Legal & Regulatory

EPA to Hand Over GHG Permitting Authority to Texas

The Environmental Protection Agency (EPA) last week proposed to approve revisions to a Texas state plan to regulate greenhouse gas (GHG) emissions in the state. If finalized, likely later this year, the EPA will rescind its Federal Implementation Plan (FIP) that is currently in place and grant the state GHG permitting authority. 

According to the EPA, the approved changes to the Texas Prevention of Significant Deterioration (PSD) Program provide for the regulation of GHG emissions and clarify the applicability of Best Available Control Technology (BACT) for PSD permit applications. They essentially provide Texas with the express authority to regulate GHG emissions, issue PSD permits governing GHG emissions, establish emission thresholds for determining which new stationary sources and modifications to existing stationary sources become subject to Texas’ PSD permitting requirements, and revise several minor New Source Review (NSR) provisions to specify that minor NSR permit mechanisms cannot be used for authorizing GHG emissions.

Texas, which had previously refused to implement any form of GHG permitting, had fielded strong concerns from industry about the administrative burden posed to applicants, which are forced to pursue two separate permit applications—one from the EPA for GHG permits, and one from the Texas Commission on Environmental Quality (TCEQ) for non-GHG permits. To resolve this, the state’s legislature in June 2013 passed a law specifically recognizing GHGs as an air pollutant and required TCEQ to adopt new regulations for GHGs and incorporate them into its state implementation plan.

In related news last week, TCEQ said it was “pleased” that it had been able to reach an agreement with the EPA and garner the agency’s conditional approval of the Texas flexible permit program, saying “that the EPA now understands why the program is legal and effective.” That program, initially proposed in 1994, allows an operator more flexibility in managing their operations by staying under an overall emissions cap for one or more facilities at one site.

The EPA in June 2010 disapproved the program for minor new sources after determining that it allowed major new sources to avoid certain federal clean air requirements. Texas challenged the decision in federal court, saying, “120 flexible permit holders in Texas were wrongly mandated to ‘de-flex’ under threat of federal and civil sanctions, and not a single environmental benefit was gained.”

The U.S. Court of Appeals for the Fifth Circuit in August 2012vacated the EPA’s disapproval  of the Texas Flexible Permit Program. The court ruled that the agency overstepped its authority when it disapproved the program in July 2010 and that reasons the agency offered for rejecting the program were “arbitrary and capricious.”

Last week, TCEQ said that although the state agency and industry representative successfully challenged the EPA’s 2010 disapproval of the program, the EPA’s proposed approval would provide a “resolution to implement both the court’s opinion and the necessary legal requirements for EPA approval.” Final approval could come later in 2014.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)


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