Texas’ battle with EPA moves to Capitol Hill

Environmental Protection Agency Administrator Lisa Jackson today defended the Obama administration’s decision to take over greenhouse gas permitting in Texas, saying the move gives oil refineries and power plants more certainty.

The EPA seized control of greenhouse gas permitting in Texas earlier this year after state leaders refused to implement new nationwide rules governing the emissions of carbon dioxide and other heat-trapping gases from oil refineries and power plants.

Although other states have joined Texas in challenging the regulations, only the Lone Star State has flatly refused to comply with them in the meantime by issuing greenhouse gas permits for new or expanding refineries and power plants.

“EPA stepped in because if we didn’t, Texas businesses would not be able to build or expand,” Jackson said during a House Energy and Commerce subcommittee hearing on new agency rules on the heat-trapping gases. “We would much prefer that Texas issue the greenhouse gas permits themselves, but if Texas refuses to do it, then EPA is stepping in to do so because the businesses in Texas still need permits under the Clean Air Act.”

“Right now, businesses in Texas cannot get a permit, like a business in Louisiana just did for greenhouse gas emissions,” Jackson added. “These are reasonable steps and Texas has refused to implement them.”

Rep. Gene Green, D-Texas, said he also was concerned that if the EPA hadn’t taken over, plants in his Houston ship channel district would be unable to get the required permits and expand their facilities.

“I have plants that are always in the process of trying to expand,” Green said. “They’re not going to build a facility in east Harris County if they’re worried they’re not going to have that permit available. They would build it somewhere else and ship those chemicals back to us.”

“I don’t want to put my plants at a disadvantage because of a battle between the EPA and the state,” Green added.

The EPA separately last year invalidated air quality permits issued by the Texas Commission on Environmental Quality, saying the state’s 15-year-old flexible permit program did not meet federal standards and violated Clean Air Act requirements. The permits in question require refineries, chemical plants and other facilities to meet an overall emissions cap but allows them to choose how to do so. Federal rules, however, require plants to limit emissions of certain pollutants from each source within a facility.

The single overall cap, the EPA argues, makes the Texas permits nearly unenforceable and allows plants to emit more than similar facilities in other states. But state officials say the system cuts red tape and pollution without violating federal law.

Rep. Michael Burgess, R-Texas, said today the EPA was unfairly targeting Texas, because other states have similar flexible systems to grant permits as long as overall emissions from a plant do not violate federal air standards — even if certain portions of a facility are heavier polluters.

“Similar rules exist in other states that have not been challenged by the EPA,” Burgess said. “This appears to be Texas-specific, and if it is, it is wrong.”

Rep. Pete Olson, R-Texas, said EPA’s decision to invalidate the Texas-issued permits represented “a fundamental change” in the balance of power between the federal government and the states when it comes to air quality regulation. The states issue air pollution permits on behalf of the EPA, but the EPA decides whether the permits are in compliance with federal law.

Olson noted that the Texas permitting program was established nearly two decades ago.

“The feds’ takeover of state’s authority . . . is a radical departure from existing law, and under the Constitution, that’s not your job,” Olson told Jackson.

Jackson shot back that EPA officials under the Bush administration were the first to determine that the Texas flexibile permitting program did not satisfy Clean Air Act requirements. “It was the Bush administration — the Bush EPA — that found under the Clean Air Act the Texas flexible permitting program was not legal,” Jackson said. “So when I became administrator, I found a situation where businesses in Texas have no certainty that the permits they have protect them from lawsuits for emitting excess pollution.”

“The answer certainly could not have been to look the other way as these businesses got permits that weren’t worth the paper they were printed on,” Jackson added.

Jeff Holmstead, an attorney with Bracewell and Giuliani who was air administrator at the EPA from 2001 to 2005, said Jackson has it wrong. The Bush administration never determined that Texas’ flexible permitting program was illegal, Holmstead said. Instead, Holmstead said, a career official at the EPA Office of Enforcement and Compliance Assurance sent a threatening letter challenging aspects of the permits.

“This is very different from EPA finding that the Flex program was illegal,” Holmstead said. “The first action taken by EPA was a proposal, issued by the Obama administration, to find the program illegal. They took comment on this issue and then issued a final rule disapproving the flex permit program.  This all took place under Lisa Jackson.”

Industry groups in Texas sued the EPA in 2008 in an effort to force the Bush administration to make a final decision on the flexible permits, saying they needed more regulatory certainty. They won the case, but the decision fell to the Obama administration’s EPA.

Attorney General Greg Abbott accused the EPA of “creating its own rules and trying to overturn Texas’ regulatory system, that has been in place through the Clinton administraiton, through the Bush administration and has been working effectively.”

“We believe in the state of Texas we can achieve positive job growth while at the same time achieving better health quality and air quality,” Abbott said. “We think the EPA is doing nothing more than trying to interfere with the rule of law and the state of Texas’ ability to increase jobs.”

Abbott said Jackson was “creating a false choice” by saying the EPA had to step in or the permits issued by Texas would have been invalid.

“Texas could have and should have been allowed to continue to issue the permits under the programs that have been in place going back to both the Ann Richards and Clinton administrations,” Abbott said. “Had EPA either not stripped those permits from Texas, or had they given Texas the allotted time period, Texas would have been able to continue to issue the permits.”