A federal court has denied Texas' request to stop U.S. EPA from issuing greenhouse gas permits in the Lone Star State, where Gov. Rick Perry (R) and other state officials have refused to follow the Obama administration's orders on climate change.

The ruling today by the U.S. Circuit Court of Appeals for the District of Columbia will allow EPA to impose its rules in the state, clearing a legal obstacle for the regulations that kicked in on Jan. 2.

Critics of the Obama administration's climate program have filed dozens of lawsuits challenging EPA's rules, but the agency will now be able to proceed with its plans unless Congress takes action or the courts decide that they are in violation of the Clean Air Act. Taking charge in Texas would allow federal officials to write greenhouse gas permits for an estimated 167 projects this year, EPA said last month in a letter that gave state officials a final warning about the agency's plans.

In his briefs with the court, Texas Attorney General Greg Abbott (R) said EPA had no right to take over the state's program because it had not given Texas enough time to revise its own rules. He and other officials in the industry-heavy state are contending that the Clean Air Act does not allow EPA to control greenhouse gases, anyway.

The Obama administration claimed that the state had brought the situation upon itself by refusing to cooperate with federal rules -- an argument that was echoed today by environmentalists.

"The state government in Texas has now filed three cases in the federal courts to block EPA's greenhouse gas pollution reduction policies, and it has been rejected three times," said Steve Cochran, vice president of climate and air at the Environmental Defense Fund. "If Texas put half the effort into carrying out greenhouse gas pollution control measures that it put into fighting them, EPA would not need to be involved."

Today's narrow decision followed a broader ruling, issued last month, that allowed new regulations on cars, light trucks and stationary pollution sources to proceed. As part of the program, new and modified facilities that release more than a certain amount of greenhouse gases are required to get a permit certifying that they are using the best available technology to limit their emissions (E&ENews PM, Dec. 10, 2010).

The court agreed to temporarily block EPA's plan to issue permits in Texas so that it could consider briefs from both sides. But today, the court found that Texas had not met the legal threshold for a permanent stay, which would have required Texas to show that blocking EPA's intervention would be in the public interest.

Now, the state will need to decide whether to cooperate with the Obama administration. Rather than leave the program in federal hands, Texas could decide to implement the rules itself -- an option that has been grudgingly accepted in other states, such as Arizona.

But the Texas Commission on Environmental Quality said today that it has "neither the authority nor the intention of interpreting, ignoring, or amending its laws in order to compel the permitting of greenhouse gas emissions."

"The TCEQ is disappointed in this decision, but confident we will ultimately prevail in our insistence that the EPA must follow its own rules and federal law," spokesman Terry Clawson said in an e-mail. "Environmental regulations must have some environmental benefit, and not just expand the power of the federal government."

EPA is still hoping for a compromise, air chief Gina McCarthy said last month, though the TCEQ claims federal officials have not made any attempt to negotiate.

"We're just trying to fill the gap," McCarthy told reporters after unveiling the agency's plan to review permit applications in Texas. "The discussions are by no means done between us and the state of Texas."

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