GOVERNMENT REFORM

September 17, 2010
Houston Endowment
Houston, Texas

This series of discussions centers around the 2010-11 audit of a number of state environmental agencies in Texas, and the opportunity this presents to improve the performance of these bureaucracies in protecting the state's public health and natural resources.

Presentations - An Overview of Sunset Review - Smitty Smith: 

Smitty Smith, director of the Texas office of the Public Citizen Educational Foundation (www.citizen.org/texas) began by explaining that Sunset Review is a statutorily mandated audit of state agencies in Texas which must occur at least every 12 years for each agency.  During the current cycle, the Legislature will review 27 agencies, 13 of which are in the environmental or energy field, including the Texas Commission on Environmental Quality, Railroad Commission, Public Utility Commission, Coastal Coordination Council, Texas Department of Transportation, and the Texas Department of Housing and Community Affairs.  The Sunset Review Advisory Commission is responsible for the work, and includes five state senators, five state representatives, two public spokespeople, and the House speaker and Lt. Governor.  The review involves two years of preparation, six months of discussion and lawmaking during the Legislative session next spring, and then two more years of rulemaking to implement the Legislature’s decisions.  The non-profits involved in the Review will seek to show where chronic weaknesses in the reviewed agencies might be, and then identify and press for adopting best practices.

The environmental non-profits will focus on several issues at the Texas Commission on Environmental Quality:  disregard for the cumulative impacts of permits, myopic reviews of water impacts isolated from air pollution and solid waste problems, refusal to recognize air quality impacts on cities from utilities only slightly beyond political boundaries, assignment of fines that are greatly exceeded by the financial benefits of pollution, acceptance of persistent toxic chemical flaring, and disdain for public and neighborhood concerns.

In looking at the performance of the Public Utility Commission, the NGOs will press for the Commission to focus more on protecting citizens from the effects of smog, mercury, and climate change, and less on the short-term financial concerns of competition.  Mr. Smith feels that the PUC could be a far stronger advocate for the use of conservation, co-generation, and renewable energy.  While Texas’ use of windpower is ranked first in the nation, and sixth worldwide if it were an independent country, the state has been far less progressive about using its solar and geothermal resources.

With regard to the Railroad Commission, the non-profit groups will ask for controls on conflicts of interest between the agency and the regulated community, and for more work on the toxic consequences of hydraulic fracturing in the Bartnett and Eagle Ford shales.  Shale-related pollution in significant:  Dallas/Fort Worth air pollution from Barnett compressor and pipeline leaks exceeds the pollution from the region’s cars and trucks.  And, the shale production there is expected to scale up - there are already 10,000 wells in the region, and 53,000 wells are planned.

Environmental groups are also focused on problems at the Public Interest Counsel, where gaps in statutory authority, and a general lack of independence, have left the Counsel without the ability to initiate cases or to appeal adverse decisions.

Mr. Smith stressed the public health importance of making these agency reforms.  Currently, Texas is first in the nation in emissions of nitrogen oxide, volatile organics, particulate matter, carbon dioxide from fossil fuels, and mercury from power plants.  Also, while air pollution emissions are gradually declining in the state, they are falling at a much slower rate in Texas than in the rest of the United States, particularly in the more developed and progressive states (California, Illinois, New York and New Jersey).

He then explained the progress to date in pressing for these changes at the state’s environmental agencies:  eight policy papers have been written and distributed, eight meetings with Sunset Commission staff have been held, one round of visits with editorial boards has been finished, and one Capitol briefing has been completed.

Presentations - Permits, Politics, and Sunset Review - Matt Tejada: 

Matt Tejada, Ph.D., executive director of Air Alliance Houston spoke next.  More about the Alliance, the result of a merger of the Galveston Houston Association for Smog Prevention and Mothers for Clean Air, can be found at www.airalliancehouston.org.  Dr. Tejada began his talk with a discussion about the recent EPA criticism of state air pollution “flex” permits, as a sign of the weakness in TCEQ’s work.  In theory, these flex permits allow more efficient air pollution controls, by putting an emission cap over an entire facility, and allowing the owner to decide where its money would best be spent in reducing discharges.  Unfortunately, in practice, these flex permits, together with permits by rule, standard permits, incorporation by reference, and other documents, have drawn a veil over the regulatory process, making it very complicated and difficult for state permit engineers and enforcement agents to understand what is actually legal.  TCEQ is now effectively admitting that these flex permits have left large gaps in the information the state needs to control pollution in Texas, since the agency is currently asking firms for extensive new data about facility construction and unit emissions.  Also, on September 16, the TCEQ and EPA went a step further, calling a meeting with eighty industrial attorneys asking that their clients voluntarily undergo a four-step process of “de-flexing”, surrendering their flex permits for simpler, more transparent permits.  Some smaller facilities have already decided that the murky complexity of flex permits is not worth the risk of being out of compliance with federal law, and so they are electing to trade in their flex permits for simpler licenses.  In a recognition from the State Legislature that there were serious problems at TCEQ, and to deal with those problems in synch with those at its sister environmental agencies, the Sunset Commission moved TCEQ’s review up two years to be dealt with in the 2011 Session.

