Port Arthur Cmty Actn Netwk v. TCEQ

Case: 22-60556 Document: 301-1 Page: 1 Date Filed: 08/12/2025

United States Court of Appeals

for the Fifth Circuit United States Court of Appeals

Fifth Circuit

____________

FILED

August 12, 2025

No. 22-60556

____________ Lyle W. Cayce

Clerk

Port Arthur Community Action Network,

Petitioner,

versus

Texas Commission on Environmental Quality; Jon

Niermann, in his official capacity as Chairperson of the Texas Commission

on Environmental Quality,

Respondents.

______________________________

Appeal from the Texas Commission on Environmental Quality

Agency No. 2021-0942-AIR

______________________________

Before Wiener, Graves, and Douglas, Circuit Judges.

James E. Graves, Jr., Circuit Judge:

Port Arthur Community Action Network (“PACAN”) petitions for

review of a decision by the Texas Commission on Environmental Quality

(“TCEQ”) to not impose certain emissions limitations on a new liquid

natural gas (“LNG”) facility that it previously imposed on another such

facility. The petition centers on the novel, but determinative, question of

whether, under Texas law, “best available control technology” encompasses

air pollution control methods that TCEQ has issued a permit for but are not

yet in operation. We accordingly certified that determinative question to the

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Texas Supreme Court. 92 F.4th 1150, 1551 (5th Cir. 2024) (per curiam).

Because the Texas Supreme Court has now clarified that, under Texas law,

“best available control technology” cannot refer to methods that are not yet

operational, we DENY PACAN’s petition.

I.

The federal Clean Air Act authorizes the Environmental Protection

Agency (“EPA”) to establish nationwide air pollution standards, including

emissions standards for nitrogen oxides (“NOx”) and carbon monoxide

(“CO”). 42 U.S.C. §§ 7408-7409; 40 C.F.R. pt. 50. The EPA outsources

enforcement of some of these standards to the states, which, in turn, adopt

EPA-approved State Implementation Plans (“SIPs”).

In Texas, the TCEQ is the agency responsible for enforcing the

federal and state versions of the Clean Air Act. Texas’ SIP requires TCEQ

to issue a Prevention of Significant Deterioration permit (a “PSD permit”)

before a “major stationary source” of pollution is constructed in an EPA

attainment area. 40 C.F.R. § 52.21(a)(2)(i). A “major stationary source” is

a facility that has the potential to emit more than 250 tons of a regulated

pollutant per year. Id.

To receive a PSD permit, an applicant must demonstrate that the

emissions sources at its facility satisfy a metric known as Best Available

Control Technology (“BACT”). 42 U.S.C. § 7475(a)(4); Tex. Health

& Safety Code § 382.0518(b)(1). Generally, BACT requires new

facilities to reduce pollution to the maximum degree possible, accounting for

cost and other practical concerns. See 40 C.F.R. § 52.21(b)(12); 30 Tex.

Admin. Code § 116.10(1). TCEQ and EPA have each adopted

definitions of BACT, though TCEQ’s definition incorporates EPA’s

definition by reference. See 30 Tex. Admin. Code § 116.160(c)(1)(A).

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Intervenor Port Arthur LNG, L.L.C. plans to build a liquified natural

gas plant and export terminal in Port Arthur, Texas. The proposed facility

has the potential to annually emit more than 250 tons of a regulated pollutant

and, thus, would be classified as a major stationary source. Port Arthur LNG

accordingly applied for a PSD permit from TCEQ in 2019. The company

identified multiple emissions sources, such as flares and oxidizers, and

proposed emission rates for each. As relevant here, Port Arthur LNG

proposed, for its refrigeration compression turbines, emission rates of 9 parts

per million by volume, dry (“ppmvd”) of NOx, and 25 ppmvd of CO.

After performing a technical review, TCEQ’s Executive Director

issued a preliminary decision and draft permit on June 2, 2020. The draft

permit included Port Arthur LNG’s proposed emission rates of 9 ppmvd of

NOx and 25 ppmvd of CO for the refrigeration compression turbines.

Following a public comment period, the Executive Director issued a final

decision on March 24, 2021, concluding that Port Arthur LNG’s draft

permit complied with applicable law. This decision was referred to the

Commission 1 for consideration at a subsequent public meeting.

Petitioner PACAN is a community organization in Port Arthur

focused on environmental issues. It requested a contested case hearing in

response to the Executive Director’s final decision. See Tex. Health &

Safety Code § 382.056(n). PACAN challenged multiple aspects of the

draft permit, including whether the proposed controls on various emission

sources would satisfy BACT. The request was granted, and the Commission

referred the application to the State Office of Administrative Hearings. See

Tex. Gov’t Code § 2003.047(a).

