Capitol Offenses

The state’s designated environmental agency turned ten years old this year. To celebrate, in mid-June the Texas Natural Resource Conservation Commission received the dubious honor of appearing before the Legislature’s Sunset Advisory Commission, where agencies must periodically defend their programs and policies before a panel of House and Senate members. After months of analyzing the T.N.R.C.C. record, Sunset Commission staffer Jay Schmidt struggled to explain why we Texans find ourselves in our current environmental predicament. “It wasn’t so much that existing permits failed to protect the environment,” he told Pampa Republican Warren Chisum, the Sunset Chairman. “It’s persistent problems…that aren’t responding to the existing regulatory structure.”

The Commission’s report lists some of those persistent problems. Texas has 200 bodies of water currently classified as “endangered.” The Gulf of Mexico has a huge dead zone in which virtually no aquatic life can be found. Fifty percent of the population of the state lives in E.P.A.-designated “non-attainment” areas, where they breathe air certified as “unhealthful.” Millions more wake up every morning in “near non-attainment” metropolitan areas such as Austin, where the air quality is known to violate current E.P.A. standards. In this presidential election year, the T.N.R.C.C. prefers to call Austin “unclassifiable.” The Governor can’t be blamed for all of this: he didn’t make the mess, after all. Who then to blame, for the failure of the “existing regulatory structure?” How did we get here?

You could read the staff report prepared by the Sunset Commission, but you’ll learn more about what environmental regulation means in Texas just by watching the Commission at work. The T.N.R.C.C. is widely hated, by both regulated industries and aggrieved citizens, but for different reasons. Even as two hundred citizens from across the state were en route to Austin, to tell their stories of how the T.N.R.C.C. had failed to protect them from polluting industries in their hometowns, Chairman Chisum (who also chairs the House Environmental Regulation Committee) steered the first day’s discussion toward increased “flexibility” for companies seeking pollution permits. Meanwhile, the ranking Senate member on the Commission, Chris Harris, grilled the T.N.R.C.C. commissioners and staff over a problem a business in his district was having with the agency. Conservative Republican Buster Brown of Lake Jackson, who chairs the Senate Natural Resources Committee, looked on approvingly.

Neither Chisum, nor Harris, nor Brown, nor any member of the commission took the opportunity to address specific problems that citizen constituents are having with polluters. Democratic House Speaker Pete Laney, accused last session by some conservatives of being too liberal, has always made certain to stack the Environmental Regulation committee with conservatives (seven of nine members, including the chair and vice-chair, are Republicans). Like his predecessors as Speaker, he recognizes Environmental Regulation as the committee that more than any other holds the fate of the state’s “healthy business climate” in its hands. Even if the three T.N.R.C.C. commissioners (all former industry executives appointed by Bush) were environmentalists – which they emphatically are not – they would still have to contend with Chairman Chisum and Chairman Brown. They would still have to operate at the behest of a Legislature which made “economic development” one of the goals of the environmental agency’s mission statement. Indeed, as Sierra Club State Director Ken Kramer pointed out to the Sunset Commission, the T.N.R.C.C.’s name does not even suggest environmental or public health protection.

Yet the Sunset process has in the past led to some significant reforms. Working together under the banner of the Public Interest Sunset Working Group, a coalition of state environmental and public interest groups have combined their strengths to jump on the once-in-a-decade opportunity to reform the agency. And the hearings did raise some eyebrows, even among conservative legislators. “Well, that may be a problem, I guess,” chairman Chisum muttered, when Sunset researcher Jay Schmidt testified that, as far as his staff could determine, T.N.R.C.C. had never denied a permit application based on a company’s poor compliance history. In fact, Schmidt went on, his group had trouble determining if the agency even tracked compliance histories at all.

Public testimony, which consumed most of the second day of hearings, uncovered several other major holes in the “existing regulatory structure.” Take, for example, the case of Valero Energy Corporation. Corpus Christi resident Alfred Williams came to tell legislators about ongoing problems he and his neighbors have had with the company’s refinery, located about one mile from his neighborhood. Valero’s refinery suffers “upsets” – that is, unexpected or non-routine emissions – on a weekly basis. When that happens, Williams says, sulfur dioxide rains down on his neighborhood. Sulfur dioxide can cause respiratory problems, particularly in children and the elderly, and can aggravate existing cardiovascular conditions. It is also a precursor of acid rain. “It falls on your car. Eats up the metal. Destroys your plants,” Williams said. “Everyone in my neighborhood has respiratory ailments.” For years, Williams called the T.N.R.C.C. regional office during particularly bad upsets. If the upset occurred on weekends or evenings, he got a recording. If an inspector did come out to the neighborhood, it was usually hours later, or the next day, by which time the event had passed. “They said, we don’t smell anything. Then they left,” he recounted.

