First casualty of greenhouse gas rules may be Texas plant

Developers targeted 2013 to begin operating a new power plant fueled by the carbon-rich leftover from nearby oil refining in Corpus Christi.

The Las Brisas Energy Center will not be ready by then, however, and there are doubts the project will be built at all, making it the latest flash point in a long fight between Texas and the Environmental Protection Agency.

The $3 billion project has stalled as the federal government pushes to limit emissions of carbon dioxide and other gases linked to global warming from new power plants. The first-ever rules are expected to bring an end to the era of coal-burning power generation as energy producers opt for cheap and plentiful natural gas.

The EPA’s draft rules require new coal-fired plants to achieve limits that can be met easily by plants fueled by natural gas, which releases about half the carbon dioxide. The rules, known as the New Source Performance Standards, do not cover existing facilities.

The Las Brisas project could be among the first casualties because the plant, as designed, would burn petroleum coke, also known as pet coke, a refinery byproduct that produces about as much carbon dioxide as coal.

The rules, which the EPA proposed in March, act as a “moratorium on coal and pet coke plants,” said Dave Freysinger, chief executive of Chase Power Development, the Las Brisas project’s developer. “Given the issues with reliability of electricity in Texas, this is an untenable spot to be.”

In the meantime, the Houston-based firm has asked a federal appeals court to block the rules, even before the EPA finalizes them. The company also has joined Texas officials in an attempt to prevent the EPA from issuing construction permits for major sources of greenhouse gases.

Last month, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the legal underpinnings of the EPA’s efforts to limit the emissions and allowed the agency to move forward with the rules for coal- and petroleum coke-fired power plants.

Texas maintains the EPA does not have the legal authority to regulate greenhouse gas emissions under the Clean Air Act and may appeal to the Supreme Court. The Las Brisas developers, meanwhile, claim the project is fully permitted, if not for the “novel” regulations.

“Las Brisas is trying to thread a needle,” said Ilan Levin, an Austin-based environmental attorney who has challenged the project in state court. “If they can, there is a path forward without any major design changes to the plant.”

Tons of carbon dioxide

Las Brisas, as planned, would be constructed along Corpus Christi’s inner harbor and burn enough petroleum coke from nearby oil refineries to produce electricity for 850,000 homes.

The power plant would release about 13 million metric tons of carbon dioxide each year, according to the permit application developers filed with the EPA. The amount would rank it fourth among industrial sources of greenhouse gases in Texas, which leads all states in heat-trapping emissions.

Conventional coal plants cannot meet the proposed standards because the pollution control technology is not ready, according to the American Coalition for Clean Coal Electricity.

Freysigner, the Chase Power chief executive, said Las Brisas would reduce heat-trapping emissions because the petroleum coke will stay in Corpus Christi rather than be transported to dirtier plants overseas. Environmental groups, however, said the planned facility still would emit too much pollution.

“The people who want to build Las Brisas are clearly not very concerned about the impacts of burning pet coke anywhere,” said Flavia de la Fuente, an organizer with Sierra Club’s Beyond Coal campaign. “The truth is, the Las Brisas plant will emit carbon pollution, as well as mercury, soot and smog pollution, all which will impact a city that has seen more than its fair share of industrial pollution.”

The EPA will have the final word on the permit by November.

Even then, the Las Brisas developers claim that the project should not need the permit. The EPA has identified 15 proposed coal plants, including the White Stallion Energy Center in Matagorda County, that would be exempt from the limits as long as construction begins by next April.

Las Brisas is not one of them.

The problem is, the Texas Commission on Environmental Quality issued the air pollution permit for the project three weeks after the EPA began regulating heat-trapping emissions. While the federal agency makes the rules, states implement most of the requirements of the Clean Air Act.

Permit authority seized

Texas has refused to issue permits that cover greenhouse gases, prompting the EPA to seize authority for them. That means developers of large industrial projects in Texas now must apply for air permits from both regulators, adding time to the process.

The EPA has received 30 requests for greenhouse gas permits from Texas, so far, and granted two.

The legal challenges face long odds, so the Las Brisas developers’ best hope may come from the EPA. Chase Power asked the EPA last month to exclude petroleum coke-fired plants from the regulations, and U.S. Rep. Pete Olson, R-Sugar Land, said the agency should grant the request because of the state’s need for more electricity.

“They are banking on weaker rules” when the EPA finalizes them later this year, Levin said. “They will need some relief for the plant to be built.”

matthew.tresaugue@chron.com