EPA seizing control of air pollution permit for Corpus Christi refinery

By RANDY LEE LOFTIS / The Dallas Morning News
May. 27, 2010

The EPA, saying Texas' system of regulating industrial air pollution violates federal law, stripped the state of jurisdiction over one of its biggest permits Tuesday.

The Environmental Protection Agency's takeover of a key permit governing Flint Hills Resources' East Corpus Christi refinery marks a widening gulf between federal regulators and the Texas Commission on Environmental Quality.

The EPA, for now, has stopped short of seizing control of the state's entire air-pollution permitting system. But the agency's top regional official said he is preparing to take over more Texas permits and is insisting the state make basic changes.

"The EPA is serious about requiring that air-quality permits held by companies in Texas are federally sufficient," EPA regional administrator Al Armendariz said in a telephone interview. "If the state agency is unwilling or unable to issue those permits, the EPA must and will do so."

Armendariz was in Louisiana monitoring the environmental response to the BP oil spill.

The TCEQ has insisted that its permit system is legal and effective. In a letter to the EPA dated Monday, TCEQ Executive Director Mark Vickery said the state understood that legal deadlines might force the EPA to take over some Texas permits while the agencies try to resolve "significant differences in opinion."

"A collaborative effort will continue to be beneficial to both agencies' limited resources and to continued protection of the environment and public health," Vickery wrote.

Flint Hills Resources spokeswoman Katie Stavinoha in Houston said the company was evaluating the EPA's letter. Flint Hills is owned by Koch Industries, based in Wichita, Kan.

The company's Corpus Christi complex, which includes two refineries, can process 288,486 barrels of crude oil a day. It ranks as the fifth-largest refinery in Texas and the 11th-largest nationwide, according to the U.S. Energy Information Administration.

Armendariz said the EPA's choice of Flint Hills Resources to begin its permit takeover did not reflect a particular problem with that facility. Rather, he said, the agency believed objections to its state permit were on especially strong legal grounds.

The TCEQ issued a draft operating permit for the Flint Hills Resources refinery last October. The EPA formally objected to the state permit in December, saying it omitted required information about emissions and environmental requirements.

Without that information, the agency said, neither the public nor regulators could adequately monitor the refinery's pollution.

Missed deadline

The state had 90 days to correct the problems but did not do so, Armendariz said. With that deadline long past, he said, the EPA had to step in.

Now the company must apply directly to the EPA for a new permit that the agency itself will issue, bypassing the state, Armendariz said.

The EPA-issued permit will include the detailed information that the state permit left out, he said.

That process also will occur at other facilities with disputed permits, Armendariz said. In the past six months, the EPA has filed formal objections to major Texas permits at 40 facilities, an apparently unprecedented number in any state.

Most of the facilities are oil, gas or related chemical plants on the Texas coast. Two, however, are in North Texas: city-owned Garland Power & Light's Ray Olinger power plant in Collin County and Koral Industries' bathtub factory in Ellis County.

Neil Carman, clean-air program director with the Sierra Club's Texas chapter, said the EPA action was important for people in communities facing industrial pollution, starting with East Corpus Christi, which has several large refineries.

"We've been very concerned about the folks in that area," Carman said. "I think [EPA officials] are really sending a message to the TCEQ that this baloney has got to stop."

Luke Bellsnyder, executive director of the Texas Association of Manufacturers, said the EPA should "ease off the pedal a little bit" and work out a deal with the state as soon as possible.

"Give us some predictability," he said.

Differences continue

Talks over more than a year have failed to resolve the differences between the EPA and the state over the complex system of state permits that limit industrial air pollution.

Big facilities must obtain operating permits under Title V of the federal Clean Air Act. In nearly all cases, states issue the permits on the EPA's behalf through cooperative agreements.

The EPA remains responsible for reviewing state-issued permits and the states' permit systems for compliance with the Clean Air Act.

Armendariz said Texas permits have taken improper shortcuts, omitted key information and made it difficult to tell if facilities have skirted mandatory reviews.

The TCEQ says its system cuts red tape without violating the law or sacrificing public health. In his letter Monday, commission chief Vickery recounted what he said were ongoing efforts to find common ground.

He added, however, that "as a matter of principle, the TCEQ strongly disagrees that there has been a wholesale circumvention" of key federal requirements.