AIR POLLUTION:

Texas-EPA permit feud gets loud and political

A long-simmering dispute between the Obama administration and Texas over the state's air-pollution permitting program is boiling over, just in time for the gubernatorial race.

Al Armendariz, the administrator of U.S. EPA's Region 6 office in Dallas, warned last month that Washington would take over Texas air permitting unless the state starts complying with the Clean Air Act. This came on the heels of EPA revoking a state permit for a Corpus Christi power plant and threatening 39 other permits (Greenwire, May 27).

"We have to get good air quality permits issued in Texas, and either the state of Texas does it, or I'll have to," Armendariz told The Houston Chronicle. "I'm hopeful that the state will correct the deficiencies and stay as the permitting authority in the state of Texas."

Armendariz's blast was answered by Gov. Rick Perry, a Republican running for re-election against former Houston Mayor Bill White (D). Decrying EPA's "Draconian policies and zealous actions," Perry said the federal government "flexed its muscles yet again and sent a very clear message that it will just not tolerate any divergence from its own policies -- period."

At the heart of the dispute is an air permitting program that Texas has run since 1995 without the EPA approval required by the federal Clean Air Act for letting states oversee pollution regulations. The Obama EPA has been warning Texas since last year that it needed to make changes in that program or face a federal takeover.

A major sore point: Texas' use of "flexible permits," which set umbrella emission caps at groups of facilities instead of smokestack-specific limits. EPA maintains the Clean Air Act prohibits those flexible permits, which it contends allows facilities to pollute the air at levels that would be unacceptable in any other state. But Texas officials insist their sitewide caps have helped slash emissions, dropping ozone levels 22 percent and nitrogen oxide emissions 46 percent since 2000.

"Under this program," Perry said, "Texas has been among the nation's leaders in cleaning the air."

Perry is backed by Texas officials and industry attorneys who say EPA is overreaching.

"Unfortunately, the federal government -- after failing to act on our rules for some 15 years -- has decided that instead of working with us, they would just tell us how to run our state-delegated program, or else," said Buddy Garcia, a Perry appointee to the Texas Commission on Environmental Quality, a sprawling agency with 2,980 employees, 16 regional offices, and a $539.1 million operating budget.

Texas runs the largest air permitting program in the country, according to TCEQ, with about 52,000 active New Source Review permits at 28,000 sites and about 1,600 operating permits at 1,400 sites. The air permitting program has a budget for the next two years of about $10 million, said a TCEQ spokeswoman.

Eric Groten, an industry attorney at Vinson Elkins in Austin, said the struggle is "entirely about form over substance." EPA, he said, is looking at one set of concerns but is "losing sight of the fact that, overall, Texas' programs are very restrictive."

On the other side are Democrats like Rep. Eddie Bernice Johnson, who while conceding that there had been improvements, asserted that the state's air is still filthy. "Texas," she said in a statement, "has one of the worst air quality and ozone problems in the country."

Added Neil Carman, air program director for the Sierra Club's Texas chapter, "We've been waiting for 15 years for the EPA to get Texas to clean up its act."

Perry-White race

Observers say the Perry-White gubernatorial race has fueled an escalation of the Texas-EPA dispute.

Groten said the race "tends to change the nature of the dialogue from one between well-intentioned federal and state bureaucrats" to one "that's in the megaphone of the newspapers and among elected officials dueling with each other."

Meanwhile, Perry has used the conflict to blast the Obama administration. "Their reaction is part of a continuing and troubling pattern in which Washington isn't happy unless they are in total control of everything, from health care to unemployment benefits to the education of our children," Perry said at the news conference Wednesday. "This administration seems to think that it's their way or the highway."

On the other side, Democrat White is looking to gain some political advantage in the conflict.

"Bill White, an oil and gas businessman, will bring back permitting authority to Texas where it belongs," said White campaign spokeswoman Katy Bacon in a statement in response to Perry.

The governor, she said, was trying "to cover up for his own incompetence."

"If Rick Perry really wanted to keep the federal government off our backs," Bacon added, "he would have done something besides hold a press conference."

A May University of Texas/Texas Tribune poll showed Perry leading White by 9 percentage points -- 44 percent to 35 percent. A Rasmussen poll conducted last month showed Perry with a 13-point lead, with 51 percent supporting Perry and 38 percent backing White.

That the confrontation is coming now explains the rhetoric but does not do justice to a long-running disagreement, said Ilan Levin, a senior attorney for the nonprofit Environmental Integrity Project.

"The political rhetoric has to do with the fact that it's an election year so this issue has become a political football," Levin said. "But this has been brewing for years. This is not something new and EPA's actions recently are no surprise."

'The last thing EPA wants to do'

Despite the political uproar, most expect EPA and Texas to settle their differences before the federal government seizes the program.

Bill Becker, executive director of the National Association of Clean Air Agencies, whose members are state and local regulators, said it is unusual for EPA to take over a state air program.

"Some states return programs or threaten to return programs because those programs are too difficult or too costly to implement," Becker said. "That is a rare occasion, but it has happened."

Becker said Idaho briefly handed over its air program to EPA voluntarily in the 1980s, in part because of concerns about high costs. However, he added, the switch ended up being even more expensive because EPA was forced to pay contractors more than state employees would have earned.

In such situations, EPA could likely use federal grant money slated for state permitting programs, Becker said, but would probably end up having to pay additional costs.

Industries with air permits also prefer dealing with the state, he said, partly because states have a better understanding of day-to-day implementation issues.

"I think the last thing that EPA wants to do is take over a state's permitting program," Becker said.

But he added, "There needs to be a credible threat by the federal government when a level of government is unable or unwilling to administer its program, and it sounds as though EPA is reaching that point."

Still, Texas officials say they are working on an expedited schedule to adopt new rules aimed at addressing EPA concerns, TCEQ Executive Director Mark Vickery said at Perry's press conference last week.

Despite the conflict, Vickery said, "I'm eager to get back to the drawing board and have constructive law- and science-based discussions with EPA -- these discussions that should have been finished 16 years ago."