Texas’ Unlikely GHG Story

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Texas recently found itself in a very unlikely regulatory position. Historically the Lone Star State is typically positioned on the side of light environmental regulation. In a convoluted story of unintended consequences, Texas’ original stance against subjecting and regulating greenhouse gasses (GHGs) under the Prevention of Significant Deterioration (PSD) and Title V Program, resulted in the adoption of the toughest GHG regulation in the country.  

Our story begins in 2010, when the EPA imposed a Federal Implementation Plan (FIP) on the state of Texas – meaning the Agency would issue PSD permits to major sources of (GHGs within the state. As a result, major sources of GHGs in Texas were required to file an application with the EPA to obtain PSD authorization to construct or modify a major source of GHGs. If the source is also a major emission of non-GHGs, an application must also be filed with the Texas Commission on Environmental Quality (TCEQ) for a PSD permit authorizing the emissions of non-GHGs, thus creating a dual permitting process. Although major sources of GHGs must also apply for Title V permits, previous to March 2014, the TCEQ rules did not recognize GHGs as an “air pollutant” under the Title V program.  

In order to streamline the application process and address Title V applicability issues, the Texas Legislature passed HB 788 in 2013. HB 788 required TCEQ to take over the permitting of GHG emissions from EPA through changes to the Texas Clean Air Act (Texas Health and Safety Code (THSC), Chapter 382). Changes to THSC directed the TCEQ to submit the newly adopted rules to EPA for approval into the Texas State Implementation Plan (SIP). Approval of the SIP by the EPA would trigger a lifting of the FIP and give the TCEQ GHG air permitting authority, thereby adhering to the legislative mandate of HB 788.    

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When the draft SIP was published for public comment on November 8, 2013, it did include a proposed exclusion for CO2 emissions from biogenic sources. The biogenic emissions exclusion was pulled from the draft SIP in a response to comments made by various organizations. Sources also claim EPA indicated it would not approve an SIP with the biogenic exclusion since the U.S. Court of Appeals for the District of Columbia vacated EPA’s three-year deferral rule of GHG permitting for biogenic emissions. Remember that Texas’ rules were adopted in order to regain the ability to issue PSD and Title V permits. The fact that the rules adopted in order to do so were onerous and the harshest in the country, was a byproduct of the steps taken in order to come out from under the FIP.  

On March 26, 2014, TCEQ approved these GHG permitting rules as part of the SIP, which established GHG permitting thresholds (including those for biogenic emissions) that mirror the thresholds in EPA’s permitting program.   

SCOTUS Ruling Impact

The June 23, 2014 ruling by the Supreme Court in Utility Air Regulatory Group v. EPA, however, will impact Texas’ newly minted rules on the inclusion of biogenic emissions in GHG permitting. More information on this case and the vacation of the three-year deferral rule can be found in NACWA’s Advocacy Alert. The extent of the ruling is still somewhat unclear, but while the rest of the country braces for the ramifications of the ruling, Texans let out a collective sigh of relief when the decision came down.  The SCOTUS ruling will bring the TCEQ back to the rulemaking table to revise the GHG permitting rules adopted on April 14, 2014 because of an obscure THSC statute, 382.05102, which states that “…the commission will repeal the GHGs permitting rules if emissions of GHGs are no longer to be authorized under federal law”. The TCEQ is expected to double back and rewrite rules. We do not know if they will wait do so until after the FIP is lifted and the SIP is in place, or before this, which would require the agency to resubmit the SIP for approval before the FIP is lifted. 

Not by GHG Emissions Alone…

The major takeaway from the ruling is that GHG emissions alone cannot bring you into PSD and Title V permitting programs. 

  • If you have a new wastewater treatment plant (WWTP) or modification that is major under either Title V or PSD for something other than GHGs, you should submit your application to EPA and Texas concurrently.  I expect that neither EPA nor the state will act on it until Texas revises its rules, so you should discuss your application with TCEQ and request enforcement discretion to allow you to proceed with construction until this shakes out. 
  • If you have a new WWTP or modification that is major only for GHGs, you do not need to submit an application to EPA.  You should discuss your situation with TCEQ and request enforcement discretion to allow you to proceed with construction until TCEQ revises its rules.   

Stay Tuned

The Texas Association of Clean Water Agencies (TACWA) and the Water Environment Association of Texas (WEAT) will continue to monitor the TCEQ’s rulemaking, and will work with NACWA as biogenic emissions regulation evolves at the national level. We will also soon sit down with TCEQ folks from both the air and water divisions to discuss the agency’s timeline and where we go from here. After the dust settles and the TCEQ’s next round of rulemaking begins, we look forward to being actively engaged and providing comments. Stay tuned, for more tall Texas tales in the world of GHG permitting.

 

Julie Nahrgang is the Executive Director of the Water Environment Association of Texas and Texas Association of Clean Water Agencies. Julie has worked and volunteered with WEAT and TACWA since 2008.

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