By Nichola Groom and Valerie Volcovici

PORTLAND, Texas – Cheniere, the largest U.S. exporter of liquefied natural gas, boasts that it’s helping to “improve local air quality in communities globally” because the cleaner burning fuel it ships displaces coal in power plants.

But in the Corpus Christi, Texas region, where the fuel is prepared for shipment, the company is making air quality worse -with the consent of state regulators.

Cheniere’s massive LNG plant, on the outskirts of the Gulf Coast city, has exceeded its permitted limits for emissions of pollutants such as soot, carbon monoxide and volatile organic compounds (VOCs) hundreds of times since it started up in 2018, according to a Reuters review of regulatory documents.

Instead of levying penalties for such violations, the Texas Commission on Environmental Quality (TCEQ) has responded by granting Cheniere big increases in the plant’s pollution limits, the documents show. The facility is now allowed to chuff out some 353 tons per year of VOCs, double the limit set out in its original permit eight years ago. The state raised limits on four other pollutants by more than more than 40%.

The issue has infuriated nearby residents who cite the frequency of large flares, used to burn off excess gas to relieve pressure, and evidence that local air quality has deteriorated significantly since the facility’s start-up. They have petitioned the state to crack down on the plant’s pollution rather than allowing it to emit more.

Texas regulators have acknowledged the plant’s impact on the local air quality: In its annual enforcement report for fiscal year 2019, the agency blamed the Corpus Christi region’s 83% increase in emissions from the prior year in part on the startup of the Cheniere facility.

Cheniere said in a statement to Reuters that it had initially underestimated emissions from the plant because it was required to apply for the original permit before its engineering work was completed. The company said its design and equipment adhere to federal standards requiring the “best available control technology” to limit pollution.

When actual emissions exceeded those estimates, Cheniere sought amendments from regulators to “reconcile” the higher pollution with its early assumptions, the company said.

The plant could not run consistently and efficiently under the lower pollution limits, which would require frequent shutdowns, plant general manager Ari Aziz said in an interview.

The emissions from Cheniere’s Corpus Christi LNG facility highlights a broader danger of surging air pollution as the United States and other nations seek to expand U.S. gas exports. LNG facilities are substantial polluters, and regulation will be key to ensuring their emissions don’t pose big health problems for residents near the plants.

The administration of U.S. President Joe Biden views expanding the LNG industry as a key tool for helping Europe reduce its energy dependence on Russia, which has been aggressively sanctioned by Western nations since invading Ukraine in February. The LNG expansion policy, however, could undermine the administration’s promises to combat climate change and provide cleaner air to communities living near industrial sites.

Biden’s Energy Department said in a statement to Reuters that expanding LNG to address global energy shortages “must be balanced” with the fossil fuel’s environmental impacts. The administration said it supports research into technologies that will mitigate such impacts “in a just and sustainable way,” without specifying any particular technology.

U.S. LNG export capacity is on track to soar by 40% in the next two years, according to the Department of Energy, with companies including Cheniere, Freeport LNG, and Sempra LNG eyeing new projects and big expansions.

“They tell us we need to export more, we need to help our friends in Europe. But what about us?” said Elida Castillo, director of Chispa Texas, an organization representing the low-income, mostly Hispanic communities of Gregory and Taft, near the terminal. “We’re the ones who are left to suffer with all the pollution.”

VIOLATIONS, BUT NO PENALTIES

In July of last year, the TCEQ opened an enforcement probe into the Corpus Christi facility following 293 instances in 2020 when plant emissions exceeded permitted limits. The excess pollution resulted in 19 violations that the agency investigated for potential enforcement. All were resolved without penalties on the company.

The probe found, for instance, that the facility’s condensate tank, where compounds removed from natural gas are stored, emitted more than two and a half times its allowable level of VOCs for a period of 13 months. The chemicals, which can include compounds like benzene, ethylene, toluene and formaldehyde, are removed from natural gas during the liquefaction process and can cause a range of health effects from eye irritation to cancer.

According to state records, the violation began in October 2019 and ended in November of 2020 when TCEQ officials granted Cheniere’s request to be able to emit more pollution. That permit amendment also resolved two other violations, for exceeding, on several occasions, the hourly limits of VOCs and carbon monoxide emitted from gas flares, an enforcement document showed.

A TCEQ spokesperson said changing the plant’s permitted pollution limits was “an acceptable resolution” because Cheniere could demonstrate that those increases in emissions have not put the Corpus Christi area’s air quality in violation of federal standards.

