“Real-World Operability” as the Touchstone of BACT in Texas Permitting

Introduction

In Port Arthur Community Action Network v. Texas Commission on Environmental Quality, the United States Court of Appeals for the Fifth Circuit confronted a recurring dispute in air- permitting practice: may an environmental regulator compel a proposed facility to adopt emissions limits that only exist on paper, having been approved for a different, still-unbuilt plant? The Fifth Circuit certified the controlling state-law question to the Texas Supreme Court, which, in its February 2025 decision (In re BACT Definition, 707 S.W.3d 102), held that under Texas law “best available control technology” (“BACT”) must have already proven, through experience and research, to be operational. Armed with that clarification, the Fifth Circuit denied PACAN’s petition to impose stricter nitrogen-oxide (NO_x) and carbon-monoxide (CO) limits on Port Arthur LNG’s proposed facility.

The case featured three principal actors:

PACAN – a community environmental organization seeking tighter emissions limits.
Port Arthur LNG, L.L.C. – the permit applicant planning a major liquid natural gas plant.
TCEQ – the Texas agency that administers both state and federal Clean Air Act programs.

By upholding TCEQ’s less stringent permit, the court established a critical precedent: un-demonstrated technologies, even if previously permitted elsewhere, cannot define BACT in Texas unless and until they are proven in actual operation.

Summary of the Judgment

1. Standing – The court affirmed PACAN’s associational standing based on its president’s affidavit describing personal and recreational interests likely harmed by increased pollution.

2. Certified Question – Because the scope of “has proven to be operational” in 30 T.A.C. § 116.10(1) was unsettled, the Fifth Circuit sought guidance from the Texas Supreme Court.

3. Texas Supreme Court’s Answer – “Operational” means demonstrated in real life; a mere permit, vendor guarantee, or engineering projection is insufficient.

4. Application to the Permit – Rio Grande LNG’s tighter limits (5 ppm NO_x / 15 ppm CO) were not yet achieved at any functioning plant; therefore TCEQ did not act arbitrarily in allowing Port Arthur LNG’s higher limits (9 ppm / 25 ppm).

5. Outcome – Petition for review DENIED; permit stands.

Analysis

1. Precedents Cited and Their Influence

Sierra Club v. Louisiana Department of Environmental Quality, 100 F.4th 555 (5th Cir. 2024) – confirmed federal appellate jurisdiction over state-agency permitting decisions under the Natural Gas Act and Clean Air Act.
Township of Bordentown v. FERC, 903 F.3d 234 (3d Cir. 2018) – persuasive authority for applying state standards of review when a federal court examines state-agency action.
United Copper Industries, Inc. v. Grissom, 17 S.W.3d 797 (Tex. App.—Austin 2000) and Smith v. Houston Chemical Services, 872 S.W.2d 252 (Tex. App.—Austin 1994) – tether Texas Health & Safety Code § 382.032(e) to the substantial-evidence standard of the Texas APA.
Friends of the Earth v. Laidlaw, 528 U.S. 167 (2000) – foundational standing case relied on for PACAN’s associational standing.
In re BACT Definition, 707 S.W.3d 102 (Tex. 2025) – the decisive doctrinal pronouncement that BACT in Texas requires prior demonstrated operability.

2. Court’s Legal Reasoning

a) Standard of Review – Under Texas APA § 2001.174, the Fifth Circuit asked whether TCEQ’s decision lacked substantial evidence or was arbitrary/capricious. Because the definition of BACT was dispositive, the inquiry became almost purely legal.

b) State–Federal Framework – The court emphasized that Texas may impose its own BACT standard so long as it is not less stringent than federal BACT; applicants must meet both. EPA pre-emption arises only where Texas is less protective, which PACAN failed to show.

c) Operability Requirement – Relying on the Texas Supreme Court’s grammatical and purposive construction of “has proven,” the Fifth Circuit held that BACT cannot be defined by:

Permits granted to projects that remain unbuilt;
Manufacturer warranties or vendor guarantees; or
Pure engineering feasibility absent empirical performance data.

d) Substantial Evidence – No record evidence demonstrated any facility in the world had actually achieved the 5/15 ppm limits with the relevant turbine type. Consequently, TCEQ’s acceptance of 9/25 ppm was rational.

3. Likely Impact of the Judgment

Regulators – TCEQ now possesses a clear yardstick: an emissions limit is BACT only if at least one real facility already achieves it (or equivalent control efficiency) in a comparable context.
Applicants – Permit seekers can defend proposed limits by showing the absence of operationally proven tighter controls, reducing litigation risk. However, they must also monitor emerging plants worldwide because once a limit is demonstrated, BACT will move.
Environmental Advocates – Challenges based on “paper BACT” (limits contained in other pending permits, vendor brochures, or pilot studies) face steeper hurdles. Advocacy may shift toward supporting demonstration projects that create the requisite operational record.
Technological Innovation – The decision may slow adoption of cutting-edge controls in Texas until a first-mover facility proves them. It implicitly incentivizes pilot testing, third-party validation, and rigorous performance monitoring.
National Jurisprudence – Although binding only in Texas, the opinion may influence other state courts addressing similar PSD/BACT disputes, especially in the Fifth Circuit’s jurisdiction (Louisiana, Mississippi).

Complex Concepts Simplified

Best Available Control Technology (BACT): A sliding-scale pollution-control requirement applied to new (“major”) sources. It represents the maximum achievable reduction considering cost, energy, and practical factors. Under Texas law, the chosen technology must already have been operationally proven.
PSD Permit (Prevention of Significant Deterioration): A construction permit required for major emitting sources in areas that meet federal air-quality standards. It ensures new facilities do not “significantly deteriorate” air quality.
Certified Question: A procedural device allowing a federal court to ask a state’s highest court to resolve an unsettled point of state law that is outcome-determinative.
Substantial Evidence Review: The agency’s decision must be supported by “more than a scintilla” of relevant evidence such that a reasonable mind could reach the same conclusion.
Operability vs. Feasibility: Operability demands proof that the technology currently works in practice; Feasibility connotes technical possibility, which may be theoretical.

Conclusion

The Fifth Circuit’s decision, anchored by the Texas Supreme Court’s definitive construction of BACT, installs a “real-world operability” rule at the heart of Texas air permitting. The ruling balances environmental protection with regulatory predictability by refusing to treat un-demonstrated technologies as obligatory, yet leaving the door open for future, tighter standards once industry proves them in operation. Stakeholders across the spectrum—permit applicants, regulators, advocates, and technology vendors—must recalibrate their strategies to reflect this new benchmark, which is poised to shape Clean Air Act practice in Texas and potentially beyond.