Air Act, industrial facilities with stationary equipment are required to curb emissions of “hazardous air pollutants,” or those with known human health effects, such as known carcinogens or chemicals linked to reproductive toxicity. For emissions from combustion turbines, the EPA has identified formaldehyde, toluene, benzene, and acetaldehyde as possible pollutants, though Cheniere argues that risks from turbine emissions are minimal.

Though it isn’t clear how broadly the turbine rules would impact other LNG or energy facilities, the regulatory flap illustrates some of the tension between the Biden administration’s stated pledge to supply more US LNG to Europe and its other climate and environmental agenda. Air toxics rules are a hot button issue for environmentalists, because of the human health implications, and especially relevant to Biden’s vow to protect vulnerable “environmental justice” communities often affected disproportionately by industrial pollution.