The U.S. Clean Air Act’s National Ambient Air Quality Standards impose limits on the amount of pollution in a given area and restrict further industrial development only when pollution levels exceed those limits.

The amendment stands out as an extraordinary accommodation of an industrial polluter at the expense of air quality for local residents, said Wilma Subra, a Louisiana-based environmental scientist and president of the environmental consulting firm Subra Company, who reviewed the Reuters reporting. Subra said Texas regulators are essentially telling Cheniere: If you can’t meet clean0air standards, “we would be glad to help.”

The TCEQ has granted the Cheniere plant two additional amendments that raised pollution limits and is considering a third.

The Cheniere plant is regulated as a major pollution source under federal law because it emits more than 250 tons of pollution. The designation requires the plant to demonstrate that it uses state-of-the-art pollution controls, but specific limits are left up to state regulators.

Kelly Haragan, an environmental law professor at the University of Texas law school, said that the pattern of adjusting emissions limits higher to resolve pollution violations at Cheniere raised questions about whether the facility was indeed using the most reliable emissions control technology.

Cheniere said it was complying with the regulation.

Residents near the Cheniere plant worry about the health effects of the area’s expanding industrial sector.

“They shouldn’t be granted permits that just allow the emissions to keep going up,” said Jennifer Hillard, an architect whose home in the waterfront town of Ingleside on the Bay faces the LNG tankers coming in and out of the Cheniere plant. “What is the impact of these types of deviations? … Does anyone know? Is anyone watching?”

Encarnacion Serna, a retired chemical engineer whose home in Portland’s East Cliff neighborhood is less than 3,000 feet from the Cheniere terminal, said a massive flaring event there last month created “unbearable heat and glare” that forced him to send his visiting grandkids to another relative’s house further away.

Serna, 70, has already filed three complaints with concerned neighbors against Cheniere this year in response to large flaring events. “We are defending our communities from being obliterated,” he said.

Serna and other residents of Portland, Gregory and Ingleside will challenge the latest Cheniere air permit application at a contested case hearing on June 30.

Cheniere is currently seeking even higher limits on its carbon monoxide and VOC emissions at the Corpus Christi facility, according to regulatory documents, citing the presence of more impurities in its natural gas stream than it initially expected.

Longer-term, Cheniere has launched a major expansion of the plant. The TCEQ has already approved the necessary air permits.

(Reporting by Nichola Groom and Valerie Volcovici; editing by Richard Valdmanis and Brian Thevenot)

(Reuters) -The International Monetary Fund executive board said Friday it had concluded its fourth and fifth reviews for Ecuador’s 27-month Extended Fund Facility (EFF), allowing for the immediate disbursement of about $1 billion.

The board said Ecuadorian authorities planned to use the funds for budget support.

The announcement comes after nearly two weeks of sometimes-violent mass protests led by indigenous groups demanding lower fuel and food prices.

Deputy Managing Director Antoinette Sayeh said in a statement that Ecuador’s 4.2% GDP growth in 2021 had been supported by good macroeconomic management and a successful vaccination campaign, and that macroeconomic and financial stability had been preserved.

“While the ongoing war in Ukraine is adversely affecting some export sectors, higher oil prices are improving Ecuador’s external and fiscal balances,” she said.

The IMF approved a 27-month EFF arrangement for Ecuador worth about $6.5 billion on September 30, 2020.

(Reporting by Brendan O’Boyle; Editing by Edwina Gibbs)

By Sinéad Carew

(Reuters) – Shares in the biggest U.S. banks rallied on Friday after they passed the Federal Reserve’s annual health check, but Bank of America underperformed with test results implying it needs a larger-than-expected capital buffer, which could limit share buybacks and dividends.

While the broader equity market also rallied on Friday, Wells Fargo & Co, up 7.5%, was the biggest gainer among the 34 lenders that underwent the Fed’s so-called stress test, which measures how they would fare in a hypothetical severe economic downturn.

The group would have roughly twice the capital required under Fed rules in the downturn scenario, it said.

“The big picture is that banks are extremely well capitalized and could manage through a downturn,” David Konrad, analyst at Keefe, Bruyette & Woods (KBW).

But the results implied a big variation in the size of banks’ stress capital buffers (SCB) – an extra layer of capital banks must hold to cover potential losses and support their daily business which the Fed will set in coming weeks.