Texas NGOs’ work on the Sunset process has been helped greatly by the cooperation of Larry Soward, a former TCEQ commissioner, who felt that the agency was captured and crippled by gaps and weaknesses in its governing statute.  Also, the oversight of the TCEQ has been strengthened by the Chairman of the Sunset Commission, Glenn Hegar, who has publicly said that the TCEQ’s audit is his highest Sunset priority.  Further, Byron Cook, a House member of the Sunset Commission has echoed this concern, pointing out that few state agencies other that the TCEQ have such a wide and deep effect on Texans’ daily lives, including food, health, and transportation.  Nevertheless, TCEQ’s Sunset Review will have to compete for legislators’ attention in a very busy Session (with possibly multiple special Sessions), due to the fact that the State is considering the review of 27 agencies simultaneously, and must reconcile an $18 to $20 billion dollar deficit. 

Presentations - Community organizing for Sunset Review - Bee Moorhead: 

Bee Moorhead, the executive director of the interfaith organization, “Texas Impact Education Fund”, spoke third.  She is organizing the grassroots outreach and support for the Sunset Review policy work.  She said that it was unusual, and fortunate, that Texas has an open, public Sunset Review:  it is unique among the states, and she will seek to take advantage of the opportunity.  She is working with the Alliance for a Clean Texas (www.acttexas.org), a federation of close to 20 public interest non-profits in Texas, including the Environmental Defense Fund, Sierra Club, Public Citizen, Texas Campaign for the Environment, Clean Water Action, the Texas League of Conservation Voters, and others.  Legislators have been impressed by how ACT has coordinated its members, convened its town hall meetings, and prepared its reports. From Ms Moorhead’s particular background in the faith community, she tries to add a stress on shared values, an emphasis on a positive message, and a long-term understanding of why environmental work is important.  To get ACT’s message out, they are using a variety of tools:  postcards for constituents to send to their legislators, a photo contest for images of what the public loves about Texas, a website (www.acttexas.org), polls about Texans’ attitudes about the environment, and a large array of meetings (September 15 in Houston (at UH-Downtown), September 27 in Victoria, October 7 in Corpus Christi, October 7 in Fort Worth, October 14 in El Paso, November 1 in Beaumont, and November 8 in Dallas).  Ms Moorhead is working particularly hard at getting their message into a format that younger people will see and understand, using short videos distributed on the web through Vimeo and Youtube sites.

 Questions and Answers: 

Q: How do Texas’ state environmental agencies compare with other states’ bureaucracies?  Smitty Smith said that their record ranges from the worst of the worst to the best of the best (for instance, in implementing the renewable energy portfolio standards and building out a world-class wind power system).

Q: Have the environmental non-profits in ACT gotten help in their Sunset Review from advice of current and former agency board and staff?  Mr. Smith said “yes”.  For example, an ex Railroad Commission board member told him about how 85% of Commission contributions were made by oil and gas operators with allocation rulings pending before the agency.  Whistleblower staff have also been helpful in reforming the agencies:  an important example is the group of Low-Level Radioactive Waste Disposal Authority staff who quit en masse after being overruled by the Commission, who had met ex parte with the successful applicants for a proposed Andrews County site.

Q: What effect might there be from the flex-permit disagreement between EPA and the TCEQ on the fate of the White Stallion coal-powered utility in Matagorda County, southwest of Houston?  Dr. Tejada said that rejection of a single air permit would not derail the utility plant (other permits, on water use and discharge, and wetland filling, and solid waste disposal, are also required).  Further, there are questions about EPA’s legal authority to trump a state-permitted activity.

Q: How can reformers introduce more transparency into how these agencies operate?   Mr. Smith mentioned several possible changes:  time limits on campaign gifts relative to elections and commission decisions, election law reform, disclosure of contributions and meetings, restrictions on revolving door jobseekers, limits on gubernatorial job appointment powers, and revision of agency missions (making their goal more health-oriented, and less focused on economic development).

Q: Which state decisionmakers might have yet seen the report, “TCEQ Air Permitting and Enforcement” issued in June 2010 by ACT?  Mr. Smith, Mr. Tejada and Ms Moorhead agreed that Bill White had seen the report, in several iterations, and that Rick Perry’s chief energy and environmental advisor had also seen it.  Many shorter documents have also gone out to elected and campaigning politicians.  As well, the Texas League of Conservation Voters, Women’s League of Voters, and the Sierra Club have been meeting with over a dozen candidates in close races in the Dallas/Fort Worth area and in San Antonio to explain concerns about the state environmental agencies and policies.