Background

Port Arthur LNG, L.L.C. applied to the Texas Commission on Environmental Quality (TCEQ) for a Prevention of Significant Deterioration (PSD) permit to construct a liquefied natural gas plant and export terminal in Port Arthur, Texas. The proposed facility would qualify as a major stationary source requiring demonstration that its emissions sources satisfy Best Available Control Technology (BACT) under both the federal Clean Air Act and Texas law. Port Arthur Community Action Network (PACAN), an environmental advocacy organization, challenged TCEQ's decision to grant the permit without imposing more stringent emissions limitations that TCEQ had previously approved for another LNG facility.

The Central Legal Question

The dispute turned on the interpretation of Texas's BACT definition under 30 Tex. Admin. Code § 116.10(1), which defines BACT as an air pollution control method that "through experience and research, has proven to be operational." PACAN argued that because TCEQ had previously approved lower emissions limits for another LNG plant—limits that EPA had determined satisfied BACT—those limits had "proven to be operational" and should have been imposed on Port Arthur LNG's facility. The novel issue was whether BACT could encompass control methods that had been permitted but were not yet actually operating in the real world. The Fifth Circuit certified this determinative question of Texas law to the Texas Supreme Court.

Procedural History and Standing

Before reaching the merits, the Fifth Circuit addressed PACAN's associational standing under Article III. The court held that PACAN's president and founder had submitted a declaration reflecting his reasonable concerns about the negative effect of air pollution from the proposed LNG facility on his recreational and personal interests, which was sufficient to establish injury in fact fairly traceable to the proposed facility. The court rejected arguments that the declaration needed to identify specific pollutants that would cause the president's injury. The court also determined that a letter from an EPA regional office permitting staff member discussing the BACT metric was properly part of the agency record because PACAN had attached it as an exhibit to its motion for rehearing before TCEQ.

The Court's Holdings

Applying the Texas Supreme Court's clarification, the Fifth Circuit held that the previously approved emissions limits for the other LNG facility had not "proven to be operational" within the meaning of Texas's BACT rule because those limits had not already been demonstrated to be operational through experience and research in the real world. The court further held that the proposed LNG plant satisfied BACT as defined by the Texas rule, and that the federal Clean Air Act did not preempt Texas's BACT definition. The petition for review was denied.

Implications

The decision establishes that under Texas law, emissions control technologies must have actual operational experience before they can be considered BACT, even if they have been approved by regulators for use at other facilities. This interpretation may affect how TCEQ evaluates permit applications for major stationary sources, particularly LNG export terminals, in determining what constitutes the "best available" control technology.