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Date
4/24/2012

Energy Committee Tackles Regulatory Law

The Chamber’s Energy Committee discussed the regulatory challenges facing Texas refineries with Rich Walsh, Senior Vice President and Deputy General Counsel for Litigation and Regulatory Law for Valero Energy Corporation.

Walsh's described the environmental regulations applicable to refineries and real-world examples of the challenges this regulation poses for energy companies.

Part of the discussion demonstrated the permitting process and both the time delays and costs associated with receiving new source permits for large projects that impact the economy generally and energy companies in particular. As part of the presentation, Walsh discussed the ongoing litigation between the Environmental Protection Agency (EPA) and the Texas Commission on Environmental Quality (TCEQ). It has now become a multi-step approval process resulting in only a single permit being issued in the last year in Texas, where permits are routinely issued because of the efficiency of the permitting process. 

Following receipt of a TCEQ permit, a subsequent EPA greenhouse gas permit is required and additional changes are made to the TCEQ permit creating a loop between EPA and TCEQ that makes obtaining a permit very difficult. The TCEQ and the State of Texas have challenged the EPA's authority to require permitting of greenhouse gas emissions in the absence of legislation under the Clean Air Act. The challenge notes that the impacts resulting from the increased regulatory requirements, and associated increase in costs to produce the commodity such as gasoline, is increased cost to the consumer. Additionally, the uncertainty created by the regulatory instability makes investment in much-needed energy infrastructure projects difficult with resulting negative impacts for jobs and the economy. 

Air quality is much-improved over past decades due to pollution control equipment previously installed on refineries, power plants and other emitting sources with much less particulate matter, though the level of regulation relating to air quality continues to increase. 

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