Emission Rules in Flux for Texas Companies

July 14, 2011 12:57 pm by: KUT Staff

More than a hundred Texas refineries, chemical and utility plants have told the Environmental Protection Agency they plan to apply for federal air permits. Last year the federal government declared the state’s flexible air program violated the Clean Air Act. A lawsuit is pending against the EPA’s ruling, but companies are moving forward with getting permits through the federal government anyway.

The EPA’s regional director over Texas, Al Armendariz, says that all 136 companies that had previously received flexible air quality permits have either started or agreed to begin the process of getting a new permit through the EPA or with Texas’s Commission on Environmental Quality.

The state’s defunct flexible permit allowed companies to meet the overall pollution cap instead of meeting individual emission caps at specific parts of the plant.

“We haven’t found, at all, with any of these companies, that getting away from their flexible air permits has had any impact on jobs or their ability to expand,” said Armendariz.

Armendariz used the Motiva refinery in Port Arthur as an example. The plant continued its expansion plans and is set to hire 300 new full time employees next year, all while working to meet the EPA requirements.

However, those circumstances could help boost the Texas economy. Michael Webber, an energy policy analyst at the University of Texas at Austin, says past environmental regulations show that there are costs benefits.

“If you talk to economists, they’ll say you grow the economy by polluting and then you grow the economy by cleaning it up,” Webber said. “You have to pay someone to pollute and then you have to pay someone to clean it up. That’s two jobs.”

And compliance may not be as expensive as projected. A 2003 federal study by the US Office of Management and Budget showed acid rain regulations compliance costs were actually lower than expected.

But, of course, not everyone is on board with the changes. The Texas Oil and Gas Association has a lawsuit pending, challenging the EPA’s elimination of the flex-permit program. The association’s Debbie Hasting says the federal permit could be a job killer.

“Certainly, it’s going to be hard for any business to operate under those circumstances,” Hasting said.

Governor Rick Perry and the state’s Republican leadership have echoed those criticisms. Perry has gone out of his way to label the situation as an example of intrusive federal overreach.

“I think we’ll wait and see what happens,” Katherine Cesinger, a spokesperson for the governor, told KUT News. “But the issue here is, what is the impact of this thus far? And what we’ve seen so far is that the EPA has sited absolutely zero environmental benefit, and the only thing that is being impacted at this point is a burden on employers, and that’s basically making them pay to do this new process that again has no change.”

But David Spence, a professor for energy law at UT’s McCombs School of Business, says the companies’ willingness to apply for new permits could be an indicator that they can live with the costs of regulation. He points out that the current lack of regulation is also associated with economic costs.

“[Costs that] economists would call ‘externalities,’” Spence said. “You know, external costs that would get shifted to society: deaths from pollutions, asthma attacks, mining accidents. All those sorts of things.”

Spence says it has been an uncertain business climate for energy companies in the long history of the EPA versus air pollution regulations. But in the last ten years, the courts have sent messages that regulations are on the way.

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