Texas Supreme Court holds BACT not forward-looking
- Eric L. Hiser
- 2 days ago
- 5 min read
In Port Arthur Community Action Network v. Texas Commission on Environmental Quality (PACAN), the Texas Supreme Court, on certification of a question from the U.S. Court of Appeals for the Fifth Circuit, addressed the proper definition of “best available control technology” (BACT) in the Texas program. Contrary to the U.S. EPA Region 6 suggestion that BACT is established by a prior permit decision for a similar facility, the Texas Supreme Court held that in Texas at least “previously issued permits are not determinative of BACT …. A previously permitted emissions level for one facility is neither necessary nor sufficient to establish BACT for other, similar facilities.” The Texas Supreme Court decision returns the matter to the Fifth Circuit for final disposition.
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 modifying the Port Arthur LNG permit limits to reflect the Rio Grande LNG limits. 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. 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.
NSR Law Blog provided background on the PACAN case in two prior installments:
These articles provide additional background.
ANALYSIS
The Texas Supreme Court took up the question certified to it by the Fifth Circuit:
Does the phrase “has proven to be operational” in Texas’s definition of “best available control technology” codified at Section 116.10(1) of the Texas Administrative Code require an air pollution control method to be currently operating under a permit issued by the Texas Commission on Environmental Quality, or does it refer to methods that TCEQ deems to be capable of operating in the future?
The Texas Supreme Court noted that the certified question revolved around a regulation, which is an “inferior source of law compared to the statutes from which they derive their authority” but similar interpretive rules are used and that the plain reading should generally be followed for both. Importantly, in reaching its decision, the Texas Supreme Court said that “we are not concerned here with any aspect of federal law or with any regulation or action of the federal Environmental Protection Agency” and that “if the answer is thought to be dissonant with some aspect of federal law, it is for others to decide what, if anything, should be done about it.” Slip op. at 3-4.
Turning to the Texas statutes, the Texas Supreme Court held that the Texas Act requires TCEQ to grant a permit if, among other things, “the proposed facility … will use at least the best available control technology, considering the technical practicability and economic reasonableness of reducing or eliminating emissions resulting from the facility.” Slip op. at 4. The Supreme Court focused on technical practicability and economic reasonableness as the two aspects of the statutory definition. The Supreme Court also held that the word “available” refers “to control technology that is currently available” and that available depends upon the technology, not a permitting decision.
With this understanding of the statute, the Texas Supreme Court turned to the regulatory text:
Best available control technology (BACT)—An air pollution control method for a new or modified facility that through experience and research, has proven to be operational, obtainable, and capable of reducing or eliminating emissions from the facility, and is considered technically practical and economically reasonable for the facility.
The Texas Supreme Court then determined that the proper answer to the Fifth Circuit’s question was probably “Neither” because in the Court’s view, the certified question didn’t capture the meaning of the Texas language. The Texas Supreme Court then held that the regulatory definition’s use of proof “through experience and research” foreclosed theoretical speculation about future capability. Ultimately, the Texas Supreme Court held that “by asking whether a technology ‘has proven,’ ‘through experience and research,’ to be ‘operational,’ ‘obtainable,’ and ‘capable of reducing or eliminating emissions,’ the rule asks an empirical question that looks to past experience and research. The Texas Supreme Court thus rejected the suggestion that BACT includes”methods that TCEQ deems to be capable of operating in the future.” Slip op at 10.
The court also rejected the notion that BACT depends upon a permit decision. The Texas Supreme Court held that under Texas statute, the TCEQ is determining that what was proposed for a facility was “at least” BACT – so that if more control is proposed by the facility, TCEQ is bound to grant the permit. Therefore, because more may have been required, a prior permit decision does not, by itself, establish the BACT floor but only that that control was BACT for that facility.
Accordingly, the Texas Supreme Court held that “previously issued permits are not determinative of BACT …. A previously permitted emissions level for one facility is neither necessary nor sufficient to establish BACT for other, similar facilities.” The Texas Supreme Court then returned the matter to the Fifth Circuit.
COMMENTARY
Putting aside the outcome for the moment, the Texas Supreme Court’s decision is a good example of regulatory interpretation that looks at the regulation in the context of its statutory and regulatory background, a process not as carefully followed as one might wish in these more partisan days.
As telegraphed in the earlier NSR Law Blog installments, NSR Law Blog believes that the Texas Supreme Court gets correct the question of whether the first permit decision adopting an emission limit at a more stringent limit sets BACT for all other facilities. Whatever the wishes of proponents for that approach, the Clean Air Act and most state statutes require BACT as a case-by-case determination for a specific facility. While other decisions may “inform” the conclusion, they do not “control” it. The Texas Supreme Court decision in PACAN is thus a good return to first principles in applying BACT. It does not foreclose more stringent limits elsewhere from making BACT more stringent but requires that such limits be substantiated by more than mere speculation and hat the final limit be based on what is the "best" "available" control technology for the specific source.