In fact, Williams (who has since joined with his neighbors to sue Valero) discovered that such upsets were not necessarily violations of the refinery’s permit. Provided they are promptly reported to the T.N.R.C.C., the company will generally not be fined, under agency rules for unplanned emissions. That is a lucrative loophole, as Williams’ attorney, Mike Davis, discovered. Davis and his associates found that from 1995 to 1998, the refinery actually released more emissions through upsets than it did through normal emissions, raising the question of how “unplanned” the upsets actually were. When the upsets – which came at a frequency of one every four or five days – were factored in, the company far exceeded its permitted emissions for each of those years. This is also allowable under current T.N.R.C.C. policy. During a brief interview outside the hearing room, T.N.R.C.C. executive director Jeff Saitas acknowledged that upsets as a rule are not considered violations, but that a fine is called for when a company has “significant upsets.” Asked how Valero (and other unnamed companies described in the Sunset report) can legally exceed its permit through upsets, Saitas expressed disbelief. “I have a hard time understanding that, how they could do that without harming public health. You cannot at any time harm people without violating the law,” he said.

That’s a comforting thought. Yet the Valero refinery has never been fined for upsets, despite reporting to the agency several sulfur dioxide releases that would be “significant” by any reasonable standard, including: 11,400 pounds in a forty-five minute period on February 9, 1995; 208,000 pounds over a twenty-hour period on May 13, 1995; and 167,310 pounds on September 12, 1995. In all, the company reported forty-four upsets in 1995, a year in which the refinery’s upset emissions were over ten times larger than normal permitted emissions.

In an unfortunate coincidence for the agency, that was the year the refinery won the Governor’s Award for Environmental Excellence. (That was the also the year the company began donating to the Governor’s campaign coffers, beginning with $6,000 in the fall of 1995, and totaling at least $47,000 by late 1998.) In announcing the award, then T.N.R.C.C. Chairman John Hall (who knew that a suit had been filed against the company by its neighbors, according to documents collected by attorney Mike Davis), said, “I commend Valero for the wonderful job it is doing to improve the quality of life in the community. Valero is an industrial leader with regards to environmental quality.”

In fairness to agency staff, Valero’s apparent abuse of the upset loophole would have been difficult to track: the company failed to tabulate upsets in its annual report for three years in a row, and buried the numbers inside the 400-page document in other years. It took hundreds of hours of research in both the Austin and regional T.N.R.C.C. offices (as well as the discovery process provided by the lawsuit) for Williams’ attorneys to tabulate the damning numbers on Valero. It’s that type of reform – tracking of compliance history and better record-keeping – that is most likely to be a product of Sunset’s review of T.N.R.C.C.

More significant reforms are possible, but less likely to make it through the legislature. Sunset staff recommended two changes that environmental groups have sought for years. One is to make the Office of Public Interest Counsel, which helps represent citizens who challenge the agency’s permit decisions, a truly independent entity, with a bigger budget and a director appointed by the Governor, rather than one hired and fired by the commissioners themselves. A second is to prohibit the current practice of having the agency’s executive director act as an advocate on behalf of industry in such disputes. Currently, the director’s role is to defend the agency’s preliminary decision to grant a permit; he is thus a de facto ally of industry in the trial-like proceedings, which take place before the three-member board of commissioners. The Sunset Working Group recommended that the director instead be available as an impartial resource witness, if called upon by the commissioners.

Industry groups like the Texas Chemical Council oppose this reform, for obvious reasons. The agency opposes it as well, despite admitting that the current practice poses a “public perception problem.” Outside the hearing, current executive director Jeff Saitas explained his objections. “On the one side you’ve got this well-funded applicant, on the other maybe a citizen’s group or a municipality, that’s not so well-equipped,” Saitas said. It’s up to the director to make sure that the factual record is complete, and that the commissioners hear all of the pertinent information; things might otherwise be too lopsided. (Never mind that the director has already sided against the protestant by giving his approval to the license.) In other words, citizens and environmentalists – not to mention the Sunset staff – have it all exactly backwards: Saitas is there to help the little guy.

Many across the state have grown tired of receiving this brand of help from the agency. At a rally held on the Capitol steps prior to the beginning of public testimony, San Antonio environmental justice activist T.C. Calvert seemed to capture the prevailing sentiment. “They always think they’re the experts,” he said. “But we have to live with the pollution 365 days per year, and that makes us the experts,” he told the crowd. Calvert, for one, has grown tired of waiting for reform. Waiving a broom over his head as he railed against Saitas, Bush, and the state’s polluting industries, he shouted, “Do we need a clean sweep?” “Yes!” came the reply.