Judge overrules Texas, strikes down air pollution permit for Gulf Coast oil terminal

Max Midstreams Seahawk oil terminal at the Port of Calhoun County on June 7, 2023. (Dylan Baddour/Inside Climate News, Dylan Baddour/Inside Climate News)

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This story is published in partnership with Inside Climate News, a nonprofit, independent news organization that covers climate, energy and the environment. Sign up for the ICN newsletter here.

For the second time in three weeks, a court struck down an air pollution permit issued by Texas’ environmental regulator.

In a one-page ruling posted Tuesday, Travis County District Court Judge Amy Clark Meachum reversed a 2022 decision by the Texas Commission on Environmental Quality to deny local shrimpers’ request for a permit hearing and authorize an expansion of Max Midstream’s Seahawk Oil Terminal on Lavaca Bay, on the Gulf Coast between Houston and Corpus Christi.

Meachum sent the case back to the TCEQ for a hearing “on all relevant and material disputed issues of fact.”

The shrimpers, led by Diane Wilson, head of San Antonio Bay Estuarine Waterkeeper, had argued before the TCEQ that Max Midstream underrepresented expected emissions from its expanded terminal to avoid a more rigorous review process for larger pollution sources.

But TCEQ denied Wilson’s challenge to Max Midstream’s air pollution permit after the oil company’s lawyers argued that Wilson and the other shrimpers lacked standing because they lived more than one mile from the new and expanded terminal.

“Based on the quintessential one-mile test relied upon by the Commission for decades, none of the Hearing Requests can be granted,” Max Midstream’s lawyers wrote in March 2022. “Only a property owner with an interest within one mile or slightly farther could possibly qualify for a contested case hearing.”

An Inside Climate News investigation found in July that TCEQ has consistently invoked the “one-mile rule” to deny permit hearings for at least the past 13 years, even though no such rule exists in either Texas law or TCEQ rules.

While a TCEQ spokesperson denied the existence of the one-mile rule when asked about the practice, Inside Climate News compiled a list of 15 cases that centered on the one-mile standard using data assembled by the nonprofit law firms Texas RioGrande Legal Aid and Earthjustice, which reviewed 460 permit review requests from 2016 to 2021. They found that virtually all of the cases TCEQ accepted for review were filed by those who lived within about a mile of the point of dispute.

Wilson said she was “astonished” by Meachum’s ruling. “In 35 years I don’t think I have ever had a case like this where the air permit was remanded back,” she said.

Courts have rarely intervened on pollution permits in Texas. But prior to Meachum’s order, the federal 5th U.S. Circuit Court of Appeals in New Orleans last month struck down a permit for an East Texas gas terminal, ruling that the TCEQ failed to apply adequate pollution control standards.

Max Midstream’s Seahawk Oil Terminal sits about four miles across Lavaca Bay from a jetty at Port Lavaca, Texas.

A Travis County District Court judge recently reversed a 2022 decision to deny local shrimpers’ request for a permit hearing and authorize an expansion of Max Midstream’s Seahawk Oil Terminal on Lavaca Bay. Credit: Dylan Baddour/Inside Climate News

In its ruling, a three-judge panel at the 5th Circuit found the TCEQ had “acted arbitrarily and capriciously under Texas law” when it “declined to impose certain emissions limits on a new natural gas facility.”

“It’s definitely sending a message to TCEQ that it’s not following the law,” said Erin Gaines, an Earthjustice lawyer representing Wilson in the Max Midstream case before Meachum.

She recalled just a few cases over decades when courts have reversed Texas permits.

The TCEQ declined to comment. Max Midstream did not respond to a query.

In October 2020, Max Midstream applied for an expedited permit to authorize construction of eight new storage tanks, seven marine loading docks and 18 vapor combustors that would emit an additional 91 tons per year of nitrogen oxides, 89 tons per year of carbon monoxide and 82 tons per year of volatile organic compounds.

One month later, Wilson and her attorneys with the Environmental Integrity Project and Texas Rio Grande Legal Aid filed official comments alleging Max Midstream underrepresented expected emissions in its application in order to avoid a more rigorous permitting process and stricter pollution control requirements. Wilson and several other bay shrimpers requested a hearing before a state administrative law judge.

In its response, Max Midstream did not answer the allegation that its application was flawed. Instead it argued that the shrimpers involved had no right to bring forth a challenge to the permit, citing the TCEQ’s controversial “one-mile rule.”

Toby Baker, TCEQ's executive director at the time, agreed with Max Midstream and recommended denial of all hearing requests based on the requesters’ distance from the proposed terminal. On April 12, 2022, the TCEQ’s three commissioners, appointed by Republican Gov. Greg Abbott, voted to issue the permit.

In June 2022, Wilson sued the TCEQ, asking a district court in Travis County to reverse the agency’s decision and send the permit to a hearing.

Wilson said Meachum’s ruling was significant because it could also help in her fight against plans to dredge a bigger shipping canal to the Max Midstream terminal through a superfund site in Lavaca Bay.

Wilson, a fourth generation fisherwoman on the rugged middle coast of Texas, has fought petrochemical development on Lavaca Bay since the 1990s. She published a book on her struggle in 2005, won a $50 million settlement from Formosa Plastics Company in 2019 and received the Goldman Environmental Prize in 2023.

At 76, she hasn’t slowed down. On Monday she completed a 30-day hunger strike—one of many in her life—outside Formosa’s chemical plant on Lavaca Bay to protest alleged human rights abuses in Vietnam. She promised to fight as long as she’s alive.

“I have spent my entire life on the water,” Wilson said. “I value those bays and I consider them like family. So I feel like I’m fighting for my home, I’m fighting for my family, And you don’t give up on that.”