Businesses Choose Reality Over Politics in Backing New Emissions Law

As Texas Republican leaders continue their drumbeat against what they say is federal overreach by the Obama administration, the Environmental Protection Agency remains a primary target.

Attorney General Greg Abbott, a candidate for governor, has trumpeted the state's multiple lawsuits targeting the agency, and other candidates for statewide office are also pledging to protect Texas from what they see as encroachment by the EPA.

But a new law that comfortably passed the state Legislature this year reflects a different reality — that Texas businesses have to live with climate change regulation, regardless of the politics. House Bill 788 orders the state to regulate emissions of greenhouse gases. It had the support of many of the companies that need permits related to greenhouse gas emissions from the Texas Commission on Environmental Quality to expand or construct facilities.

Before HB 788, the state agency said it did not have the legal authority to issue such permits, leaving dozens of energy companies in limbo waiting for the EPA to issue the necessary permits instead.

“I’ve lost $90 million worth of revenue in a year waiting for this that I will never recoup,” Michael A. Heim, president of Targa Resources, an energy services company, said in March, testifying in favor of the measure. Heim had waited more than a year for two permits for facilities that would require investments of more than $500 million.

“So we’re basically sitting here ready to spend the money, create the jobs, but we don’t have a permit to even start turning dirt,” he said.

A few months after Heim's testimony, the EPA issued one of the permits, for a new natural gas processing plant in Wise County. The agency is still working on applications for more than 50 other facilities in Texas.

There was minimal debate on the three-page bill, which was supported in testimony by a group of strange bedfellows — including representatives for Koch Industries, the Texas Conservative Coalition and the Sierra Club. The irony was not lost on the bill’s author, Rep. Wayne Smith, R-Baytown. 

“This is not a statement about climate change,” Smith told fellow lawmakers in March. “This is about efficiency for business. So I’m not making any statement that has anything to do with greenhouse gases and climate change.”

Smith's district is home to many petrochemical companies who pushed for the bill. He did not respond to requests for comment for this article.

Sen. Juan "Chuy" Hinojosa, D-McAllen, who sponsored the bill, said the state should have agreed to the regulations years ago.

“Quite frankly, it hurts businesses,” Hinojosa said of Texas’ lawsuits and adversarial relationship with the EPA. “It doesn’t help them. And this is a good example of that.”

Last month, a federal judge dismissed one such suit, in which Texas had sued the EPA for taking over greenhouse gas permits after the state refused to do so itself in 2010. The judge said the suit had no standing because the EPA was simply trying to help businesses get the needed permits.

“That’s the irony of ironies here,” said Jim Marston, director of the Environmental Defense Fund’s Texas office. “EPA stepped in, actually to make it easier for industry.”

“Industry will say, explicitly, ‘We need certainty more than anything else,’" Marston said. “And what Attorney General Abbott has given them is uncertainty.”

Industry representatives were not willing to go that far.

“We have always been in favor of the State of Texas issuing these permits, because we just anticipated delays in projects” if the EPA had to issue them, said Celina Romero, a lawyer for the Texas Pipeline Association.

But asked if the association’s members were frustrated that the state would not cooperate earlier, she declined to comment.

Abbott and the state environmental agency say the EPA gave states an unfairly short time for developing the new permit rules.

The accelerated timeline “gives room for argument” that the state was wronged, said David Spence, a professor of business and law at the University of Texas at Austin. Still, he said, the requirements did not come out of nowhere. The Bush EPA believed it did not have the authority to regulate greenhouse gases, he noted. It was the Supreme Court that indicated it should do so in 2007.

Nonetheless, of all the states, “only Texas said, ‘We’re never going to regulate greenhouse gases,’” Spence said. “I guess everyone can draw their own conclusions over whether that’s a prudent interpretation of the law, or just political posturing.”