The House Committee on Environmental Regulation met on April 26th to hear invited and public testimony on interim charges covering TERP program allocations and the implementation of the following bills:

  • HB 1680, relating to the regulation of on-site sewage disposal systems on certain leased land that is owned by the federal government
  • HB 4472, relating to the Texas Emissions Reduction Plan (TERP)
  • SB 900, which updates performance and safety standards for chemical storage vessels

This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

HB 1680 Implementation – Invited Testimony

Kristi Mills-Jaruch, Texas Commission on Environmental Quality – Neutral

  • HB 1680 is related to onsite sewage facilities, allows tract of land owned by federal gov containing several leased parts to consider these as separate tracts; allows these tracts to use 5k discharge per day limit instead of counting all tracts together
  • Tentative date for rule change effective date is July 2023
  • Rep. Penny Morales Shaw – In dividing the tracts, how many do we have?
    • We don’t have a good number, at this point no one has requested leased land to be recognized like this; can keep you updated

 

HB 4472 Implementation – Invited Testimony

Mike Wilson, Texas Commission on Environmental Quality – Neutral

  • Provides handout on implementation of HB 4472 and timeline
  • HB 4472 was effective Sept. 1, 2021
  • Remanding funds for TxDOT to implementation congestion mitigation program, sets funding for other programs such as Diesel Emission Reeducation Incentive Program (DERIP)
  • Morales Shaw – Is the Diesel Emission Reduction Incentive Program DERIP the only program air quality funds are going to go to?
    • 35% of funds remitted to TxDOT for congestion mitigation, other funds to TERP
    • DERIP is one of ten
  • Morales Shaw – Are any program geared towards particulate matter, measuring or reducing?
    • There is a school bus emission reduction program that, diesel reduction programs reduce particulate matter
  • Morales Shaw – Any other programs used to monitor particulate matter?
    • There are monitoring programs under TERP, but can’t speak to specifics
  • Chair Brooks Landgraf – Know there are a lot of developments & more information may be available as things are implemented

 

HB 4472 Implementation – Public Testimony

Adrian Shelly, Public Citizen – Neutral

  • Use of TERP for congestion mitigation is concerning, building more highways doesn’t actually reduce air pollution so looking forward to robust cost/benefit analysis required under TERP
  • Particulate matter standard is likely to be reduced by the EPA later this year from 12 to 10, some areas very likely to fall out of standard; if we invest now, can get ahead of nonattainment issue
  • Many programs on NOx reduction would also reduce particulate matter
  • 17k people per year in TX die from air pollution
  • Rep. Ron Reynolds – Aside from Houston, what other areas would be in nonattainment
    • Not as familiar with other areas, Houston just barely made it into 12 standard, would expect other urban areas have the same problem
  • Reynolds – If Houston is nonattainment, what does that mean?
    • Nonattainment designation has impact of $100s of million or $1b or more
    • Houston has always been in nonattainment for ozone, have never before been nonattainment on particulate matter
  • Morales Shaw – What are other best practices to effectively reduce particulate matter? Other best uses for use of TERP funds?
    • DERIP has always been the most cost effective
    • Best strategy is to move away from combustion engines to inherently low emission techs
    • Other sources like concrete plants that TERP doesn’t address, but should be paying attention to this if goal it to protect public health

 

Tom “Smitty” Smith, TxETRA – Neutral

  • TxETRA is an EV advocate org, EVs are the best way to reduce emissions & also good for business; lots of vehicle manufacturers are making EVs
  • Charging infrastructure doesn’t fall under the bill in ports
  • Should change EV rebate language in statute to an incentive, would allow negotiating these into the deals
  • Rep. Alex Dominguez – Ports don’t qualify for the program currently?
    • They do, but infrastructure for charging is not allowed
    • Vehicles idling at 11 ports on TX border is an enormous source of emissions, occurs often with dredge trucks which are typically the oldest in the fleet
  • Rep. Vikki Goodwin – Changes to TERP, is that something TCEQ could do or would it need legislation?
    • Believe it would need legislative changes, TCEQ unlikely to operate without legislative authorization
    • Keep needing to come back to fix issues with TERP, these are clearly issues that were overlooked & also need to implement an incentive and lift prices needed for the heavier trucks
    • If this happened, GM, Toyota, etc., would likely move manufacturing of heavier EV trucks here; in competition with other states
  • Goodwin and Smith discuss incentives for small delivery/light truck chassis vehicles, $2,500/vehicle, well suited for EVs

 

