Fifth Circuit rejects prior permit necessarily determines BACT
- Eric L. Hiser
- 10 hours ago
- 4 min read
On August 12, 2025, the Fifth Circuit, after receiving back the Texas Supreme Court’s response to its certified question in Port Arthur Community Action Network v. Texas Commission on Environmental Quality (PACAN), issued its final decision. Reversing its earlier position, the Fifth Circuit held the Texas Supreme Court’s reasoning “foreclose PACAN’s use of the Rio Grande LNG facility’s approved-but-not-yet operational BACT emission levels as a comparator for the Port Arthur LNG’s draft permit.” After rejecting PACAN’s efforts to distinguish the Texas Supreme Court decision, the Fifth Circuit denied PACAN’s petition to review, effectively affirming the TCEQ permit.
BACKGROUND
The fundamental issue in PACAN is whether TCEQ’s issuance of a permit to a substantially similar LNG compressor operation (Rio Grande LNG) that had not yet been built at the time of PACAN’s challenge to the Port Arthur LNG facility permit determined BACT for the Port Arthur facility. The Executive Director issued the permit with a less stringent BACT. PACAN appealed and argued the Rio Grande LNG precedent controlled. The administrative law judge recommended modification to the Port Arthur permit. TCEQ’s Executive Director filed an objection, arguing that because Rio Grande LNG was not built, the limit established in that permit was not “demonstrated in practice” and hence could not be BACT. EPA Region 6 wrote a memorandum for entry in the administrative hearing disagreeing with the Executive Director, stating that a permit “should” be considered to demonstrate BACT. The TCEQ Commission affirmed the Executive Director’s position. PACAN appealed to the Fifth Circuit. The Fifth Circuit initially reversed the TCEQ decision but then withdrew that opinion and certified a question on how Texas applies BACT to the Texas Supreme Court. The Texas Supreme Court ruled that BACT is determined as the best available control technology based on practical experience and research on a presently available technology and that a prior permit decision is neither necessary nor sufficient in itself to establish BACT.
ANALYSIS
After reviewing the federal Clean Air Act requirements applicable to the matter and the positions of the parties (outlined above in Background), the Fifth Circuit first resolved that PACAN had jurisdiction to challenge the TCEQ permit issued to Port Arthur LNG, holding that PACAN’s members’ “reasonable concerns about the negative effect of pollution on their personal interest” to be sufficient to establish standing. It rejected Port Arthur LNG’s argument that the standing declaration had to identify the specific pollutants causing harm.
On the merits, the Fifth Circuit held that the Texas Supreme Court’s decision that “the pollution control method has already been demonstrated to be operational in the real world” and that “theoretical proof of a method’s operability in the future is not enough” undermined PACAN’s theory that the unbuilt Rio Grande LNG permit was determinative of BACT. The Fifth Circuit also noted the Texas Supreme Court’s caution that “the existence of a previous permit issued to [one facility] does not necessarily have any bearing on the standards [another facility] must meet to satisfy the BACT requirement” because permits reflect “at least BACT” and can reflect something that is beyond the BACT definition. The Fifth Circuit held that “both of these principles foreclose PACAN’s use of the Rio Grande LNG facility’s approved-but-not-yet-operational BACT emissions levels as a comparator for Port Arthur LNG’s draft permit.” Slip op at 10.
PACAN responded by arguing that “the record reveals ample evidence that emissions limits” at the Rio Grande LNG levels “are achievable” and that the Texas BACT, as defined by the Texas Supreme Court, was less stringent, and thus preempted, by federal BACT. The Fifth Circuit rejected both contentions, holding that “vendor guarantees” and prior permits are not “operational evidence that available technology … ‘has already proven, through experience and research’ to be operational, obtainable, and capable of reducing emissions.” Slip op at 10. On the second issue, the Fifth Circuit held that Texas BACT, which applies to both minor and major sources, can be different than federal BACT and that Texas has committed to meeting federal BACT for major sources, reasoning that “requiring a facility to meet both federal and Texas BACT requirements does not thwart or undercut the federal requirement” and that “PACAN does not identify any ‘difference in stringency’ that would create a preemptive effect.” The Fifth Circuit thus denied PACAN’s petition for review.
COMMENTARY
The Fifth Circuit’s dismissal of PACAN’s petition is not surprising given the Texas Supreme Court’s response to its certified question. The language of the approved local program matters.
The Fifth Circuit’s opinion is also a cautionary note about trying to apply the Texas Supreme Court’s decision on the scope of BACT outside the Texas program and affirms the supremacy of the federal test as applied to federal PSD permits. This is guidance air practitioners also should keep in mind.
WANT TO LEARN MORE ABOUT PACAN?
NSR Law Blog provided background on the PACAN case in three prior installments: