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EPA, Texas Fight Over Air Pollution

Federal agency says state’s ‘flexible’ permit program 
violates the clean air act

by Glenn Hess
August 23, 2010 | A version of this story appeared in Volume 88, Issue 34

Credit: Shutterstock
Texas officials say their flexible permitting program cuts red tape and air emissions without violating federal law.
Credit: Shutterstock
Texas officials say their flexible permitting program cuts red tape and air emissions without violating federal law.

Federal officials and environmental regulators in Texas are engaged in a public and increasingly bitter politicized fracas that has evolved from a dispute about the state’s air pollution permitting rules into a pitched battle over states’ rights.

The conflict reached the tipping point last month when the U.S. Environmental Protection Agency shot down the Lone Star State’s 16-year-old program for regulating air emissions in the nation’s oil, gas, and chemical manufacturing heartland.

At issue is the Texas Commission on Environmental Quality’s (TCEQ) controversial system of issuing “flexible” air pollution permits, which allow a general emissions cap for an entire facility rather than setting specific emissions limits for each processing unit inside a plant. Under the flexible approach, one portion of a chemical plant or refinery may emit more pollutants than federal standards allow as long as overall emissions at the facility do not violate federal air quality standards.

About 1,500 Texas facilities are classified as major air pollution sources under the Clean Air Act, including the dozens of refineries and petrochemical plants that line the Houston Ship Channel. The law requires these facilities to have federal operating permits but gives states authority to craft their own permitting systems.

The flexible permit program, created under former Democratic Gov. Ann Richards, was submitted to EPA for review in 1994. TCEQ has been issuing permits under the program ever since, even though it never received federal approval. During the Administrations of Bill Clinton and George W. Bush, EPA repeatedly missed deadlines for making a decision on the Texas permitting program.

During the Bush years, EPA sent flexible permit holders a notice reminding them of their obligation to comply with federal requirements. But as soon as the Obama Administration came into power, EPA began sending a more forceful message, warning Texas that its approach does not comply with the Clean Air Act. Federal regulations require state-issued permits to set limits on pollutant emissions from each specific source of an industrial facility.

The issue heated up in June after EPA took control of two state-issued air permits: one for Chevron Phillips Chemical’s Cedar Bayou petrochemical plant in Baytown, about 30 miles east of Houston, and one for a facility operated by Garland Power & Light, a utility in North Texas. The companies have until Sept. 30 to reapply for the permits directly with the federal agency.

Then on July 15, EPA took decisive action and published its formal “disapproval” of the state’s air quality permit rules, invalidating operating permits for 122 facilities owned by companies such as ExxonMobil, Shell, Valero Energy, and BP. The federal agency said it determined that the Texas program “does not meet several national Clean Air Act requirements that help to assure the protection of health and the environment.”

The decision by EPA “improves our ability to provide the citizens of Texas with the same healthy-air protections that are provided for citizens in all other states under the Clean Air Act,” says Alfredo Armendariz, head of the agency’s regional office in Dallas.

EPA has not ordered any of the facilities with flexible permits to shut down their operations. But Armendariz says they will all be required to set individual pollution limits and obtain new operating permits for each production unit. Some plants may also have to invest millions of dollars in upgrades in order to meet federal air quality standards.

Credit: EPA
Credit: EPA

Although not unexpected, EPA’s action is “nonetheless disappointing,” says Hector L. Rivero, president of the Texas Chemical Council, an industry trade group. “This action will result in onerous and costly regulations for employers without any measurable improvement to the state’s air quality.”

Chemical manufacturers want EPA to collaborate in good faith with TCEQ to resolve their regulatory differences. “Employers need fair and predictable regulations in order to remain competitive in the global economy,” Rivero says. The 500,000 Texans whose livelihoods “depend on the chemical industry in this state are counting on these issues being resolved in a constructive and expeditious manner.”

EPA has reached out to industry, the environmental community, and TCEQ to discuss how to convert flexible permits into more detailed permits that comply with the Clean Air Act. The agency is offering an option that would allow these permit holders to ensure compliance through voluntary third-party audits. In exchange for making any pollution-control upgrades deemed necessary during the audit, companies would get a pledge from EPA not to pursue any enforcement actions for past violations.

