Jun 7 - McClatchy-Tribune Regional News - R.G. Ratcliffe Houston Chronicle



The Texas air quality war -- a conflict pitting environmental health against money -- now is fully engaged because of a rare crosscurrent of political timing.

The companies that produce gasoline for our cars, electricity for our lights, gas for our stoves and noxious fumes as a byproduct have held sway over Texas regulators for almost two decades.

Now, environmentalists appear to have the upper hand:

--The Obama administration named as regional Environmental Protection Agency administrator a longtime critic of the Texas Commission on Environmental Quality, TCEQ. That administrator, Al Armendariz, is threatening to take over aspects of Texas air quality permitting at the end of this month.

 --Democrats nominated environmentally oriented former Houston Mayor Bill White to challenge industry-friendly Republican Gov. Rick Perry in November.

--The TCEQ faces a sunset review by the Legislature next year, scrutiny that has potential to overhaul the agency or to receive lawmakers' approval for business as usual.

"This has been brewing for about 15 years," said Tom "Smitty" Smith, state director of Public Citizen. "But what's happening now is you've finally have an EPA administrator who's got enough guts to stand up to the polluters."

Perry is presenting the battle as another attempt by the federal government to tell Texas what to do.

"Texas' common-sense approach to air quality permitting works because it avoids the damage caused by Washington's command and control approach, while cleaning the air, helping create jobs and growing our state economy," Perry said at a Deer Park news conference last week.

Environmentalists are excited by the EPA's new aggressive posture and hope it prompts an overhaul of the TCEQ and Texas environmental regulation in the sunset process.

Fear of a backlash

Former TCEQ Commissioner Larry Soward, who is helping environmentalists prepare for the fight, fears the opposite is about to occur.

"I'm almost concerned that there's going to be a legislative backlash and the Legislature is going to join the governor and the agency and say, 'Hell, no!'" Soward said.

He may be right.

State Sen. Glenn Hegar, R-Katy, chairman of the Sunset Commission, said he wants the process to be about agency operations and efficiency, not about state environmental regulations. Hegar said he is deeply concerned that the EPA is attempting to "federalize" a state program.

"The sunset process cannot resolve this very disturbing position we've been put in," Hegar said. "I'm very suspicious. What's the real agenda?"

Flexible permits targeted

While the fight could escalate to all aspects of state environmental regulation by the TCEQ, the initial contest is over the state's policy of issuing so-called flexible air quality permits.

There are fewer than 140 such permits, but they cover some of the largest petrochemical refineries and power plants in the state.

The permits cap noxious emissions for an entire site rather than individual units within that site. Environmentalists argue that permits for individual units would force operators to upgrade equipment. State officials say the permits brought plants built before the 1990 federal Clean Air Act into the state regulatory system by giving operators flexibility to manage their overall emissions.

The Texas Clean Air Act creating the permitting system was passed under Gov. Ann Richards in 1993, and the state began using the law to issue permits in 1995. Perry and TCEQ officials say the EPA never formally objected to the state's process.

However, more than once, EPA officials wrote the state complaining about the process. In 2007, EPA Bush administration regional administrator Richard Greene sent a letter to all the flexible permit holders notifying them they may be out of compliance with federal clean air laws.

In response, a consortium of Houston-area refiners, the Texas Oil and Gas Association and the Texas Association of Business sued the EPA, demanding it follow federal law and issue a ruling on 30 state permitting rules.

Business won, and the court set a schedule that EPA now is following for ruling on the programs.

'Eco-warrior' at meeting

Last June, members of the Texas environmental community met in Dallas with new EPA Administrator Lisa Jackson, whom Rolling Stone magazine described as an "eco-warrior" and the most activist agency administrator in history.

The environmentalists told Jackson the state's system of regulation favored polluters and how on more than one occasion TCEQ regulators had left the agency to work for the companies they had regulated. While air quality had improved in Texas over the past decade, they said it was due to EPA enforcement actions and lawsuits, not state regulation, recalled Neil Carman, clean air director for the Sierra Club of Texas.

Jackson, as a result, named Armendariz the new regional administrator.

Armendariz was an engineering professor at SMU with a history of challenging the TCEQ over air pollution from gas wells in North Texas. As one of his top aides, Armendariz chose Layla Mansuri, a former EPA lawyer pushing the agency to be more aggressive in enforcing environmental laws.

Suddenly, an activist administrator was in place with the industry-demanded schedule to rule on the legality of Texas' permitting process. Armendariz took it a step further last month by declaring the air quality permit for the Flint Hills refinery in Corpus Christi invalid and indicating he may do the same for other permit holders after a June 30 deadline.

Matthew Tejada, executive director of Air Alliance Houston, said the industry in its lawsuit may have outsmarted itself.

"They were trying to get in on the back end of the Bush EPA," Tejada said. "It was a grand miscalculation on their part."

Soward, a former Perry aide, said the fundamental problem of the TCEQ is that state law set it up to favor industry. He said he often had to vote for permits he did not like because state law does not allow the agency to change a permit up for renewal without the operator's agreement.

"We have a culture at the agency and in the state that economic interests are more protected ... than the environment," Soward said.

Texas as battleground

Because the state has about 60 percent of the nation's refining capacity, Soward said he believes the Obama administration is going to make an example out of Texas to bring other states in line on clean air issues.

TCEQ Chairman Bryan Shaw said the fight already is having economic impact on Texas.

Shaw said Motiva and Total refineries in Port Arthur, a Southwestern Public Service Co. power plant in Amarillo and a Conoco Phillips refinery in Borger all have state permits to expand, but cannot do so as long as their permits are in question. He said that threatens 7,160 jobs at two plants and halts the installation of modern pollution control equipment at two others.

Armendariz's staff earlier this year sent TCEQ a presentation arguing there is an environmental cost to not replacing the program.

The debate already has become a core part of the governor's race.

White said Perry has mismanaged the agency on behalf of polluting industries that have contributed to his political funds and now wants to turn his own failings into part of his campaign against Washington.

"Perry has politicized the commission," White said. "The governor has played chicken with the EPA to create a new chapter in his book on states rights."

r.g.ratcliffe@chron.com

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