On November 10, 2014, the federal Environmental Protection Agency (EPA) published two actions in the Federal Register that gave the Texas Commission on Environmental Quality (TCEQ) sole authority over greenhouse-gas permitting in Texas:
- The Approval and Promulgation of Air Quality Implementation Plans; Texas; Prevention of Significant Deterioration (PSD); Greenhouse Gas (GHG) Tailoring Rule Revisions is the approval of the State Implementation Plan (SIP) revisions which are consistent with the Supreme Court’s decision in Utility Air Regulatory Group v. Environmental Protection Agency; and
- The Approval and Promulgation of the Air Quality Implementation Plans; Withdrawal of Federal Implementation Plan; Texas; Prevention of Significant Deterioration; Greenhouse Gas Tailoring Rule Revisions is the rescission of the Federal Implementation Plan (FIP).
Previously, permitting for emissions in Texas had followed a two-step system in which the TCEQ issued PSD permits for traditional pollutants, and the EPA issued PSD permits for greenhouse-gas emissions. Industry groups had found the two-step emission application process to be inefficient, time-consuming, and costly with the major complaint involving the slow response to GHG applications by the EPA. The State of Texas undertook to remedy the problem on two fronts – (1) challenging the EPA’s GHG permitting program in the court system and (2) working to become the GHG permitting authority in Texas. As TCEQ Chairman Bryan Shaw explained, “While the State of Texas continues to disagree with the EPA program to regulate greenhouse-gas emissions, the TCEQ has a system in place to ensure timely permitting that provides stability and predictability to our State’s regulatory framework.” In June 2013, Section 382.0621 of the Texas Health and Safety Code was amended to regulate GHGs and specifically authorized TCEQ to “adopt rules to implement this section, including rules specifying the procedures to transition to review by the commission any applications pending with the United States Environmental Protection Agency for approval under 40 C.F.R. Section 52.2305.” In October 2013, the TCEQ released draft rules to set up a state permitting system based on federal requirements, which appear in the Texas Administrative Code, Chapters 39, 55, 101, 106, 116, and 122. As a result of these efforts, the TCEQ has now become the sole permitting authority for GHGs in Texas.
Industry groups in Texas have been following these regulatory developments closely and will likely be pleased with the outcome. However, a question of immediate concern is how this change will affect GHG applications already pending before the EPA. TCEQ and EPA have reportedly been coordinating efforts with respect to the transfer of GHG permitting authority, and both agencies are expected to work together to ensure a smooth transition process for all pending applications. To assist with the process, TCEQ has indicated that it will likely perform the Best Available Control Technology (BACT) reviews for EPA for some of the permits now pending before the EPA. However, it is noteworthy that in recent months some, including TCEQ, have advised industry applicants to submit GHG permit applications to both TCEQ and EPA to expedite issuance. In the meantime, the EPA has now made available a website showing the status of PSD GHG Permit Applications Transitioning to TCEQ, which can be found at http://yosemite.epa.gov/r6/Apermit.nsf/AirP#A.