Credit: Courtesy of Gov. Perry’s Office
Credit: Courtesy of Gov. Perry’s Office

But Texas Gov. Rick Perry (R) and state environmental officials seem ready and willing to wage war with Washington. They charge that federal regulators are overstepping their authority and ignoring the fact that air quality in Texas improved vastly over the past decade, even as the population grew.

“We are defending our flexible air permitting program because it works,” says TCEQ Chairman Bryan W. Shaw. “EPA’s philosophy of more bureaucracy by federalizing state permits will not lead to cleaner air, but will drive up energy costs and kill job creation at a time when people can least afford it.”

On July 26, the Texas Office of the Attorney General took legal action on behalf of TCEQ and asked the 5th U.S. Circuit Court of Appeals in New Orleans to overturn EPA’s rejection of the state’s air permitting program. In its petition, Texas contends that its program “improves air quality while helping regulators and regulated entities operate more efficiently.”

Since 2000, airborne ozone levels in the state have decreased 22%, while nitrogen oxide emissions from industrial sources such as chemical plants, refineries, and electric utility plants have been cut by 53%, beating national averages, according to TCEQ.

The Texas program has long been criticized as ineffective by public health groups and environmental activists. They contend that flexible permits mask dangerous pollution spikes in certain areas of a facility and may be allowing industry to endanger the public by emitting higher-than-allowed levels of chemicals that cause cancer, asthma, and other health problems.

“Big oil and chemical companies have been allowed for decades by TCEQ to release clouds of deadly air pollution, including toxic substances like benzene and 1,3-butadiene, both carcinogens,” says Neil Carman, clean air director for the Sierra Club’s Lone Star Chapter and a former TCEQ air investigator.

Critics also note that Texas still ranks last nationwide in many air quality categories, and in some industrialized parts of the state, TCEQ air programs have not achieved compliance even with outdated federal air quality standards.

“Texans deserve the same clean air protection as citizens of every other state, and TCEQ’s flexible permitting program has been denying all of us that right for nearly 20 years,” says Luke Metzger, director of Environment Texas, an advocacy group in Austin. “The Clean Air Act is the same law that polluters in all other 49 states have to follow, and it’s time that polluters in Texas follow it, too.”

Regulating air pollution has been a point of conflict between Texas and Washington since President Barack Obama took office. The dispute has also become a political issue in the heated race for governor. Perry, who has been in office since 2000 and is seeking a third term this fall, maintains that EPA’s action is part of a concerted effort by the Administration to transfer power from the states to the federal government.

In running for reelection, Perry has been delivering a relentless anti-Washington message. His book championing states’ rights, “Fed Up,” is scheduled to go on sale before the November elections. “This legal action is the next step in our ongoing commitment to fight back against the Obama Administration’s ever-widening effort to undermine our air quality initiatives and force a heavy-handed federal agenda on the people of Texas,” Perry says in a statement.

The Democratic candidate for governor, former Houston mayor Bill White, says EPA’s takeover of air permitting in Texas is evidence of Perry’s mismanagement of TCEQ—the governor appoints the state agency’s members—along with Perry’s habit of spending more time bashing Washington than working for Texas.

“Instead of solving a problem that he was alerted to by the Bush Administration, Perry created a confrontation with the EPA in order to write a new chapter in his book about the federal government,” White says in a statement. “His failure is bad for Texas businesses. I guarantee that as governor, I’ll bring permitting authority back to Texas where it belongs.”

The conflict between two of the world’s largest environmental agencies is “totally fixable,” says Larry Soward, a Perry appointee who headed TCEQ from 2003 to 2009. “There is a chance to resolve the differences between TCEQ and EPA, but it will take genuine cooperation. Everyone needs to leave their politics and rhetoric at the door and work together to protect Texans’ health,” he remarks. “The last thing EPA wants to do is take over issuing air permits in Texas, but it has been forced to that point over the years.”


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