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Environment & Energy Report

EPA Defeats Challenge to Permit Approval for Exxon Expansion

May 29, 2020, 8:14 PM

The Environmental Protection Agency’s reasoning behind its decision to reject a challenge to a Clean Air Act permit issued for ExxonMobil’s planned plant expansion in Texas is persuasive and therefore entitled to deference, the Fifth Circuit ruled Friday, in defeat for environmental groups.

ExxonMobil applied for a Title I pre-construction permit to build a new ethylene production facility at its Baytown, Texas, plant in 2012. Because a Plantwide Applicability Limitation permit issued by the Texas Commission on Environmental Quality allowed the company to skip “major” new-source permitting requirements, ExxonMobil was granted a “minor” new-source permit for the project.

The Environmental Integrity Project and Sierra Club opposed the new-source permit, saying the PAL improperly shielded the facility from major new-source permitting. Two administrative law judges ruled against the groups, and TCEQ later allowed the company to modify its Title V operating permit to incorporate the new-source permit.

The groups petitioned EPA to object to the Title V permit, but the agency refused, saying “any such challenges should be raised through the appropriate Title I permitting procedures or enforcement authorities.” There’s no requirement that state or federal authorities revisit whether pre-construction permits are adequate under Title I during the Title V permitting process.

The U.S. Court of Appeals for the Fifth Circuit agreed, saying Title V doesn’t “tell EPA to reconsider new-source review in the course of Title V permitting.”

Subjecting a source’s pre-construction permit to new scrutiny, without any changes to the amount of pollution emitted, is inconsistent with Title V’s goal of “giving sources more security” in their ability to comply with the Clean Air Act, the court said.

The environmental groups’ view that the agency must review pre-construction permitting under Title V would allow an agency to “upset states’ permitting decisions with no clear mandate from Congress to do so,” wrote Judge Stuart Kyle Duncan.

The court denied the groups’ petition for review.

Judges Catharina Haynes and James E. Graves Jr. joined the opinion.

The Environmental Integrity Project represented itself and the Sierra Club. The U.S. Department of Justice represented the federal government.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

The case is Envtl. Integrity Project v. EPA, 5th Cir., No. 18-60384, 5/29/20.

To contact the reporter on this story: Maya Earls in Washington at mearls@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com

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