Regulators Clear the Air on How Stricter Ozone Scrutiny Will Affect Local Business

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The Calaveras Power Plant.

Scott Ball / Rivard Report

The Calaveras Power Plant.

Stricter regulation of air quality in Bexar County would affect large, industrial businesses building new plants or expanding their facilities, according to state environmental officials and local business leaders.

The vast majority of existing businesses would see no changes, though some may be required to report additional information to the Texas Commission on Environmental Quality, the state’s environmental regulator.

Additional regulations on Bexar County’s air quality officially took effect on Monday, and San Antonio now joins the Dallas-Fort Worth and Houston metro areas as major megalopolises struggling to keep their ozone in check.

In the jargon of environmental regulation, Bexar County is now in “marginal nonattainment" after the U.S. Environmental Protection Agency announced in July that the county’s air is too polluted to meet a federal health standard for ground-level ozone.

Ozone forms when emissions of nitrogen oxides interact with volatile organic compounds in the presence of heat and sunlight. Nitrogen oxides most often come from vehicle exhausts, power plants, industrial sites, cement plants, and other combustion-related sources. Volatile organic compounds are tied to chemical use, chemical storage tanks, and gas stations, to name a few sources.

It takes both ingredients to make ozone, which irritates and sears the lungs and contributes to chronic conditions like asthma.

Local officials and businesses have until September 2021 to reduce average levels of ozone below a threshold of 70 parts per billion or face stricter regulations. Bexar County’s three-year average ozone levels now stand at 72 parts per billion, according to TCEQ data.

Large facilities like power plants and industrial sites make up about one-third of the nitrogen oxides emitted in the San Antonio area, according to TCEQ figures. Most come from cars and trucks. By contrast, only about 4 percent of volatile organic compounds come from these large emitters.

Federal and state air quality regulations now require more time and expense of some businesses than they did when San Antonio was considered a clean air city.

On Wednesday, about one dozen staff members from the TCEQ’s Austin and San Antonio offices held a roundtable at Mission Library to explain how the EPA’s decision would affect local businesses. Staff from some of the area’s top employers attended, including CPS Energy, Joint Base San Antonio, USAA, H-E-B, Southwest Research Institute, and Toyota.

At the meeting, TCEQ staff laid out a complex and detailed set of regulatory changes. TCEQ air quality team leader Jill Dickey-Hull at one point referred to a flow chart diagram with multiple boxes and arrows as a “schizophrenic wedding cake.”

There were some key takeaways. For businesses, the most significant regulations deal with large industrial sites seeking new permits to expand or modify their sites, TCEQ Air Quality Planning Manager Daphne McMurrer explained.

The stricter scrutiny would apply to new pollution sources in Bexar County that would emit 100 tons per year or more of nitrogen oxides or volatile organic compounds, she said. The same is true for modifications to existing sites that would add 40 tons per year or more of these pollutants to the atmosphere.

In both cases, companies would have to ensure they’re using pollution controls that allow them to emit the “lowest achievable emissions rate,” an EPA technical term.

McMurrer described it as “a little bit more of an in-your-personal-business permitting or authorization process” compared to previous requirements.

Regulations also require facilities to offset their emissions on a 1.1-to-1 basis, McMurrer explained. This can be done by purchasing emissions credits from other companies or finding ways to cut emissions elsewhere.

“We want emissions to go down, not up in this area,” McMurrer said. “So for every ton that you want to bring emissions up with your new project, you’ve got to find a way to bring emissions down.”

Cement plants are among the industrial sites in Bexar County these new rules could affect. Before the July decision, cement and construction materials companies “were hopeful that EPA was going to relent,” said David Perkins, president and CEO of the Texas Aggregates and Concrete Association.

“It does limit the abilities for these facilities somewhat to be able to expand capacity or to add capacity or to modify things…just because of the additional offset requirements that come into play,” Perkins said.

Perkins said the greatest concern to his industry would be if cement plants were required to start using more expensive pollution controls, such as selective catalytic reduction, at their facilities. Right now, selective catalytic reduction, which can lessen nitrogen oxide emissions, is not required.

“I do not see this as a likely outcome, but it’s certainly something that’s been a concern of ours – not only in Bexar County, but in other parts of the country,” he said.

The same scrutiny on changing or expanding sites would apply to companies like Toyota or Southwest Research Institute, which are among the major local sources of volatile organic compounds and nitrogen oxides, respectively.

Southwest Research has no plans to expand or seek new air permits in the short term, communications specialist Joanna Carver said. Toyota’s local external affairs office did not respond to a phone message left Wednesday.

Because the EPA only said Bexar County is too polluted to meet standards, its decision won’t affect companies producing oil and gas in the Eagle Ford Shale south of San Antonio, said Chris Ashcraft, interim president of Eagle Ford trade group South Texas Energy & Economic Roundtable.

Even if it did, many of the diesel engines used in the Eagle Ford, such as compressor stations, already meet new, more stringent diesel standards, he said.

“A lot of this is newer equipment, newer technology, and much lower emission profiles in terms of the way they run it,” Ashcraft said.

One change that might affect more businesses is a stricter requirement to report air pollution to the TCEQ.

As of 2016, the most recent year available, 88 sites in Bexar County reported some level of air pollution to the TCEQ, according to an emissions inventory for 2016, the most recent available online.

Some of these companies received letters from the TCEQ telling them they had to submit their pollution information. Now, many companies must take it upon themselves to report their emissions, Dickey-Hull said.

“We don’t have to notify you, you have to automatically submit to us,” she said.

That requirement only applies to facilities that emit 10 tons per year of volatile organic compounds, 25 tons per year of nitrogen oxides, or have the potential to emit 100 tons of either, Dickey-Hull said. Other emissions, including lead, could also trigger this requirement.

Dickey-Hull also said the EPA’s decision will not affect the fees that some companies must pay to the TCEQ based on the type of business they’re in. These fees are called air inspection and air emissions fees.

Last year, 13 sites in Bexar County paid a combined total of $1 million in air emissions fees, Dickey-Hull said, and 80 sites paid more than $337,000 combined in air inspection fees.

TCEQ officials did not respond to an emailed follow-up question Thursday about how many more businesses must submit inventories as a result of the EPA’s decision.

Officials with the City’s Metropolitan Health District hope that businesses will collaborate with them to help clean the air using voluntary measures. In August, City leaders charged Metro Health Director Colleen Bridger with tackling the ozone issue from the City’s side.

“We’ve been in great talks with Houston and have learned that Houston’s approach to lower ozone was to work really closely with businesses,” Bridger said at the roundtable.

Some might be hanging their hopes on a challenge to the EPA by Texas Attorney General Ken Paxton. In August, Paxton petitioned the U.S. Fifth District Court of Appeals asking for a review of the EPA’s decision.

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