Vol. 51-1 Air Quality
New Air Quality Permit in Brownsville, Texas
On March 24, 2016, Texas LNG Brownsville LLC (Texas LNG) submitted an application to the Texas Commission of Environmental Quality (TCEQ) for a new air quality permit authorizing construction of a natural gas liquefaction and export terminal, to be located in the Brownsville Ship Channel in Cameron County, Texas. Texas LNG’s facility is one of three such facilities to be constructed in the area. Emissions from such facilities, predominantly those from pipeline-quality natural gas, include nitrogen oxides (NOx), carbon monoxide (CO), volatile organic compounds (VOC), sulfur dioxide (SO2), particulate matter (PM) at 10 and 2.5 micrograms, and hydrogen sulfide (H2S). The operation would not be a major source requiring review under the federal Prevention of Significant Deterioration new source review program. The TCEQ’s Executive Director (ED) issued a draft permit for Texas LNG’s application. Following a public meeting, the TCEQ received comments and requests for a hearing, and ultimately, Vecinos Para el Bienestar de la Comunidad Costera (Vecinos), and the City of Port Isabel (Port Isabel), among others, were admitted as protestant parties. The protestants argued that the draft permit was deficient and should be rejected, or, alternatively, that it should be revised to better protect air quality, human health, and property. Nonetheless, the Administrative Law Judges (ALJs) recommended that the TCEQ approve the draft permit with one revision.
Proposal for Decision
Burden of Proof and Prima Facie Demonstration
Texas LNG’s application was filed after September 1, 2015, making it subject to Texas Government Code § 2003.047(i-1)–(i-2) (SB 709), which states:
(i-1) [I]n a contested case regarding a permit application referred under Section 5.556 [of the Water Code] . . . the draft permit prepared by the [ED], the preliminary decision issued by the [ED], and other sufficient supporting documentation in the administrative record of the permit application establishes a prima facie demonstration that:
- the draft permit meets all state and federal legal and technical requirements; and
- a permit, if issued consistent with the draft permit, would protect human health and safety, the environment, and physical property.
(i-2) [A] party may rebut a demonstration under Subsection (i-1) by presenting evidence that:
- relates to . . . an issue included in a list submitted under Subsection (e) in connection with a matter referred under Section 5.556, Water Code; and
- demonstrates that one or more provisions in the draft permit violate a specifically applicable state or federal requirement.
Under SB 709, the ED’s draft permit on Texas LNG’s application established a prima facie demonstration and created a presumption that the permit, if issued, would meet all legal and technical requirements. This shifts the burden of production onto the protestants in a contested case; however, the ultimate burden of proof remains with the ED and the applicant to prove by a preponderance of the evidence that the applicant satisfies all applicable requirements. The protestants, therefore, may rebut the presumption by presenting evidence related to a referred issue and demonstrating that the draft permit violates an applicable state or federal requirement. The ALJs concluded on two issues that the Protestants failed to overcome the prima facie demonstration established by the ED’s Draft Permit. On the third issue, the ALJs concluded that the Protestants overcame the prima facie demonstration only in part.
The ALJs rejected Port Isabel’s contention that draft permits issued without clear adherence to the application review process should not be granted the presumption of compliance set forth by SB 709. Port Isabel asserted several deficiencies in the application review process, including that Texas LNG’s permit had been passed off by two different permit engineers over the course of two years, and that no engineer was available during the response to comments or permit contest who could vouch for the permit’s technical review adequacy. The only documentation of a technical review was the “Construction Permit Source Analysis & Technical Review,” which lacked any date of completion or signature. Port Isabel argued that such a review is essentially a draft memo and should not be considered a prima facie demonstration under SB 709. Nonetheless, the ALJs found that SB 709 creates a presumption and shifts the burden of production so long as the TCEQ reviewed the application and held an open meeting.
Referred Issues and ALJ Analysis
The following three issues were referred for hearing:
1. Whether the Draft Permit contained adequate conditions to protect against adverse effects on the health and safety of Port Isabel’s residences and employees, including sensitive subgroups;
(2) Whether the Draft Permit contained adequate conditions to protect against adverse effects on plants, marine and aquatic organisms, animals, wildlife . . .[and]
(3) Whether [Texas LNG’s application] properly calculated and addressed potential emission sources, emission rates, and background concentrations . . . .
