Permission to pollute
In a bid to quicken the EPA, a new leader is taking on an entrenched permit process
WASHINGTON – Lining the 50-milelong Houston Ship Channel is a network of chemical plants, oil refineries and other industrial facilities so vast that the city’s business leaders like to refer to it as the “petrochemical capital of the world.”
But the area also has some of the worst air quality in the country, drawing tough federal regulations that slow the development of new industrial projects. Companies seeking to build or expand plants must navigate a laborious permitting process that routinely requires them to spend 18 months going back and forth with state environmental agencies to gain permits needed to emit more pollution into the atmosphere.
Now, inside the Environmental Protection Agency, officials are working to find a way to speed and overhaul that process. With the backing of President Donald Trump, EPA Administrator Scott Pruitt has told staff that the agency’s air permitting process is too convoluted. He set a goal of processing applications in no more than six months.
That would be a dramatic departure from established practices. Under the current system, which dates back to 1963 when Congress passed the Clean Air Act, applicants must go through multiple reviews by state officials operating under tomes of rules and regulations promulgated by the EPA. The nationwide average wait time for a major air permit — called New Source Review — was 14 months for a coal- or gas-fired power plant or oil refinery between 2002 and 2014, according to
an Indiana University study.
“That’s where we’ve been for a long time,” said Toby Hanna, a consultant with Environmental Resources Management, a London firm that advises companies on the EPA’s air permitting process. “Some of the folks at EPA now were there in the (George W.) Bush administration trying to fix these problems.”
‘Second guessing’
Industries and their lobbyists have complained for years that the slow permitting times make the United States a less desirable place to locate manufacturing. In the months ahead, a task force assembled by Pruitt will review EPA protocols, with the goal of implementing new procedures before the end of the year.
In at least one case, Pruitt is not waiting. Under former President Barack Obama, EPA officials would frequently intercede before air permits were issued to double check the work of companies and state officials. But Pruitt described those reviews as “second guessing” in a memo to EPA regional administrators last month and said he planned to do away with the practice.
EPA officials insist that their goal is to streamline the permitting process, not relax air quality regulations. But environmentalists are skeptical, speculating that Pruitt’s ultimate plan is to allow companies to pollute more.
“These permits are super technical,” said Pat Gallagher, legal director of the Sierra Club. “There’s all sorts of process and engineering issues that come up and it’s not like you can just jam it through.”
Pruitt and Trump have moved to roll back a long list of environmental rules, including Obama’s plan to regulate greenhouse gas emissions from power plants and new offshore safety standards implemented after the explosion on the Deepwater Horizon drilling rig in 2010.
In his memo last month, Pruitt said he also would review a long-standing policy under which high-polluting facilities that operate under strict regulation remain subject to those tougher standards even when emissions are significantly reduced. Bill Wehrum, assistant administrator for EPA’s Office of Air and Radiation, described the policy as nonsensical and another example of an unnecessary layer of regulation that hurts economic growth.
“Can we be better and more efficient at what we do? Yeah,” said Wehrum, an agency veteran from the George W. Bush administration. “Can the permittee be more efficient? In a lot of cases, yeah.”
Lean regulation
At EPA headquarters in downtown Washington, one of the officials charged with speeding up the permitting process is Henry Darwin, the agency’s chief of operations.
As the head of Arizona’s environmental agency, Darwin said, he managed to cut wait times for environmental permits by more than 60 percent. He credits that time savings to the implementation of a management technique known as “lean manufacturing,” which has its origins in the efficiency protocols established by the Japanese auto manufacturer Toyota following World War II. Under the methodology, bureaucratic systems are analyzed for wasteful, unnecessary activities, which are then eliminated.
“The fact of the matter is most processes that have not gone through a process improvement event, 80 to 90 percent of that time the process takes is spent sitting without any activity,” he explained. “We’re just trying to eliminate periods of time where there’s no work being performed.”
But eliminating those wasted moments might not be so easy. Environmental consultants, hired by industrial companies to help navigate the permitting process, said one of the major causes in permitting delays is the lack of manpower at state environmental agencies due to budget cuts.
“All the states need more staff,” said Pat Patrick, vice president at the Houston environmental consulting firm Air Consulting, Environmental, & Safety. “Right now, you submit your application and have to wait your turn until it gets to the top of the pile. We tell our clients that it’s likely to be three months before you hear anything substantive from the state.”
In Texas, that has translated into lengthy waits for permits as companies have rushed to build petrochemical projects up and down the Gulf Coast, to take advantage of cheap natural gas flowing from the shale drilling boom.
French oil giant Total waited 20 months for an air permit for its new ethane cracker in Port Arthur. It took the Texas Commission on Environmental Quality more than 18 months to issue air permits for LyondellBassel’s new $2.4 billion chemical plant near the Ship Channel.
And that is nothing compared to the wait times in other states.
“Texas is pretty fast,” said Jeff Holmstead, a Washington energy attorney with the law firm Bracewell. “They say here are the requirements, we’re going to make the decision quickly.”
Further complications
Considering the long wait times in industry-friendly states like Texas, the question for some environmental consultants and lawyers is how much can EPA really do to speed things up, especially in states like California and New York, which have more extensive regulations.
Others worry that the Trump administration’s effort to move industry through the permitting process faster could lead to court challenges brought by environmental advocates, throwing the system into turmoil and creating even longer delays.
“The challenge is if EPA goes too far, there could be a backlash with the states trying to fill voids,” Hanna said. “We want to make the turn, but if we’re trying to turn too quickly, our necks are going to snap.”