EPA Proposes Approval of TCEQ's Greenhouse Gas Permitting Program

by Jackson Walker

On February 5, 2014, several news outlets reported that the U.S. Environmental Protection Agency ("EPA") handed over permitting authority for greenhouse gases ("GHGs") to the Texas Commission on Environmental Quality ("TCEQ").  While the February 5th announcement is an important milestone, a few important steps need to be completed before the State of Texas will take over the permitting program it has long resisted and still believes violates the Federal Clean Air Act.
On January 2, 2011, the EPA took over GHG permitting in Texas, arguing that it had "no choice but to resume its role as the permitting authority."  After three years of EPA control over GHG permitting in Texas, many in the regulated community still agree with the State of Texas legal opposition, but agree with the Texas Legislature's decision in 2013 to take a pragmatic approach and instruct TCEQ to take over GHG permitting as soon as possible because of significant permit backlogs that have accumulated at the Region 6 Office in Dallas.  However, EPA cannot legally hand over the permitting program just yet, as TCEQ's own GHG permitting rules are not yet final.  Those that are subject to the GHG air permitting requirements are hopeful that the review of all air permits under a single agency will help provide much needed regulatory certainty regarding the permitting process and the time needed to complete agency review, as well as reduce permitting costs.
The document that EPA Region 6 Administrator, Ron Curry signed on February 4, 2014, is a Federal Register notice that proposes to approve TCEQ's rules into the State Implementation Plan ("SIP") and, at the same time, lifts the Federal Implementation Plan ("FIP").  The proposed approval will be published in the Federal Register and EPA will receive comment on that proposal.  EPA can propose to approve TCEQ's rules at this stage only because it has been conducting a concurrent SIP review while TCEQ's rules work their way through the administrative and public participation process at the state level.
EPA's proposal to approve TCEQ's proposed rules is a strong sign that the EPA will eventually grant final approval of TCEQ's rules but is by no means the final step to handing over the permitting program to TCEQ.  EPA's proposed approval of the TCEQ's rules strongly suggests that TCEQ will make few, if any, changes to its proposed GHG rules.  If TCEQ were to make significant changes, EPA could withdraw its approval and keep the FIP in place, leaving the regulated community subject to a dual permit process.
EPA's proposed approval also suggests that once TCEQ's rules are finalized, EPA will work quickly to issue a final SIP approval and remove the FIP.  If all goes according to the current schedule, the TCEQ's rules will be finalized early this summer, with EPA's SIP approval soon to follow.  EPA's final approval will trigger a 30-day period, after which the approval becomes effective and TCEQ can take over GHG permitting.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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