Air Quality Analysis and Air Dispersion Modeling (Issue 1)
Port Isabel argued that Texas LNG was required under the Texas Clean Air Act (TCAA) and Title 30, Section 116.11 of the Texas Administrative Code to conduct a Modeling and Effects Review Applicability (MERA) analysis and that emissions of benzene from flares were not adequately detailed in Texas LNG’s MERA analysis. Texas LNG contended that a MERA analysis was not required for emissions from ‘“boilers, engines, or other combustion units fueled only by pipeline-quality natural gas’ and from ‘flares, heaters, thermal oxidizers, and other combustion devices burning gases only from onshore crude oil and natural gas processing plants.’” Nonetheless, Texas LNG conducted a MERA analysis and contended that emissions from the plant met the law’s applicable requirements. Both parties’ experts testified about the adequacy of the MERA analysis calculations, and some evidence existed that, if speciated, the benzene flare emissions would not have met applicable law.
The ALJs found that Texas LNG’s facility qualified for an exemption in MERA for boilers, engines, and other combustion units fueled by pipeline-quality natural gas, and that the benzene-admissions did not rebut the prima facie demonstration that the permit met all legal requirements.
Wildlife and Vegetation Impacts (Issue 2)
Port Isabel argued that Texas LNG failed to inform the TCEQ of how closely located the site is to the Laguna Atascosa National Wildlife Refuge, and it should have conducted an ecological risk assessment and bioaccumulation study to determine the true impact on the refuge. Texas LNG contended that the TCEQ only requires applicants to submit a U.S. Geological Survey map, and that Texas LNG did so. Furthermore, Texas LNG contended that its facility was compliant with the Environmental Protection Agency’s (EPA) secondary National Ambient Air Quality Standards (NAAQS), which the TCEQ uses to evaluate the environmental impacts of facilities. Secondary NAAQS are set at levels protective of public welfare, including impacts on soils, water, crops, vegetation, animals, wildlife, visibility and climate. Texas LNG also argued that a sufficient ecological risk assessment was already adequately conducted by the Federal Energy Regulatory Commission in its preparation of the site’s Environmental Impact Statement.
Port Isabel’s expert testified that even if the facility was in compliance with secondary NAAQS, the NAAQS “‘are not protective for nitrogen and sulfur deposition into the environment’ or for ‘the bioaccumulation of persistent organic pollutants or heavy metals.’” The EPA has recognized that NOx and SO2 have interrelated impacts on plants, soils, lakes, and streams, and that there is scientific support for developing a standard to limit acidifying deposition of these pollutants to sensitive aquatic ecosystems. Texas LNG’s expert also testified that the EPA has questioned whether secondary NAAQS standards should be revised but that they have not been revised yet.
The ALJs found that Texas LNG performed the required modeling to demonstrate compliance with secondary NAAQS. Even with scientific evidence of the interrelated impacts of NOx and SO2, without EPA revision to the NAAQS, the ALJs determined that Texas LNG had no duty to self-impose additional restrictions. Therefore, Texas LNG’s application met the requirements of applicable law.
Emissions Controls and BACT Analysis (Issue 3)
Vecinos, joined by Port Isabel, argued that Texas LNG failed to demonstrate use of the Best Available Control Technology (BACT) required under the TCAA. The TCEQ defines BACT as:
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.
In determining whether a control option is BACT, the TCEQ requires that applicants compare emissions reduction performance levels to those of options previously accepted as BACT in recent reviews for the same industry. The TCEQ implements a three-tiered approach in BACT analysis. Crucially, Tier I requires that sites implement BACT, but allows owners to consider the cost effectiveness of a given control option. In contrast, Tier III requires owners to implement control options with the Lowest Available Emissions Rate (LAER) without consideration of costs. Texas LNG’s facility was subject to Tier I review.
Vecinos asserted various faults with Texas LNG’s BACT demonstration. Vecinos argued that Texas LNG’s demonstration, which described the BACT comparison with previously accepted BACT as a case-by-case basis between entire sites, ignored the specialized meaning of the term “facility” within the TCAA as a “discrete or identifiable structure, device, item, equipment, or enclosure that constitutes or contains a stationary source. . .” That is, Vecinos argued that Texas LNG must demonstrate that it will implement BACT on each “facility” on its site. Vecinos then listed four facilities that Texas LNG failed to implement BACT—flares, hot oil heaters, thermal oxidizers, and fugitive emissions controls. The ALJs only agreed with Vecinos that Texas LNG had failed to consider BACT on hot oil heaters and the discussion of the heaters is illustrative of BACT considerations generally.
