EPA Knocks Out Facility Exemption from Texas SIP

The U.S. Environmental Protection Agency on March 31 disapproved the qualified facilities exemption rule that the Texas Commission on Environmental Quality (TCEQ) had submitted for inclusion in its federally approved State Implementation Plan.

The rule allows companies that have Texas issued air permits to avoid certain federal clean-air requirements including public review when they modify their plants.

“Today’s action improves transparency by requiring companies that modify their operations to notify the public and will assure that all air emitting sources are properly permitted under the Clean Air Act,” said Al Armendariz, regional administrator. “Improved public review will better inform our communities about the environmental conditions where they live.”

The Clean Air Act ensures that businesses across the country operate efficiently and cleanly. Under the Act, all states must develop plans for meeting federal requirements to protect public health, including an air permitting program. Since EPA approved Texas’ major clean-air permitting plan in 1992, the state has submitted more than 30 regulatory changes to the EPA-approved plan. Today’s action represents final agency decision on one of those regulatory changes.

In September 2009, EPA issued a Federal Register notice proposing to disapprove of the qualified facilities program and invited public comment. EPA has completed its careful review of comments and is now issuing its final decision.

EPA has been meeting with TCEQ, industry representatives, and environmental groups to discuss deficiencies with air emission permits issued by the state agency to industry in the state. These discussions have led to Texas proposing new rules used to issue permits.

EPA intends to work with the state and interested parties as air quality permits are transitioned in a gradual and structured manner to be consistent with state and federal law. EPA is committed to a close partnership with industry, environmental organizations, and community leaders as we work with the state to update the state-issued permits.

In July 2009, EPA and Business Coalition for Clean Air (BCCA) Appeal Group, Texas Association of Business, and Texas Oil and Gas Association reached an agreement regarding the timing of federal review of regulatory changes to Texas’ air permitting program. EPA is likely to issue final decisions on two additional changes ─ the Flexible Permits Program and New Source Review Reform regulations — before the end of the year.

TCEQ Responds

In a March 30 press release, TCEQ said it approved proposed rules to address EPA's concerns about the qualified facilities program, which deals with facilities that request authorizations that fall below federal new source review (FNSR) permit limits.

The state agency said it had submitted these qualified facility program rules to EPA 14 years ago, on March 13, 1996 and EPA did not formally respond until Sept. 23, 2009, when the federal agency proposed disapproval of the rules. "The TCEQ has done everything possible and continues to do everything possible to work with the EPA on this program," said TCEQ Chair Bryan W. Shaw, Ph.D. "It should be noted that this existing program, which is an actual law passed by the Texas Legislature, has been in place while the TCEQ has made tremendous progress in improving Texas air quality.” In response to the September 2009 notice, TCEQ prepared a rule proposal to address the deficiencies identified by EPA. The state submitted an accelerated rulemaking schedule to address the qualified facilities program. That schedule also addressed other rulemakings, including public participation, in anticipation of being able to work with EPA so final action would result in conditional approval or other appropriate final action.

The proposed rulemaking explicitly identifies the qualified facilities program as a Minor New Source Review Program, meaning that only proposed changes below emissions thresholds are eligible to participate. There is no circumvention of FSNR permitting requirements. The proposal also addresses EPA’s concern with the program on attainment of the National Ambient Air Quality Standards.

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