The U.S. Environmental Protection Agency (EPA) today announced final disapproval of the flexible permit program that the Texas Commission on Environmental Quality (TCEQ) had submitted for inclusion in its clean-air implementation plan, saying that the program “does not meet several national Clean Air Act requirements.” The move is the latest in an escalating dispute between the federal agency and the state over air pollution rules.

“The EPA is disapproving the permit program after determining that it allows companies to avoid certain federal clean air requirements by lumping emissions from multiple units under a single ‘cap’ rather than setting specific emission limits for individual pollution sources at their plants,” a statement from the agency’s Region 6 office said.

Under the Clean Air Act, all states must develop State Implementation Plans for meeting federal requirements to protect public health, including an air permitting program to set pollution levels for industrial facilities. In 1992, the EPA approved Texas’ State Implementation Plan, but since 1994 the state has submitted more than 30 regulatory changes to the air pollution permitting part of the plan.

The action disallows “one of the most important changes made by Texas for failing to meet the protective measures of the Clean Air Act,” the EPA said.

To ensure no disruptions for facilities, the EPA said it has reached out to industry, the environmental community, and the TCEQ to discuss how to convert flexible permits into more detailed permits that comply with the Clean Air Act. Measures include encouraging flexible permit holders to participate in a voluntary compliance audit program. The program will expedite efforts to identify emission limits, operating requirements, and monitoring, reporting, and recordkeeping data, it said.

The agency’s action follows notices issued last September that proposed to throw out three aspects of the Texas clean air permitting program, including the TCEQ’s revised flexible permits program. The other two include revisions to a program relating to the modification of existing qualified facilities and to the Texas major and minor NSR state implementation plan.

Today’s disapproval came on the last day allowed for the agency to issue its final decision on the proposed flexible permits rule. The EPA is ultimately required to complete action on all 30 of the state’s proposed regulatory changes by Dec. 31, 2013.

Disapproving the Existing Program Without Delay

The TCEQ approved proposed revisions to the state’s flexible permit rules on June 16 to address alleged deficiencies charged by the EPA. According to the state agency, the proposed rules would more directly reference potentially applicable federal permitting requirements. They would also add provisions to ensure that the flexible permit rules cannot be used to circumvent federal permitting requirements and add more detailed monitoring, recordkeeping, and reporting requirements associated with flexible permits. In addition, they would implement other changes the EPA has identified as necessary to obtain approval for the flexible permit rules as a State Implementation Plan revision.

The public comment period on that rules package opens on July 2, 2010, and runs through August 2, 2010. The state must then finalize its proposal and submit it to the EPA for review. Then, the EPA is expected to examine the new rules as submitted. The federal agency said, however, that it “believes that public health and federal law require disapproval of the existing program without further delay.”

Texas’ flexible permit program was established in 1994 to incentivize grandfathered operations to voluntarily enter into the air permitting program while allowing companies operational flexibility to meet ever-changing market demands. “The Flexible Permit Program was innovative in that it allowed operational flexibility in exchange for emission reductions, with the final goal being a well-controlled facility,” the TCEQ said on June 16.

The state agency also claimed that because of the flexible permit program, there are no grandfathered facilities in Texas. “There are many such facilities across the rest of the country that are still grandfathered from both state and federal permitting requirements,” it claimed.

“We are defending our flexible air permitting program because it works,” said TCEQ Chair Bryan W. Shaw. “EPA is not able to demonstrate how our program is less protective of the environment than the bureaucratic federal approach. 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.”

An Escalating Conflict: Texas v. EPA

Earlier this month, meanwhile, the EPA’s attempts to wrest two air quality permits from the TCEQ escalated into a heated confrontation with Texas officials over enforcement of federal standards. The EPA’s Dallas regional office, which has identified 39 Texas facilities with “serious flaws,” moved in May to prevent the state agency from issuing a permit to a Corpus Christi refinery. It later took over permits for a Garland Power & Light plant in Collin County and the Chevron Phillips Cedar Bayou petrochemical plant in Baytown.

Texas Attorney General Greg Abbott filed a legal challenge against the EPA, while Texas Gov. Rick Perry sent a letter urging President Barack Obama to stop the agency’s excessive overreach into Texas’ permitting process.

Perry said in a statement that Texas air quality had improved significantly since 2000 as a result of its Clean Air programs. “As Texas led much of the nation in job, population and economic growth, the Texas clean air program achieved a 22 % reduction in ozone and a 46% decrease in NOx emissions, compared to an 8% reduction in national ozone levels and a 27% reduction in national NOx levels between 2000 and 2008,” he said. “Additionally, no county in Texas is in nonattainment for fine particulate matter, one of the pollutants with the greatest impact on human health.”

Sources: POWERnews, EPA, TCEQ, Gov. Rick Perry