Texas LNG proposed the use of hot oil heaters with emissions limits of NOx of 0.024 lb/MMBtu, which exceeded the limit of 0.01lb./MMBtu described in TCEQ’s current BACT requirements. Vecinos argued that Texas LNG failed to perform a proper BACT analysis by failing to consider the hot oil heaters implemented at Freeport LNG, which were permitted in 2011 for a NOx emissions limit of 0.006 lb./MMBtu. Texas LNG contended that the Freeport LNG was subject to LAER, the more restrictive technology standard for nonattainment areas, and that comparison of the two facilities was inapt. The ALJs concluded that although Freeport LNG is subject to LAER, use of LAER control methods would be consistent with BACT under Tier I so long as the control method was economically feasible, and proposed that the draft permit be revised to require Texas LNG to apply the more stringent limit to its hot oil heaters. At its meeting on May 6, 2020, the TCEQ approved the Proposal for Decision, including the revised emission limit, and entered an order issuing the permit.
Ultimately, Texas LNG’s permit survived the contest despite the ALJs noting several deficiencies in the application process. In each case, the ALJs noted that the relevant evidence presented by the Protestants did not overcome the presumption established by SB 709. The contest illustrates the high bar a protestant now faces in contesting a permit once a draft has been approved by the ED. Port Isabel recently filed suit in the Travis County District Court against the TCEQ regarding the issuance of the permit to Texas LNG.
John Turney is retired Senior Counsel of Richards Rodriguez & Skeith and represented regulated companies in a variety of environmental and administrative matters before the TCEQ and other regulatory agencies.
Maxwell W. Anderson is a second-year student at The University of Texas School of Law and is a Staff Editor of the Texas Environmental Law Journal.
 Proposal for Decision, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 1 (2020) [hereinafter PFD].
 Id. at 2, 11.
 Id. at 20.
 Id. at 20.
 Act of Sept. 1, 2015, 84th Leg., R.S., ch. 116 §§ 1, 5, 2015 Tex. Sess. Law Serv. (S.B. 709), at 1 (codified at Tex. Gov’t Code § 2003.047).
 PFD, supra note 1, at 4.
 Tex. Gov’t Code § 2003.047(i-1)–(i-3).
 PFD, supra note 1, at 16–17, 24.
 Id. at 55 (stating that “the ALJs find that the Application properly calculated emissions sources and established appropriate conditions related to control technologies, with the exception of the hot oil heaters.”).
 Id. at 8.
 Closing Argument of the City of Port Isabel, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 2–6 (2020).
 Id. at 3.
 Id. at 6.
 PFD, supra note 1, at 8.
 Id. at 6.
 Id. at 13.
 Id. at 11.
 PFD, supra note 1, at 12–16.
 Id. at 16.
 Closing Arguments of the City of Port Isabel, Texas, Texas LNG Brownsville LLC, SOAH Docket No. 582-19-6261 16–17 (2020).
 PFD, supra note 1, at 18.
 PFD, supra note 1, at 19.
 Id. at 19, 21–22.
 Id. at 24
 Id.; see also Tex. Health & Safety Code § 382.0518(b).
 30 Tex. Admin. Code § 116.10(1).
 PFD, supra note 1, at 27.
 Id. at 25.
 Id. at 28
 Id. at 29; see also Tex. Health & Safety Code § 382.003(b); 30 Tex. Admin. Code § 116.10(4)).
 PFD, supra note 1, at 31.
 Id. at 55.
 Id. at 41.
 Id. at 44.
 Id. at 46.
 Agenda, Tex. Comm’n on Env’t Quality (May 6, 2020), https://www.tceq.texas.gov/assets/public/comm_exec/agendas/comm/marked/2020/200506.Mrk.pdf.
 See City of Port Isabel v. Tex. Comm’n on Env’t Quality, D-1-GN-20-004044 (Dist. Ct., Travis Cty., Tex. Aug. 5, 2020).