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The cost of fighting the inevitable

Trib headline: Anti-Regulation Politics May Have Hurt Energy Industry. Oh, the irony.

Houston Ship Channel, 1973

Houston Ship Channel, 1973

Businesses in energy-related industries in Texas say they have been unable to take full advantage of the natural gas boom that is roaring across the state because of a delay in the issuing of greenhouse gas permits — an instance in which Texas’ anti-regulation stance might have actually hurt business.

The Environmental Protection Agency began requiring the permits more than three years ago, but the Texas Commission on Environmental Quality refused to enact the rules, arguing that it was illegal to regulate greenhouse gases. That left the responsibility to the EPA, which is only slightly larger than its Texas counterpart and has a small permitting division. As a result, the backlog of applications grew quickly, as did the complaints.

Texas lawmakers directed the state’s environmental agency last year to begin following the federal regulations. But it will take months for the agency to implement its own rules to take over the permitting.

The state has long fought with the federal government over regulations, especially those from the EPA. The chairman of the Texas agency, Bryan Shaw, who is among the many state officials who question the science of climate change, has repeatedly criticized the EPA for developing rules that could cripple the Texas economy.

Electric power retailers, along with energy transport and chemical companies, have told the TCEQ that the delay has put Texas at a competitive disadvantage against other states that had agreed earlier to issue the permits. Some executives said they have considered building in other states because of the delays.

[…]

Several industry lawyers and consultants estimated that the TCEQ would issue permits several months faster than the EPA, where in some cases the delays have been as long as two years.

“If it takes six months or a year to start a facility, well, then that’s a year you’re not going to be making any money,” said Bill Jamieson, director for air quality at the environmental consulting firm SWCA. “There’s no question that equity firms and large investors look at that as risk.”

[…]

Pamela Giblin, an Austin-based lawyer who represents many oil and chemical companies, said it would have been difficult for the state to follow rules that it had challenged in court. Next month, the U.S. Supreme Court will hear Texas’ argument that the EPA’s greenhouse gas permitting program is illegal. “If they had taken up the program, there might have been some pressure then to abandon the arguments and to leave the litigation alone,” Giblin said.

If Texas wins the case, “they’re going to look really astute for having taken a firm position.”

But there is no guarantee that will happen. Supreme Court justices have declined to hear Texas’ argument that greenhouse gases should not be considered a danger to public health and welfare.

Jamieson said companies thrive on regulatory certainty, and fighting rules can be more costly than following them.

“It really comes down to politics as to why this was done the way it was done,” he said. “You can look back on a number of instances in the state of Texas where utilities have challenged some pretty significant EPA regulation, and they’ve spent a lot of money, and the end result is: they have the regulation.”

See here for more on the SCOTUS hearing of that appeal, including some links to more in depth analysis of it. And yes, the state’s long and exhaustive fight against the EPA has been nothing but politics. The industry has finally recognized that the cost of denying reality is more than they care to bear, but the state isn’t there yet. Hopefully, SCOTUS will make it clear to them one more time.

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