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Note: This story was first published by Inside Climate News, a national nonprofit that provides reporting and analysis on climate change, energy and the environment. A fuller version of this story can be found here.
When the Intercontinental Terminals Company sought a permit to expand its tank farm and terminal on the Houston Ship Channel in 2014, a reviewer with Texas’ environmental regulator expressed a long list of concerns.
ITC, the reviewer for the Texas Commission on Environmental Quality wrote, appeared to be evading core provisions of federal environmental law by dividing its “major” facility among nominally separate “minor” permits, which have less stringent pollution standards requirements and require far less review.
In Greater Houston, federal authorities had set a threshold at 25 tons per year of volatile organic compound emissions. Any company wanting to release more was required to undergo a tedious, expensive application process, established in the Clean Air Act, as a so-called “major source.”
ITC had already obtained permits for its first group of chemical tanks in 2012 for 24.9 tons per year of volatile organic compound emissions in 2014. Now it was asking to permit a second group for another 24.9 tons per year. Because both groups fell conveniently just under the EPA’s threshold, neither were subject to a federal program called New Source Review, or NSR.
“We have concerns about NSR circumvention,” wrote the permit reviewer, Jesse Lovegren, in a July 2014 email to other agency staff.
Nevertheless, ITC got its permit the next year. And in 2017 it got another for an even larger expansion, bringing its authorized emissions of volatile organic compounds up to 147 tons per year — almost six times Houston’s current major source threshold.
Yet the facility never underwent the process required by federal law for major sources, which is aimed at preventing current air pollution hazards in places like Greater Houston from getting worse.
It wasn’t an isolated error, according to attorneys and regulatory experts in Texas and beyond, but an example of a systemic problem with emissions permitting in the Lone Star State, seat of the nation’s largest oil, gas and petrochemical sectors. By exploiting the legal distinction between major and minor pollution sources, lawyers have argued repeatedly in court papers, companies can dodge pillars of the country’s landmark environmental laws.
“This is sort of a foundational problem with Texas permitting, and it’s leading to a lot of harm,” said Gabriel Clark-Leach, a former staff attorney for the Environmental Integrity Project, a nonprofit law firm based in Austin. “It’s so important for sources to be considered minor because it makes the whole permitting process less expensive and it makes operation of the plant less expensive.”
ITC did not respond to requests for comment.
Inside Climate News compiled 10 recent cases involving allegations the TCEQ characterized major pollution sources as minor. An investigation by ICN and the Texas Tribune, based on hundreds of pages of government and court records and dozens of interviews, revealed numerous ways in which large companies sidestep major source permitting:
They may, like ITC, characterize different parts of their facilities as independent minor sources; they may dramatically underestimate the amount of pollution they say they will emit; they may classify their emissions in unregulated categories; or they may use retroactive amendments to change the conditions of original permits after facilities are built.
Systemic abuse
Clark-Leach, 47, said he saw companies use these tactics during each of his 13 years with EIP, but legal challenges were rarely successful. He and other public interest attorneys have alleged in legal filings that the TCEQ often acts to facilitate the maneuvers.
They also named another, unexpected agency as complicit in lax permitting: the Environmental Protection Agency.
While regulators in many other states also neglect to stop companies from evading major permits, said Ryan Maher, an attorney who has studied the problem for two years on a grant from the Funder Collaborative on Oil and Gas, what sets Texas apart is the EPA’s unwillingness to intervene, especially in application and enforcement of nonattainment limits.
“Texas is given a total pass,” said Maher, who works for the Center for Biological Diversity in Maine. “Texas oil and gas is getting a huge handout relative to the rest of the country.”
In September, Clark-Leach filed a petition with the EPA denouncing TCEQ’s handling of ITC, then left the Environmental Integrity Project, frustrated and discouraged. Now Clark-Leach, tall with a short, graying beard, is writing a play while he contemplates his future.
“It’s been really tough trying to attack the TCEQ’s abuses. That’s one of the reasons why I threw my hands up and left. I didn’t see any way forward on this issue, which is a major issue,” he said.
The TCEQ, headed by three appointees of Texas Gov. Greg Abbott, grants thousands of pollution permits each year, including hundreds for major sources. The 10 cases analyzed in this investigation constitute a tiny fraction of those permits. In most of them, nonprofit watchdogs or federal regulators alleged improper use of minor source permits to authorize major sources; in others, companies utilized legal loopholes to avoid more stringent pollution controls.
In one case, the EPA rejected Texas’ proposed permit for a seawater desalination plant at the Port of Corpus Christi, saying the TCEQ had mischaracterized it as a minor source; TCEQ issued the permit anyway.
In another, a Gulf Coast gas liquefaction plant received a minor source permit to annually emit 6 tons of nitrogen oxides, then released more than 120 tons during its first year of operation.
In another, an 80-year-old West Dallas shingles plant faced community outrage and EPA objections over its major source permit renewal, so it voided its application and applied as a minor source, which doesn’t require public input or federal oversight.
In another, a gas booster station and emergency gas flaring operation in West Texas with a minor source permit to release 0.01 tons per year of sulfur dioxide emitted more than 250 tons per year, the major source threshold, in “excess” emissions, each year from 2017 to 2020.
EPA Region 6 spokesperson Jennah Durant, responding to criticism about the agency’s failure to hold TCEQ accountable, said Texas holds “authority to implement most environmental programs and regulations in the state” while EPA retains “oversight authority.”
“EPA welcomes any specific input or correspondence regarding the execution of these roles,” Durant said.
ICN shared its findings with the TCEQ, but the agency declined to comment on any of the specific examples.
TCEQ spokesperson Richard Richter wrote in an email that the process of evaluating pollution permit applications “consists of a highly complex review,” including “in-depth analyses of many factors including, but not limited to, Best Available Control Technology, emission rate calculations, off-property impacts analysis, major new source review applicability, and review of applicable state and federal rules.”
The process typically involves requests for more information or design changes from the TCEQ and a lengthy back-and-forth with the applicant, Richter said. “After this detailed process is complete, TCEQ issues authorizations that are in compliance with all rules and regulations.”
Richter said specific questions from ICN “are either better suited for EPA or will require a Public Information Request.”
“TCEQ doesn’t have any additional comments regarding your report,” he said.
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