Banks expected to have to hike their stress capital buffers were Bank of America, Citigroup Inc and JPMorgan Chase & Co, causing their shares to underperform on Friday.

Morgan Stanley analyst Betsy Graseck said Bank of America, Citi and JPM may need to keep dividends flat and eliminate buybacks.

Those changes are likely to reduce Bank of America’s earnings per share by 1-2%, said Graseck, who dropped her price target for the stock to $47 from $49. She estimated a 1-5% impact on Citi’s EPS and cut her price target for that stock to $57 from $60. JPMorgan’s EPS will drop 1-2%, she estimated, lowering her price target to $149 from $152.

KBW’s Konrad also estimated that the three banks’ “buybacks will have to be materially adjusted downward.”

He sees the buyback adjustments shaving about 5% off EPS at Bank of America, and reducing EPS about 2% at JPMorgan and Citi.

Wells Fargo investors were relieved as its stress capital buffer is expected to remain almost unchanged from last year, Konrad said.

Bank of America shares closed up 0.7%, while Citigroup finished up 3.3% and JPMorgan ended with a 3.0% gain. The broader S&P 500 financial services index closed 3.8% higher.

The U.S. units of foreign banks performed well.

UBS Group AG closed up about 6%, while Credit Suisse added 5.5%. Other strong performers included Ally Financial, up 5.0%, and Discover Financial Services, which climbed 5.4%.

(Reporting by Sinéad Carew, Elizabeth Dilts Marshall and Pete Schroeder; editing by Jonathan Oatis, Michelle Price and Richard Chang)

By Caroline Valetkevitch

NEW YORK – Stocks on global markets rallied on Friday and registered strong gains for the week as a recent slide in commodity prices eased worries about inflation and the rate hike outlook.

The S&P 500 climbed 3.1% in its biggest daily percentage gain since May 2020, and the MSCI global index rose 4.8% for the week, snapping three straight weeks of declines.

U.S. Treasury yields edged up from two-week lows.

Investors have been worried that aggressive interest rate hikes by the Federal Reserve and other major central banks to combat inflation could cause a recession, which would reduce demand for commodities and other items.

“The (stock) market came into this week oversold, so it was time for a bounce,” said Quincy Krosby, chief equity strategist at LPL Financial in Charlotte, North Carolina.

“We’ve seen oil prices come down along with other commodity prices,” she said, adding that the market’s move is reflecting “expectations of at least a marked slowdown if not an out-and-out recession.”

Also, the University of Michigan consumer sentiment survey’s reading on five-year inflation expectations was positive for stocks, Krosby said. It eased to 3.1 from the preliminary 3.3% estimate in mid-June.

The benchmark S&P 500 last week confirmed a bear market.

The Dow Jones Industrial Average rose 823.32 points, or 2.68%, to 31,500.68, the S&P 500 gained 116.01 points, or 3.06%, to 3,911.74 and the Nasdaq Composite added 375.43 points, or 3.34%, to 11,607.62.

For the week, the S&P 500 rose 6.4%, the Dow added 5.4% and the Nasdaq gained 7.5%.

The pan-European STOXX 600 index rose 2.62% and MSCI’s gauge of stocks across the globe gained 2.63%.

Benchmark copper on the London Metal Exchange was 0.5% lower at $8,367 a tonne after touching $8,122.50, down 25% from a peak in March and the lowest level since February 2021. Other industrial metals also tumbled.

Oil prices were higher Friday on but notched their second weekly decline.

On the day, Brent crude settled up $3.07, or 2.8%, at $113.12 a barrel, while U.S. West Texas Intermediate crude settled up $3.35, or 3.2%, at $107.62.

In the Treasury market, yields have dropped from more than decade highs reached before last week’s Fed meeting. The U.S. central bank hiked rates by 75 basis points at the meeting.

Fed funds futures traders are now pricing for the benchmark rate to rise to about 3.5% by March, down from expectations last week that it would increase to around 4%.

Benchmark 10-year yields were last at 3.125%. They have fallen from 3.498% on June 14, the highest since April 2011.

In the foreign exchange market, the U.S. dollar fell and posted its first weekly decline this month.

In afternoon New York trading, the dollar index, which measures the U.S. unit against six major currencies, fell 0.2% to 104.013.

The U.S. dollar’s slide boosted even commodity-focused currencies such as the Australian dollar and Norwegian crown. The Aussie rose 0.8% to US$0.6946.