Michael Lewis, Environment Texas – Neutral

  • Highlights benefits of using school bus EVs for emissions reductions and savings like fuel & maintenance
  • Also possibility for things like school buses to support electric grid; mass replacement of school buses with EVs could provide power to thousands of homes per day
  • Recommendations: smaller districts do not have the funds to take advantage of this, should waive requirement that buses need to operate on a route for 2 years as EV replacements would not qualify, should switch from first come/first serve to need-based approach

 

Mustang Cat – Neutral

  • Mustang and other dealers, Caterpillar, etc. have supported TERP programs since its inception; TERP is in the best shape it has ever been in
  • Appreciate that TERP funds are going to mobility rather than the state treasury
  • Believe it will take some time for TERP and funding mechanism to reach parts of the community that haven’t been able to access TERP funds; legislature should be patient
  • Landgraf – How do you expect this to play out timeline wise, HB 4472
    • Hopefully quickly, want to see emission reduce; don’t think timeline is something people can put a finger on, but hopefully will increase

 

Jay Blazek Crossley, Farm&City – Neutral

  • Speaking on CMAC portion of the bill, no more than 50% of these funds should be spent on single occupant vehicle (SOV) programs per year
  • Have focused on congestion mitigation, typical investment to reduce air quality by connecting low flow roads has not reduced air quality; Texans drive more than other parts of the country
  • Opportunity to take a balanced approach to air quality/congestion
  • Rep. John Kuempel – Where does your lane model come from?
    • TxDOT

 

John Beil, Citizens Climate Lobby – Neutral

  • Plan should be expanded to include greenhouse gases, have alternative to burning fossil fuels & regulation can speed adoption

 

Brody Burks, Hydron – Neutral

  • Hydrogen is a program in TERP that is getting more mature, often lumped in with natural gas or other techs, but hydrogen fuel cells only emit water vapor
  • While looking at TERP, is a continuous process of fitting program to the law & hydrogen fuel cells are a tech that could reduce emissions
  • Morales Shaw – Do Hydron and other companies doing similar things benefit at all from TERP?
    • Very few programs from TERP that benefit hydrogen fuel cells, University of Texas has a hydrogen program that have the only hydrogen fuel cell vehicles in Texas
    • UT received about $400k to expand fueling station last session
  • Morales Shaw – What is the current use of hydrogen powered heavy truck machinery?
    • A few companies are working towards this, no one is in the commercial delivery phase, Hydron is prototyping this summer with commercial deliveries next year
    • Hydron is focused on middle-mile portion of long haul trucking; EVs would need 4 or 5 recharges, but hydrogen vehicles could carry sufficient fuel cells

 

SB 900 Implementation – Invited Testimony

Craig Pritzlaff, Texas Commission on Environmental Quality – Neutral

  • New chapter with new performance standards for storage vessels, incl. above ground storage for hazardous substances, crude oil, petroleum, etc.
  • Petroleum refinery, petrochemical plants, and bulk storage terminals
  • Rule team was formed in Nov 2021, will be placed in Chapter 388 of TAC; will be holding stakeholder meetings in June on two separate days
  • Rule sets for performance standards, referenced to various consensus standards in the industry
  • Rule team has a program in place for registration, certification, and inspection program
  • By Sept. 1, 2027, all existing tanks will need to meet performance standards, any new tanks will need to meet design standards, in use tanks will need to meet standards within 10 years, retrofit on regular maintenance schedule
  • Goodwin – So did SB 900 speak to vulnerability of petroleum storage tanks to high volumes of rain?
    • SB 900 sets forth design and performance standards to hopefully prevent catastrophic failure during a natural disaster
  • Goodwin – Would this address pollution released during Hurricane Harvey?
    • Sets for design standards for overfill and fire protection, TCEQ has opportunity to look at other national consensus standards for flood protection, spill protection, etc.

 

SB 900 – Public Testimony

Sam Gammage, Texas Chemical Council – Neutral

  • Appreciated opportunity to work on bill as it passed during legislative session, key legislation to address storage tanks
  • TCEQ did not previously regulate this area, will be a brand new program for them; looking forward to stakeholder process
  • For any members who sit on Appropriations or might sit on Appropriations, SB 900 creates large number of FTEs that will need to be paid for; currently registration fees are set to support, but TCEQ has been historically underfunded and won’t have the FTEs unless funding exists
  • Landgraf – FTEs are an important note

 

Brian Shaw, Texas Oil & Gas Association – Neutral

  • Will allow for industry to work with TCEQ and public, part of process is making sure TCEQ has the resources to implement, incl. sufficient fees
  • Critical legislation to improve safety of storage vessels and will allow TCEQ to ensure adoption of industry standards
  • American Petroleum Institute has been working on severer weather & storm standards for storage tanks; expected this calendar year

 

