Environmental Roadblocks to Petrochemical Projects

The petrochemical industry has long flourished in Texas and Louisiana. Most viewed the positive benefits of the industry, such as job creation, economic growth, and the payment of state and local taxes, as outweighing the potential negative effects of the industry’s emissions or discharges. Over time, those emissions and discharges have been substantially reduced due to regulatory controls, advancements in control technologies, recycling and waste minimization, and a desire by industry to reduce its overall pollution footprint.

During the campaign, Mr. Biden said he wanted to “end fossil fuel.” Well financed environmental groups, now supported by and aligned with sympathetic personnel in regulatory agencies, seem to take this to heart and actively oppose any industry utilizing fossil fuels. The petrochemical industry, from producers, to pipeline companies, to refineries, and to manufacturers, have borne the brunt of this opposition, both in litigation and public opinion. These organizations and agencies actively use any argument or theory available to hinder and erect roadblocks to any new project or any expansion of an existing project.

An important arrow in the quiver has become environmental justice. Although the concept has been around for decades, environmental justice has been elevated to a top priority by the EPA under the Biden Administration. Over the last two years, EPA has infused the concept into its rulemaking, enforcement actions, permitting decision, remediation efforts, and grant awards to the public. EPA has also affirmatively signaled to groups opposing industry that it will take action against industrial facilities opposed by the groups.

For example, Administrator Regan toured areas in Louisiana and Texas during his Journey to Justice Tour in November 2021, meeting with many local environmental groups and stating among other things that EPA needed to “leverage our enforcement.” Thereafter, EPA began investigating the permitting practices of the Louisiana Department of Environmental Quality after receiving environmental justice complaints against LDEQ. EPA also initiated a federal suit against an industrial facility in Louisiana’s Industrial Corridor that has long been opposed by local and national environmental groups.

EPA has a general oversight role and, because it provides federal funds to state permitting agencies, has additional power to coerce those state agencies into prioritizing environmental justice in state permitting decisions. As a result, a facility seeking to locate or expand in a given area needs to be acutely aware of this increased and pervasive focus. In the past, designing, constructing, and operating a facility to meet existing or contemplated future regulations regarding air emissions or wastewater discharges may have been sufficient. This practice may not now be enough.

A facility will have to thoroughly understand the demographics of the area in which it operates. Tools, such as EPA’s EJScreen, provide information that can be used to determine the characteristics of a nearby community and to understand how an increase in emissions or discharges may impact that nearby community. EJScreen can indicate whether environmental indicators, such as levels of particulates or air toxics, are inordinately high in a community, signaling that the nearby community may already be overburdened by particulates or air toxics. In that case, a facility will likely have to consider additional safeguards, such as fenceline monitoring or enhanced control technologies, to alleviate or reduce any increased impacts on that nearby community. Without such additional safeguards, it is possible that environmental permits will not be issued by the state agency or a permit that is issued will be contested by EPA or environmental groups. In short, environmental permitting has changed drastically over the last two years. New considerations and new strategies are required to navigate this changing landscape.

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