Spot gold added 0.2% to $1,826.39 an ounce

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Karen Brettell in New York and Carolyn Cohn in London; Editing by David Gregorio and Matthew Lewis)

By Divya Rajagopal

TORONTO – Rogers Communications Inc, Shaw Communications Inc and Canada’s competition bureau have agreed to start a mediation process to overcome the agency’s antitrust issues posed by Rogers’ C$20 billion ($15.5 billion) acquisition of Shaw, the competition tribunal said on Friday.

The move follows weeks of back and forth between the parties after the antitrust agency blocked Rogers’ bid, saying the deal will reduce competition in Canada’s concentrated telecoms industry and push up wireless bills.

While Rogers offered a concession last week by agreeing to sell Shaw’s Freedom Mobile to Quebecor Inc for C$2.85 billion, the competition bureau said the remedy measures must uphold competition in the wake of the merger.

The mediation could pave the way for a settlement, and avoid a protracted legal battle in the Competition Tribunal, which decides the fate of contested deals.

“It is a sign to us that competition commissioner is not ideologically opposed to the transaction so there is a path towards conditional approval,” said Aaron Glick, a director with New York-based Cowen LLC.

The Competition Tribunal told Reuters in a statement that “the parties have advised the tribunal that they wish to participate in the mediation set for July 4th and 5th,” adding that all information related to any mediation would be confidential.

Rogers’ proposed acquisition of Shaw comes as high mobile prices remain a hot-button issue in Canada, with customers paying the highest wireless bills in the world. The top three companies – Rogers, BCE Inc and Telus Corp – account for almost 90% of the industry’s revenue.

With the parties agreeing to the mediation process, the fate of the deal, which was launched in March 2021, could be a step closer.

Reuters reported on Thursday the bureau was expected to seek a divesture of Shaw’s cellular business known as Shaw Mobile to overcome antitrust concerns. In a filing last week, the bureau said that among other factors Shaw Mobile was a lead driver of growth for Shaw and it would have expanded if not for the buyout by Rogers.

The parties will argue their case before a tribunal judge during the mediation process, who would offer possible solutions to resolve the dispute. If the parties agree to the solutions proposed by the judge then they could sign a consent agreement that would pave way for clearing the deal, a lawyer familiar with the process told Reuters.

If they fail to agree, however, the matter will go to a trial which is expected to start in November. An outcome would be expected by year-end.

Shaw shares closed 1.5% higher at C$38.25 in Toronto on Friday. Rogers shares gained 1.4% to close at C$62.43.

($1 = 1.2921 Canadian dollars)

(Reporting by Divya Rajagopal in Toronto; Writing by Ismail Shakil; Editing by Leslie Adler and Matthew Lewis)

By David Shepardson and Dawn Chmielewski

NEW YORK – U.S. companies including Walt Disney Co and Facebook parent Meta Platforms Inc said on Friday they will cover employees’ expenses if they have to travel for abortion services after the U.S. Supreme Court overturned Roe v Wade.

The U.S. Supreme Court on Friday overturned the landmark 1973 ruling that recognized a woman’s constitutional right to an abortion, handing a victory to Republicans and religious conservatives who want to limit or ban and, in some states criminalize, the procedure.

Many states are expected to further restrict or ban abortions following the ruling, making it difficult for female employees to terminate pregnancies unless they travel to states where the procedure is allowed.

For example, in Oklahoma a bill due to take effect in August bans abortion except in medical emergencies and penalizes providers who violate the law with up to $100,000 in fines and 10 years in prison. States offering abortion protections include New York and Maryland.

Disney told employees on Friday that it remains committed to providing comprehensive access to quality healthcare, including for abortions, according to a Disney spokesperson.

The company’s benefits will cover the cost of employees who need to travel to another location to access care, including to obtain an abortion, it said.

Facebook owner Meta will reimburse travel expenses for employees seeking out-of-state reproductive care, but the company was also “assessing how best to do so given the legal complexities involved,” according to a spokesperson.

But Meta also moved to limit internal discussion of the ruling. Moderators on its forum Workplace removed posts mentioning abortion, citing a “respectful communications” policy barring employee discussions of political topics, according to a LinkedIn post by a Meta employee in Seattle.

Moderators also took down links to Facebook posts by outgoing Chief Operating Officer Sheryl Sandberg that condemned the ruling, the employee wrote.

The Meta spokesperson declined to comment on internal policy when asked about the reports of limiting internal discussion.

Policies supporting abortions varied among companies.

