In a long-running battle with Texas regulators, the Environmental Protection Agency (EPA) Wednesday disapproved the flexible permit program that the Texas Commission on Environmental Quality (TCEQ) had submitted for inclusion in its clean air implementation plan. It is not clear whether the move could affect the operations of gas producers in the state’s prolific Barnett Shale, which underlies Dallas/Fort Worth, or if the EPA decision is a harbinger of regulations that could affect producers.

EPA said the TCEQ program does not meet several federal Clean Air Act (CAA) requirements. The TCEQ maintains that the flexible permit program complies with the CAA and that it made changes to the program to address EPA concerns but they were not considered by the federal agency.

Texas Gov. Rick Perry said the state will continue to fight the EPA over what he considers to be a successful state program. The permit program’s disapproval is expected to force more than 120 Texas refineries and petrochemical plants to seek new permits at a cost of millions of dollars.

EPA said the Texas program allows companies to avoid certain federal clean air requirements by lumping emissions from multiple units under a single “cap” rather than setting specific emission limits for individual pollution sources at their plants. “Today’s action improves our ability to provide the citizens of Texas with the same healthy air protections that are provided for citizens in all other states under the Clean Air Act,” said Al Armendariz, EPA regional administrator.

TCEQ has been collecting data on emissions sources from gas producers in the Barnett Shale area. The data collection is in the form of an inventory of equipment that could emit nitrogen oxides and volatile organic compounds. A gas producers’ representative told NGI he thought the data collection might be at the behest of the EPA, but TCEQ spokesman Terry Clawson said this was not the case (see Daily GPI, May 3). Asked whether the disapproval of the TCEQ flexible permit program would have implications for Barnett Shale producers, Clawson referred the question to EPA, which did not immediately respond to a request for comment.

Under the CAA, all states must develop implementation plans for meeting federal requirements. Those plans must include an air permitting program to set pollution levels for industrial facilities. In 1992 EPA approved Texas’ plan, but since 1994 the state has submitted more than 30 regulatory changes to the air pollution permitting part of the plan, EPA said.

The action represents a final decision to disallow one of the most important changes made by Texas for failing to meet the protective measures of the CAA, EPA said.

Clawson said the program, was in compliance with the CAA. “The flexible permitting program has contributed to improved air quality in Texas, and if the state is prevented from using the program, air quality could actually suffer,” Clawson told NGI. “On June 16 the TCEQ approved proposed rule changes to the Flexible Permitting Program to satisfy the EPA’s concerns. The EPA has not acted on these newly proposed rules changes, and as far as we know, did not take them into consideration…

“And while final denial of our current flex permit program was expected, it continues to be a frustration to learn of EPA actions through the media.”

EPA said it contacted representatives from Texas industry, the environmental community and TCEQ to discuss how to convert flexible permits into more detailed permits that comply with the CAA. One tool proposed by EPA is encouraging flexible permit holders to participate in a voluntary compliance audit program. The program would expedite efforts to identify emission limits, operating requirements and monitoring, reporting and record keeping data. Public comment on the proposed audit program closes on Friday (July 2).

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