Adrian Shelly, Public Citizen – Neutral

  • Oversight in vulnerability of storage tanks to heavy volumes of rain, only discovered as of result of Hurricane Harvey
  • If you get large volume of rain on top of roof sitting on hydrocarbons, roof sinks and tank can rupture, happened to 9 companies during Harvey
  • Bill speaks to API standards, Chapter 650 speaks to floating roof tanks, recommends 10 inches of rain in a 24 hour period; Houston regularly exceeds this standard and we are not keeping up with volume of rain

 

Cyrus Reed, Sierra Club Lone Star Chapter – Neutral

  • House version passed & significantly increased number of tanks covered, initial Senate version covered only a few tanks
  • Have concerns in only inspecting tanks once every 5 years, might be too long with extreme weather events
  • Should have specific language with excessive rainfall, problem with floating roof tanks and could be addressed in rulemaking

 

Evaluate Allocation of TERP Funds and Programs – Invited Testimony

Mike Wilson, Texas Commission on Environmental Quality – Neutral

  • Highlighting 10 programs in TERP, goal is to reduce NOx, support alternative fuels for vehicles, pilot program for port authorities to reduce emissions
  • $1.4b awarded in grants under TERP, $1.2b under DERIP, DERIP remains the most cost effective NOx reduction program
  • Second and third most efficient are seaport & railyard emission reduction program and the natural gas vehicle grant program
  • Highlights programs under TERP, after DERIP the most efficient are Seaport & Rail Yard Emission Reduction (SPRY) and Texas Natural Gas Vehicle Grant Program (TNGVGP)
  • TERP has opened light duty vehicles, SPRY; alternative fueling facilities to open soon, along with TNGVGP, new technology, etc.
  • Dominguez – How many ISDs take advantage of Texas Clean School Bus program (TCSB)?
    • Will need to check historically, since we opened we received ~120 applications
  • Dominguez – Similar program for metropolitan bus programs?
    • They can apply under DERIP and others
  • Goodwin – DERIP, SPRY, and are the most effective? Does this line up with funding?
    • DERIP receives the most, seaport & railyard gets 6%, just over $19m this biennium
    • TNGVGP gets 10%, $32.7m this biennium
  • Goodwin – Right amount is going to the right programs?
    • SPRY is typically oversubscribed, TNGVGP is typically undersubscribed
  • Landgraf – Tried to ensure that if funds were available after first round, these could go to oversubscribed programs; is this needed flexibility for the current round?
    • We do have this flexibility and have used it in the past
  • Morales Shaw – Curious about historical record of undersubscription and oversubscription, is flexibility moving funding around or getting word around?
    • Ability to do both, can move funding around; TERP is voluntary and TCEQ has developed an outreach program, working to expand this
  • Goodwin – Since 35% of funding going to congestion mitigation, any rules on this?
    • TxDOT would need to speak to this
  • Landgraf – Could bring TxDOT in to speak on CMAC, there are rules and funds must be spent on CMAC

 

Evaluate Allocation of TERP Funds and Programs – Public Testimony

Larry Linenschmidt, Hill Country Institute – Neutral

  • Would like carbon dioxide and methane to the emissions monitored under TERP
  • Many evangelical and other Christian institutions support action on climate change, US Military recognizes the threat; global warming is harming citizens’ wallets and health
  • Morales Shaw – Would like TCEQ to comment on how this recommendation would look

 

Mike Wilson, Texas Commission on Environmental Quality – Neutral

  • Would need to reach out to monitoring division to see what this would look like
  • Morales Shaw – Would like this info at some point
  • Goodwin – Surprised to find these aren’t included, do you know why?
    • TERP focused on NOx emissions
  • Landgraf – Continuing with public testimony

 

Cyrus Reed, Sierra Club Lone Star Chapter – Neutral

  • Big supporter of TERP, really liked previous version of TERP, disappointed with new version due to 35% transfer, but still recognize it’s more money than we’ve ever had for air pollution
  • EPA proposals have bumped up Houston and DFW to severe nonattainment for 2008, and then San Antonio and other to moderate nonattainment for 2015
  • Had some important elements for TCEQ in SB 1 such as annual report
  • Liked version of TERP that had more money for new technology
  • On energy efficiency and renewables are also a focus

 

Sam Gammage, Texas Chemical Council – Neutral

  • Not much more to say on implementation, but should keep in mind that purpose of TERP is for NOx emissions in nonattainment areas; will hear about other aspects like GHGs, methane, etc. that we are not in nonattainment
  • Getting bumped up to severe nonattainment in some areas which will bring a new set of requirements to meet; in Houston NOx is largely coming from mobile emissions
  • HB 2136 by Thompson was a great bill that would’ve reduced port emissions via tankers that ultimately didn’t pass, could’ve put a cap or scrubber over emissions from those tankers