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Originally published Friday, August 6, 2010 at 1:53 PM

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Texas industries press to get EPA-approved permits

After a lobbying push by oil giants, a bipartisan group of Texas legislators have asked state environmental regulators to quickly solve a permit dispute with the U.S. Environmental Protection Agency that has left some of the nation's largest oil refineries in operating limbo.

Associated Press Writer

HOUSTON —

After a lobbying push by oil giants, a bipartisan group of Texas legislators have asked state environmental regulators to quickly solve a permit dispute with the U.S. Environmental Protection Agency that has left some of the nation's largest oil refineries in operating limbo.

A letter signed by 46 legislators is the latest indication that while Gov. Rick Perry and his Republican supporters are ready and willing to wage war with Washington on everything from environmental regulation to education spending, some battles are wearing on the industries that have helped Texas weather the recession.

Now, the state is trying to tiptoe the line between its federal fights and the need to keep industry - especially the oil giants - happy.

Twenty-nine legislators who signed the July 23 letter to the Texas Commission on Environmental Quality (TCEQ) are Republicans and support Perry's increasingly public and bitter battle against Democratic President Barack Obama's administration.

"This isn't a political issue for us. This is a jobs issue for our constituents," said Republican Sen. Dan Patrick of Houston, who supports the state's challenges in court but wants decisive legislative and enforcement action that will allow industry to operate freely.

"The federal government is out of control in trying to interfere with the business of Texas on multiple levels and this is just one example," Patrick said.

The permit issue has been rumbling quietly for years, but came to a head June 30 when the EPA officially disapproved Texas' program, telling the state more than 120 industries were operating with papers that violate the federal Clean Air Act. Texas has challenged the ruling in court but still has to find a way to undo a permitting program that has been in effect since 1995 and involves some of the nation's largest oil refineries, including Exxon Mobil in Baytown Texas and six owned by Valero Energy.

The crux of the debate is over the so-called flexible permits, which set a general limit on how much pollution an entire facility can release. The federal Clean Air Act requires state-issued permits to set limits on each of the dozens of individual production units inside a plant. The EPA says Texas' system masks pollution, making it impossible to regulate emissions and protect public health. Texas insists its permits are enforceable and in line with the law.

"Regardless of who is correct in this dispute, the disapproval of this program has created a cloud of uncertainty for those businesses that are operating under a flex permit," the 46 legislators wrote to the three governor-appointed commissioners who head TCEQ.

For companies that seek to "de-flex" their permits, "we strongly encourage the TCEQ commissioners and staff to dedicate all the agency resources necessary to address these permit alterations in the most expeditious manner necessary," they added.

The letter was written after several oil companies lobbied legislators. The letter follows the format and wording suggested in an e-mail by Julie Klumpyan, Valero's director of government affairs.

The letter and e-mails were obtained by The Associated Press from the Texas League of Conservation Voters.

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Bill Day, a Valero spokesman, said the oil company is disappointed in the EPA's ruling and supports Texas' court challenge, but can't wait the years it could take for a judicial ruling. So they asked TCEQ to "handle it as rapidly as possible because of this uncertainty we're dealing with."

"Uncertainty is the worst thing for business," Day said.

Richard Hyde, TCEQ's deputy director of permitting and registration, said the agency has been trying for months to find a structure that will be acceptable to the EPA, but has so far failed. In the meantime, at least three critical projects are on hold, including a major upgrade at the Motiva Enterprises LLC refinery in Port Arthur, Hyde said.

"We're trying to work out an agreement with EPA that we can provide to those companies that will give them some certainty," Hyde said. "This issue is totally a federal government issue."

The EPA says it too is being approached by companies seeking federally approved permits, Al Armendariz, the EPA's director of the region that oversees Texas, said in an e-mailed statement. "EPA encourages TCEQ to quickly provide flexible permit holders a pathway forward," he added.

David Weinberg, executive director of the Texas League of Conservation Voters, a group that supports the EPA's ruling on the flexible permits, said the letter and industry's pressure indicates companies want a quick resolution.

"Valero is one of the largest flexible permit holders," Weinberg said. "The fact that they're rallying to get TCEQ to work tells you that what the governor is doing is not working."

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