EPA Tangles With Texas in Battle Over Air Quality

Agency Takes Activist Stance on Pollution, Calling Local Rules Lax; State Officials Complain of 'Bureaucratic Meddling'
By ANA CAMPOY
A more assertive Environmental Protection Agency is demanding that Texas tighten its pollution rules, drawing the ire of companies and some of the state's political leaders.
At the heart of the dispute is an EPA threat to void some of the state's air-quality regulations, which it says break federal law. The agency also is studying whether oil refineries -- of which Texas has many -- emit dangerous amounts of toxins.

Texas is the top carbon-dioxide-emitting state in the nation. State regulators say they have built a system that simplifies the permitting process, for example by regulating emissions from entire facilities, rather than smokestack by smokestack.
Environmental activists and city officials call the system too lax. But state officials say it has produced a cleaner environment, including a 22% drop between 2000 and 2008 in the level of ozone, which is blamed for respiratory problems. The state says its plan encourages industry to adopt greener technology.
"Our results speak louder than bureaucratic meddling," said Katherine Cesinger, a spokeswoman for Gov. Rick Perry, a Republican.
The EPA has emerged as one of the most aggressive regulatory agencies in the Obama administration. It has moved to regulate carbon-dioxide emissions, announced plans to set tougher limits on mercury emissions from coal- or oil-burning power plants and held up dozens of permit applications for coal-mining projects in Central Appalachia, citing concerns about water quality.
EPA Administrator Lisa Jackson has said the agency's moves will benefit the economy by improving public health and has pointed to the administration's support for tens of billions of dollars in government spending to subsidize electric vehicles and a modernized electric grid.
But business groups, including the U.S. Chamber of Commerce and the National Mining Association, say the agency also is saddling companies with costly mandates and could drive jobs outside the U.S.
The EPA this month appointed Alfredo Armendariz to head the office that oversees Texas and four other states. While all states must follow the same federal rules, they are allowed to develop their own implementation strategies, which are subject to federal approval. Mr. Armendariz had previously called the state's regulations inadequate.
Air-quality fights are especially heated in Texas. Officials in the big cities complain the Texas Commission on Environmental Quality, which enforces federal regulations, isn't strict enough. Dallas and Houston have been in violation of federal air-quality standards for years.
"The whole thing is wrong from start to finish," said state Rep. Lon Burnam, a Democrat who represents Fort Worth and serves on the environmental regulation committee at the Texas House of Representatives. "They permit almost anything."
Houston has been petitioning the federal government to toughen its standard for refinery emissions. In response, the EPA said last month it was withdrawing a rule signed at the end of the Bush administration that found the emissions posed no risk.
Environmentalists welcome the changes in EPA policies. "I've been waiting 15 years for this to happen," said Neil Carman, an air-quality specialist at the Sierra Club in Texas.
But companies are unhappy. Texas Industries Inc., a cement maker, recently cited changing EPA rules when it withdrew its request for a state permit to burn tires at one of its kilns, which it says would have reduced emissions.
Texas Industries is committed to clean air, said spokesman David Perkins. "The difficulties happen when the requirements go beyond that and get to a point when they cause problems for companies that ultimately don't result in any net benefit to the environment."
But others disagree with the company's assessment, said EPA spokesman David Gray, and there is no room for neighbors and community members to give feedback under current rules. "The Texas air permitting process needs to be transparent to the public," he said.
The energy industry hasn't spoken publicly on the appointment of Mr. Armendariz, an environmental engineer and an associate professor at Southern Methodist University in Dallas. He is the author of several scathing studies and memos on emissions from the cement and natural-gas industries, and has been a consultant to environmental groups fighting the companies.
He declined to comment on EPA policy issues until he completed the transition into his new job.
The Barnett Shale Energy Education Council, a group representing energy companies, has attacked Mr. Armendariz's past reports. Recently, executives at natural-gas producer Chesapeake Energy Corp. criticized Mr. Armendariz for producing what they said was misleading research.
Mr. Armendariz has said his work is based on government-issued data and his calculations are consistent with those of regional regulators.
Earlier this year, the EPA said it was seeking to invalidate the state's permitting system, contending that it allows companies to skirt federal rules under the Clean Air Act. The agency is expected to announce a decision on certain parts of the program by the end of this month.
"Our system is not broken," said Bryan Shaw, chairman of the Texas environmental commission. "It's just misunderstood."—Stephen Power and Ben Casselman contributed to this article.
Write to Ana Campoy at ana.campoy@dowjones.com