EPA official says agency working with Texas companies on truce over touchy permitting issues

Official: EPA, Texas working on permit solution

HOUSTON — The Environmental Protection Agency will soon help Texas petrochemical companies comply with the Clean Air Act after it rejected the state’s industrial permitting program, the agency’s regional director said Tuesday.

The federal audit program, however, is only a first step toward resolving the environmental dispute that gained steam in June when the EPA determined Texas’ so-called flexible permits violated federal law. That move put in operational limbo more than 120 petrochemical plants, including some of the nation’s largest refineries.

“We’re making progress,” EPA regional director Al Armendariz told The Associated Press. “But we aren’t there yet and we still have some substantive issues to resolve between the two agencies.”

Armendariz said the EPA would make public the details of the audit program in the “coming days.”

The program will allow companies to work directly with the federal agency to learn what fixes they need to make to meet Clean Air Act requirements while guaranteeing them forgiveness for any past pollution violations.

Despite months of talks, letters Armendariz recently sent to the Texas Commission on Environmental Quality underscore that significant obstacles remain.

Industry leaders have received an invitation from the EPA to attend a meeting on Thursday with federal and state officials, said Pam Giblin, an environmental attorney for Baker Botts, a firm that represents dozens of petrochemical companies.

As the dispute gained steam earlier this year, it escalated from an argument over environmental issues into a pitched battle over state’s rights. Texas Gov. Rick Perry, running for a third term against Democratic nominee Bill White, has used the dispute with the EPA as an example of how the federal government and the Obama administration are overreaching and meddling in Texas affairs.

“It’s made for TV,” said Robert Stein, a political scientist at Rice University.

At the crux of the dispute are Texas’ flexible permits, which set a general limit on how much air pollutants an entire facility can release. The federal Clean Air Act requires state-issued permits to set limits on each of the dozens of individual production units inside a plant.

The EPA says Texas’ system masks pollution and makes it impossible to regulate emissions or protect public health. Texas had been issuing the permits since 1994, even though it never received the required federal approval.

The TCEQ has challenged the EPA’s ruling in court. On Tuesday, Chairman Bryan Shaw insisted the permits were legal and that Texas could win its court battle. Still, he acknowledged the state agency was trying to reach agreement with the EPA.

“We’re making progress in bits and spurts,” Shaw said, adding that he is concerned the EPA’s demands for revamping the program could force some industries to shut down completely, though he could not give any specific examples.

The sides have been discussing several possibilities, Shaw said, but declined to elaborate on what they are.

But a letter Armendariz wrote to Shaw on Aug. 30 detailed the remaining problems. In the letter, Armendariz referred to an Aug. 2 note that cited “major concerns” with Texas’ proposals.

“I must be frank that the demonstration required for a new flexible permitting program to get approval will not be easy if the new program has common elements of … the prior program that we just disapproved,” Armendariz wrote.

Asked about this letter and Shaw’s insistence that the flexible permit program does not violate the Clean Air Act, Armendariz said any company that chose to hang onto its flexible permit would be risking enforcement action by the EPA.

“I think they understand I’m serious,” Armendariz said. “Only the most ill-advised companies will elect to hold onto their permits.”

Texas industry — under the banner of the Business Coalition for Clean Air and represented by Baker Botts — pressed the issue with a lawsuit in 2008 that demanded the EPA rule on several items that had been in limbo for years.

Industry wants “predictability,” Gilbin said.

“Just tell us … yay or nay,” Gilbin said. “We’re all very anxious to see what EPA is proposing.”