By ROBIN BRAVENDER of Greenwire

Texas officials warned U.S. EPA this week they won't change or reinterpret their air pollution laws to comply with federal greenhouse gas regulations, arguing that the Obama administration's climate rules are illegal.

EPA plans to begin regulating stationary sources of greenhouse gases next January and asked states to inform the agency by this week whether they would need to change state laws or regulations to comply with federal policies.

But Texas Commission on Environmental Quality Chairman Bryan Shaw and Texas Attorney General Greg Abbott (R) blasted EPA for unlawfully attempting to force states to "pledge allegiance to its rules." The dispute marks the latest in a series of altercations between the Obama EPAand Texas as federal officials have moved to overhaul the state's air permitting program.

"In order to deter challenges to your plan for centralized control of industrial development through the issuance of permits for greenhouse gases, you have called upon each state to declare its allegiance to the Environmental Protection Agency's recently enacted greenhouse gas regulations -- regulations that are plainly contrary to United States law," the officials wrote in a letter sent Monday to EPA Administrator Lisa Jackson and EPA's Dallas-based Region 6 Administrator Al Armendariz.

"On behalf of the state of Texas, we write to inform you that Texas has neither the authority nor the intention of interpreting, ignoring, or amending its laws in order to compel the permitting of greenhouse gas emissions," the Texas officials say.

Specifically, the officials are taking issue with EPA's "tailoring" rule for greenhouse gases. The tailoring rule seeks to substantially raise the Clean Air Act's permitting thresholds for greenhouse gases from the current limits of 100 or 250 tons per year. Without the rule, even small facilities would be required to obtain greenhouse gas permits when the agency officially begins to regulate tailpipes' greenhouse gas emissions in January.

"Instead of acknowledging that congressionally set emission limits preclude the regulation of greenhouse gases, you instead re-write those statutorilyestablished limits," the letter says.

EPA air chief Gina McCarthy told Greenwire in June that the final tailoring rule was written to allow states to avoid regulating except in the narrow way her agency intended (Greenwire, June 2).

"We wrote it after talking to the states and realizing that some of the rulemaking uses the same exact language, and if we interpreted that language at the federal level to mean that you don't need to regulate, except the way in which the tailoring rule has designed it, that you can simply decide when to use our interpretation and move forward," she said. "And we know that many of the states are perfectly comfortable doing that."

For states that can't or won't immediately comply with the rules, EPA is planning to use its authority to bring them into compliance with federal rules. The agency sent a proposal to the White House regulatory review office last month that seeks to guarantee authority for federal implementation plans, or FIPs, that could replace state programs if the states do not comply with federal requirements by the deadlines (E&ENews PM, July 9).

"We'll work with the states to see what needs to be done both in regulation and in the law, so that we can make sure we're aligned on this," McCarthy said in June.

'Shootout at the O.K. Corral'

Bill Becker, the executive director of the National Association of Clean Air Agencies, said Texas is in the minority when it comes to compliance with EPA's climate rules.

"Texas is the only one I've heard who have said, 'Over my dead body,' but most others are trying to make this work," Becker said.

"The vast majority of states will be successful in having regulations ready to go by January 2, 2011," Becker said. "There will be some, maybe 20 percent or so, who won't make it, but not for lack of trying. They won't make it because either their legislature and/or regulatory bodies have processes in place that are protracted and difficult to achieve quick decisions, but they're working toward making this program operate."

For states that do not align with the federal program, EPA could issue FIPs to curb emissions or issue sanctions including the withholding of federal highway funding.

The battle between Texas and EPA "is going to be a shootout at the O.K. Corral," Becker said. But he said EPA won't give up without a fight.

"I think that EPA is very serious about taking this forward," he said.

To access and read the Texas letter please use the link http://www.nytimes.com/gwire/2010/08/04 /04greenwire-texas-defies-epa-onregulation- of-greenhouse-g-31939.html.

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