2020 Environmental Real Estate Issues

In November 2023, the US Court of Appeals for the Fifth Circuit reversed a Texas Commission on Environmental Quality (TCEQ) decision to issue an air permit to a liquefied natural gas (LNG) facility. The 5th Circuit held that TCEQ had not adequately explained why this LNG facility could not meet the same limits as those in a permit for a similar LNG facility. In remanding the permit back to TCEQ, the 5th Circuit instructed TCEQ that it “must demonstrate that it is treating permit applications consistently.”

Consistent Application of BACT Requirement
By law, TCEQ must set emission limits consistent with a facility’s use of best available control technology (BACT). In November, the 5th Circuit said TCEQ must “adequately explain” why a permit issued to another LNG facility, which proposes to use the same equipment, does not establish BACT. That decision rejected TCEQ’s argument that the other facility, which was permitted but not yet built, could not be considered as establishing BACT until it became operational.

Certified Question Accepted by SCOTX
On February 16, 2024, the 5th Circuit withdrew its November decision and replaced it with a certified question to the Supreme Court of Texas (SCOTX), which SCOTX accepted on February 23, 2024.

The certified question is “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?”

SCOTX will set a schedule for the parties to submit briefs and for oral argument. The 5th Circuit will issue a new decision after reviewing SCOTX’s opinion regarding the certified question.