_____________________

1

In this opinion, the “Commission” refers to the adjudicative body that decided

Port Arthur LNG’s application, while “TCEQ” refers to the respondents in this case.

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An administrative law judge (“ALJ”) held a preliminary hearing and

determined that PACAN met the requirements for associational standing.

See Tex. Water Code § 5.115(a). Two ALJs then held a hearing on the

merits of PACAN’s challenge in February 2022. In support of its

application, Port Arthur LNG filed a certified copy of its application, the

Executive Director’s preliminary decision, and the draft permit. That was

sufficient for the company to establish a prima facie case that the draft permit

satisfied applicable legal requirements. Tex. Gov’t Code § 2003.047(i-

1).

In response, PACAN introduced, as an exhibit, a 2020 amendment

to a permit for Rio Grande LNG, a liquid natural gas facility that has been

approved but not yet constructed. Rio Grande LNG had proposed using the

same refrigeration compression turbines as the Port Arthur facility. The

amendment decreased the NOx and CO limits for Rio Grande LNG’s

refrigeration compression turbines from 9 ppmvd of NOx and 25 ppmvd of

CO—Port Arthur LNG’s proposed emission rates—to 5 ppmvd of NOx and

15 ppmvd of CO. The amendment stated that the new, decreased limits were

“consistent with the lowest levels of control for Refrigeration Compressor

Turbines; therefore, BACT is satisfied.”

On May 20, 2022, the ALJs issued a Proposal for Decision and

Proposed Order that recognized PACAN’s concerns. In relevant part, the

ALJs noted that Rio Grande LNG “utilizes the same [] turbines in

refrigerant compressor service” as Port Arthur LNG’s proposed project, but

that the NOx and CO limits proposed by Port Arthur LNG were higher.

They also noted that Port Arthur LNG “failed to identify Rio Grande LNG

in its BACT analysis[] and failed to demonstrate why a CO emission limit of

15 ppmvd is not BACT for the Facility.” Further, “neither [TCEQ’s

Executive Director] nor Applicant offered additional evidence to

demonstrate that there is a ‘compelling technical difference’ as to why

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Applicant’s CO BACT proposal is less than what has been accepted as

BACT in recent permit reviews.” Accordingly, the ALJs proposed that the

Commission approve the application subject to amendments that limited

Port Arthur LNG’s refrigeration compression turbine emissions to 5 ppmvd

of NOx and 15 ppmvd of CO, the same as Rio Grande LNG.

TCEQ’s Executive Director objected to the ALJs’ proposed

decision, writing that Rio Grande LNG’s emissions limits had not been

“demonstrated in practice,” as Rio Grande LNG was “not in operation.”

Meanwhile, David Garcia, a permitting staff member in the EPA’s regional

office, explained that under the EPA’s definition of BACT, technology “is

not always required to be operational or actually demonstrated in practice to

be considered technically feasible and BACT.” 2 He also wrote that “[w]hile

it is not mandatory to select a specific limit as BACT solely because another

similar source has done so, the basis for selecting a less stringent limit should

be documented in the permit record for evaluation.”

Port Arthur LNG’s application and the ALJs’ proposal for decision

then went to the Commission, which held a hearing on September 7, 2022.

Eight days later, on September 15, the Commission granted Port Arthur

LNG’s PSD permit application and rejected the ALJs’ proposed

amendments. It explained, as relevant here, that while Rio Grande LNG had

stricter refrigeration compression emissions limits, no “operational data”

showed that those limits are actually achievable.

_____________________

2

TCEQ argues that Garcia’s letter cannot be considered by this court because it

was never part of the administrative record. However, “[t]he record in a contested case

shall include . . . all pleadings, motions, and intermediate rulings.” 30 Tex. Admin.

Code § 80.275. Because PACAN attached the letter as an exhibit to its motion for

rehearing, it is part of the agency record.

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PACAN moved for rehearing. The Commission did not act within

55 days, so the motion was overruled by operation of law. See 30 Tex.

Admin. Code §§ 55.211(f), 80.272(e)(1). PACAN timely petitioned this

court for review.

II.

We have subject-matter jurisdiction to review PACAN’s petition

under the Natural Gas Act, 15 U.S.C. § 717r(d)(1). Sierra Club v. La. Dep’t

of Env’t Quality, 100 F.4th 555, 563–64 (5th Cir. 2024) (holding that a state

agency “act[s] pursuant to federal law” when issuing a permit pursuant to an

EPA-approved SIP). That said, federal appellate courts reviewing state

agency proceedings generally adhere to the applicable state law standard of

review. Twp. of Bordentown v. FERC, 903 F.3d 234, 270 (3d Cir. 2018)

(“Federal courts reviewing state agency action afford the agencies the

deference they would receive under state law.”); see also Sierra Club, 100

F.4th at 562 (adopting the approach of the “Third Circuit and others” in

applying the appropriate standard of review under state law).