Dick’s Sporting Goods Chief Executive Lauren Hobart said on LinkedIn that the company would pay up to $4,000 in travel for employees or their family members and a support person if abortion was not available nearby.

Companies that offer reimbursements for abortion-related travel could be vulnerable to lawsuits by anti-abortion groups and Republican-led states, and even potential criminal penalties.

Lawyers and other experts said employers could face claims that their policies violate state laws banning, facilitating or aiding and abetting abortions.

Ride hailing company Lyft said it would legally shield drivers in abortion cases, saying it would expand a recent policy as new state laws were passed. “No driver should have to ask a rider where they are going and why,” a spokesperson said.

A draft of the Supreme Court ruling on abortion was leaked in May. At that time, many other companies, including online review site Yelp, Microsoft Corp, and Tesla, said they would help cover the cost of travel for employees seeking reproductive services. Apple repeated that it supported employees making their own decisions on reproductive health and that its healthcare covered travel for services unavailable nearby.

Yelp co-founder and Chief Executive Jeremy Stoppelman on Friday said the ruling “puts women’s health in jeopardy, denies them their human rights, and threatens to dismantle the progress we’ve made toward gender equality in the workplace since Roe.”

Alaska Air Group, parent of Alaska Airlines, said on Friday it is “reimbursing travel for certain medical procedures and treatments if they are not available where you live. Today’s Supreme Court decision does not change that.”

Other companies offering the benefit include Johnson & Johnson, online dating sites OkCupid and Bumble Inc, Netflix Inc and JPMorgan Chase & Co, the nation’s largest bank.

OkCupid sent in-app messages to customers in 26 states likely to ban abortions, gearing up for a political fight. “Act now by calling your representatives and demanding freedom and choice,” said a copy of the message tweeted by OkCupid Chief Marketing Officer Melissa Hobley.

(Reporting by Nivedita Balu and Tiyashi Datta in Bengaluru, Dawn Chmielewski in Los Angeles, Doyinsola Oladipo and Daniel Wiessner in New York and David Shepardson in Washingon; Writing by Anna Driver and Peter Henderson; Editing by Bill Berkrot and Rosalba O’Brien)

By David Shepardson and Rajesh Kumar Singh

(Reuters) -Spirit Airlines Inc on Friday urged its shareholders to back a merger deal with Frontier Group Holdings at a meeting next week after Frontier boosted its offer for the ultra-low-cost carrier.

Spirit is the subject of a bidding war between Frontier and JetBlue Airways Corp.

Both bidders view Spirit as an opportunity to expand their domestic footprints at a time when the U.S. airline industry is dogged by labor and aircraft shortages. Either of the deals would create the fifth-largest U.S. airline.

Under the revised terms, Frontier will bump up the cash component of the deal by $2 per share to $4.13 per share, along with 1.9126 Frontier shares in the cash-and-stock deal. Frontier will prepay $2.22 per share as a cash dividend to Spirit stockholders following approval of the transaction.

Denver-based Frontier has also increased its reverse termination fee to Spirit by $100 million to $350 million.

Spirit shareholders are due to vote on the merger deal with Frontier on June 30.

Florida-based Spirit has repeatedly rejected JetBlue’s offer, saying it has a low likelihood of winning approval from U.S. regulators.

Yet, JetBlue has not given up on its quest, and has been trying to persuade Spirit shareholders to vote against the deal with Frontier.

On Monday, New York-based JetBlue sweetened its offer for Spirit by $2 to $33.50 per share in cash. Frontier’s offer, at its closing price on Friday, is worth $24.29 in stock and cash.

“A JetBlue transaction faces significantly greater regulatory impediments than a Frontier transaction,” Spirit said.

In a statement late on Friday, JetBlue said it continued to believe its proposal was superior to Frontier’s, but said it will “more thoroughly” review and assess the revised terms of Frontier’s proposal.

Both the deals are expected to face intense regulatory scrutiny. But JetBlue’s Northeast Alliance partnership with American Airlines is a sticking point with Spirit.

The Justice Department has sued JetBlue and American to unwind the partnership. Spirit has asked JetBlue to drop the partnership if it wants a deal, but JetBlue declined.

Frontier stock closed up 6.6% on Friday at $10.54, while Spirit finished up 2.9% to $24.52. JetBlue shares gained 5.8% to close at $8.62.

(Reporting by David Shepardson in Washington, Rajesh Kumar Singh in Chicago and Akash Sriram in Bengaluru; additional reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Matthew Lewis and Leslie Adler)