Under Texas law, the only issue for a reviewing court to decide is

“whether the [Commission’s] action is invalid, arbitrary, or unreasonable.”

Tex. Health & Safety Code § 382.032(e). Texas courts interpret

this statute to incorporate the standard of review under the Texas

Administrative Procedure Act (“Texas APA”). United Copper Indus., Inc. v.

Grissom, 17 S.W.3d 797, 801 (Tex. App.—Austin 2000, pet. dism’d); Smith

v. Hous. Chem. Servs., Inc., 872 S.W.2d 252, 257 n.2 (Tex. App.—Austin

1994, writ denied). In accordance with the Texas APA, a court shall reverse

or remand the case if the agency’s findings, inferences, conclusions, or

decisions are “not reasonably supported by substantial evidence” or

“arbitrary or capricious or characterized by abuse of discretion or clearly

unwarranted exercise of discretion.” Tex. Gov’t Code

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§ 2001.174(2)(E)-(F). Whether that standard is met is a question of law that

is reviewed de novo. Grissom, 17 S.W.3d at 801; see also Phillips Petroleum Co.

v. Tex. Comm’n on Env’t Quality, 121 S.W.3d 502, 505 (Tex. App.—Austin

2003, no pet.) (citation omitted) (explaining that “[w]hether the

Commission failed to follow its own rules presents a question of law” and is

therefore subject to de novo review).

III.

A.

As a preliminary matter, Port Arthur LNG argues that PACAN lacks

Article III standing to challenge the Commission’s permit approval. As an

association, PACAN may invoke the standing of its members. Ctr. for

Biological Diversity v. EPA, 937 F.3d 533, 536 (5th Cir. 2019). To do so, it

must demonstrate that its members have individual standing. Id. (citation

omitted). That is, its members must have suffered (1) an injury in fact,

(2) fairly traceable to the challenged conduct, and (3) likely to be redressed

by a favorable judicial decision. Gill v. Whitford, 585 U.S. 48, 65 (2018).

Here, PACAN invokes the standing of its president and founder, John

Beard.

Port Arthur LNG argues that PACAN failed to allege that Beard

suffered any injury traceable to CO emissions in particular. PACAN, in

response, points to Beard’s declaration submitted to the State Office of

Administrative Hearings. There, Beard declared that his home is less than

four miles from the proposed facility and that “[i]f Port Arthur LNG is

allowed to emit all of the air pollution it says it will emit . . . [he] will . . . have to

limit how much time [he] spend[s] outside at [his] house” (emphasis added).

He added that he was concerned about health effects “as a result of the

additional pollution Port Arthur LNG will add to the air at [his] property”

(emphasis added). After detailing the ongoing recreational activities in which

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he has long engaged at nearby Pleasure Island and Keith Lake Cut, he

declared, “I am concerned that air pollution will harm recreational

opportunities at Pleasure Island and near Pleasure Island, such as the Keith

Lake Cut. I am worried because I am concerned that air pollution will harm

air quality, water quality, and plant life in this area” (emphases added).

The Supreme Court has found similar testimony of association

members—reflecting reasonable concerns about the negative effect of

pollution on their personal interests—to be sufficient to establish standing.

See Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167,

182–84 (2000). Notably, the Court did not require that testimony be so

granular as to identify specific pollutants. See, e.g., id. at 182–83 (detailing

concerns over water pollution caused by pollutant discharges). Accordingly,

Beard’s declaration is sufficient to support PACAN’s standing.

B.

Turning to the merits of this appeal, PACAN argues that because Rio

Grande LNG’s approved, but not-yet-operational, emissions limits were

BACT, the Commission erred by allowing higher NOx and CO limits for

Port Arthur LNG. TCEQ responds that the Commission’s determination

that those levels were not demonstrated and therefore not achievable, and

thus should not be required, is consistent with governing clean air

regulations.

PACAN’s petition effectively turns on whether Rio Grande LNG’s

emissions limits are considered BACT under Texas law. To resolve that

novel question, we certified the following question to the Texas Supreme

Court in February 2024:

Does the phrase “has proven to be operational” in Texas’[]

definition of “best available control technology” codified at

Section 116.10(1) of the Texas Administrative Code require an

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air pollution control method to be currently operating under a

permit issued by the Texas Commission on Environmental

Quality, or does it refer to methods that TCEQ deems to be

capable of operating in the future?

92 F.4th at 1152. The Texas Supreme Court accepted our certified question,

held oral argument in October 2024, and issued a clarifying opinion in

February 2025. 707 S.W.3d 102, 104 (Tex. 2025).

In relevant part, the Court held that the phrase “has proven to be

operational” within the definition of “best available control technology”

turned not on whether TCEQ has previously issued a permit approving such

methods, but rather, whether the technology itself was “technically

practical,” “economically reasonable,” “operational,” “obtainable,” and

“capable of reducing or eliminating emissions.” Id. at 107. It stressed that

because the Texas Administrative Code utilizes a perfect-tense verb form,

“has proven,” and requires proof through both “experience and research,”

the phrase “has proven to be operational” necessarily refers to methods that

have “already proven, through experience and research, to be operational,

obtainable, and capable of reducing emissions.” Id. at 108 (emphasis

original).

Crucially, the Court rejected the arguments that form the foundation

of PACAN’s petition. First, as to the use of Rio Grande LNG’s approved,

but not-yet-operational, emissions limits, the Court explained that the statute

“requires that the pollution control method has already been demonstrated

to be operational in the real world. Theoretical proof of a method’s

operability in the future is not enough.” Id. at 107–08. Stated otherwise, Rio

Grande LNG’s emissions limits, which, at the time of PACAN’s petition,

were not supported by real-world operational data, cannot be used as a

reference point for determining whether Port Arthur LNG’s proposed limits

were BACT.

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Second, and more generally, the Court clarified that “the existence of

a previous permit issued to [one facility] does not necessarily have any

bearing on the standards [another facility] must meet to satisfy the BACT

requirement.” Id. at 109. It observed that because TCEQ is obliged to issue

a permit for a facility that employs technology that is “at least BACT,” an

issued permit could reflect technology that controls pollution “beyond what

is currently available, technically practical, and economically reasonable.”

Id. at 108 (emphasis original). Both of these principles foreclose PACAN’s

use of the Rio Grande LNG facility’s approved-but-not-yet-operational

BACT emissions levels as a comparator for Port Arthur LNG’s draft

permit. Cf. id. at 109 (“[W]hen a previously permitted facility has not yet

been built—as appears to be the case here—its example will often be of

limited usefulness in determining the degree of pollution control that ‘has

proven,’ ‘through experience and research,’ to be ‘operational,’

‘obtainable,’ etc.” (quoting 30 Tex. Admin. Code § 116.10(1)) (citing

Tex. Health & Safety Code § 382.0518(b)(1))).

PACAN makes two arguments in response to the Texas Supreme

Court’s opinion. First, it maintains that “the record reveals ample evidence

that emissions limits of 5ppm NOx and 15ppm CO are achievable,” and

points to (1) vendor guarantees and (2) TCEQ’s approval of Rio Grande

LNG’s lowered emissions limits. But neither piece of information

constitutes operational evidence that available technology, which is

employed to achieve those lowered emissions limits, “has already proven,

through experience and research, to be operational, obtainable, and capable

of reducing emissions.” 707 S.W.3d at 108.

Second, PACAN suggests that TCEQ’s definition of BACT, which

is derived from its regulations for minor-source facilities, undermines the

federal definition of the same term. But the definitions are not mutually

exclusive in application: the federal definition concerns “major” facilities, 40

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C.F.R. § 52.21(b)(12), while the Texas definition applies to any “new or

modified facility,” major or minor, 30 Tex. Admin. Code § 116.10(1); see

also Approval and Promulgation of Implementation Plans; Texas; Revisions

to the General Definitions for Texas New Source Review and the Minor New

Source Review Qualified Facilities Program, 81 Fed. Reg. 26,180, 26,181

(May 2, 2016) (the EPA acknowledging that “the definition at 30 TAC

Section 116.10(1) . . . will be applied to all Texas [new source review]

permitting actions, major and minor”). And, the EPA has recognized that

TCEQ may apply both “Texas BACT and federal BACT to all PSD

permits.” 79 Fed. Reg. 66,626, 66,632 (Nov. 10, 2014).

Of course, “[f]ederal BACT requirements will govern the permitting

process if there is a difference in stringency between the federal BACT

requirements and the Texas BACT requirements.” Id. But requiring a

facility to meet both federal and Texas BACT requirements does not thwart

or undercut the federal requirement, and PACAN does not identify any

“difference in stringency” that would create a preemptive effect. Id. At

bottom, then, the (EPA-approved) concurrent nature of the Texas and

federal BACT requirements does not, on its own, undermine the federal

Clean Air Act.

IV.

For the reasons stated above, we DENY PACAN’s petition for

review of the Commission’s decision.

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