S Texas Environmental Justice v. TCEQ

United States Court of Appeals for the Fifth Circuit ____________

No. 24-60580

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South Texas Environmental Justice Network, Petitioner,

versus

Texas Commission on Environmental Quality; Brooke Paup, in her official capacity as Chairperson of the Texas Commission on Environmental Quality; Kelly Keel, in her official capacity as Executive Director of the Texas Commission on Environmental Quality, Respondents.

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Petition for Review of an Order of the

Civil Aeronautics Board

Agency No. 2019-0624-AIR

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Before Higginbotham, Ho, and Douglas, Circuit Judges. Patrick E. Higginbotham, Circuit Judge:

Texas LNG is a liquid-natural-gas (LNG) terminal project in Brownsville, Texas. Since 2021, the executive director of the Texas Commission on Environmental Quality (TCEQ) has granted Texas LNG three extensions of its deadline to begin construction. South Texas Environmental Justice Network (STEJN) moved to overturn the third extension of the construction deadline, which TCEQ denied. This is a direct United States Court of Appeals

Fifth Circuit

FILED

January 14, 2026 Lyle W. Cayce Clerk

Case: 24-60580 Document: 121-1 Page: 1 Date Filed: 01/14/2026

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petition for review challenging TCEQ's denial of STEJN's motion to overturn. We DENY the petition.

I

The Clean Air Act authorizes the Environmental Protection Agency (EPA) to establish nationwide air-pollution standards.¹The 1970 amendments to the Clean Air Act introduced National Ambient Air Quality Standards (NAAQS), "which require concentrations of common air pollutants at levels safe to human health," and charged the EPA with setting them.² States help enforce NAAQS through EPA-approved state implementation plans (SIPs).³Every state's SIP must include a New Source Review (NSR) scheme—"a preconstruction permitting program for all new, stationary pollution sources"—that distinguishes between "major" and

"minor" sources.⁴"Major sources are facilities that emit more than a pre- identified amount . . . of a regulated contaminant" and are subject to strict requirements.⁵"Minor" sources, on the other hand, emit a regulated contaminant below significant-impact levels (SILs) and require only an abbreviated air-quality analysis.⁶

Texas LNG applied for minor-source NSR permits from the Federal Energy Regulatory Commission (FERC) and TCEQ, "the agency responsible for enforcing the federal and state versions of the Clean Air Act,"

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to build an LNG terminal on a 625-acre site bordering the Brownsville Ship Channel.⁷The permit application required Texas LNG to show, among other things, that its proposed facility would satisfy Best Available Control Technology (BACT)⁸standards and NAAQS, specifically for particulate matter⁹2.5 microns or less in diameter (PM2.5). FERC and TCEQ granted the permits, and litigation challenging those decisions followed.¹⁰The D.C. Circuit remanded the case to FERC without vacating the agency's order authorizing the permit, which FERC later upheld, and the Third Court of Appeals in Austin dismissed the challenge to the TCEQ permit for lack of subject-matter jurisdiction.¹¹That litigation delayed Texas LNG's construction timeline.

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Failure to timely begin construction typically renders a permit void.¹² TCEQ's rules, however, afford permittees up to three extensions of the construction deadline.¹³The first extension of 18 months may "be granted solely at the request of the permit holder."¹⁴To receive a second extension under subsection 116.120(b),

(b) . . . [T]he permit holder [must] demonstrate[] that emissions from the facility will comply with all rules and regulations of the commission and the intent of the TCAA, including protection of the public's health and physical property; and

(1) the permit holder is a party to litigation not of the permit holder's initiation regarding the issuance of the permit; or

(2) the permit holder has spent, or committed to spend, at least 10% of the estimated total cost of the project up to a maximum of $5 million.¹⁵

Subsection 116.120(c), governing third extensions, provides "[a] permit holder granted an extension under subsection (b)(1) of this section may receive one subsequent extension if the permit holder meets the conditions of subsection (b)(2) of this section."¹⁶In other words, a permittee that received an extension due to litigation delays may receive a third extension if it satisfies the expenditure requirement. _____________________

the D.C. Circuit and granting a five-year extension to begin construction); Vecinos, 2023 WL 4670340, at *3, *6.

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TCEQ's commissioners have delegated authority to the executive director to approve construction-deadline extensions.¹⁷After a permittee receives its first extension, the permit becomes "subject to revision" based on updated BACT or emissions information.¹⁸

Texas LNG's initial construction deadline was November 12, 2021. It applied for its first extension on September 20, 2021, citing pandemic- related delays. TCEQ's executive director, Kelly Keel, granted the first extension on October 15, 2021, and reset the construction deadline for May 12, 2023. On April 18, 2023, Texas LNG requested a second extension, citing litigation-related delays, and included updated BACT and federal- applicability analyses. The executive director approved the second extension on June 8, 2023, and reset the deadline for November 12, 2024. Texas LNG sought a third and final extension on May 13, 2024, attaching evidence that it received a litigation-based extension and its expenditures exceeded ten percent of the project cost. It again submitted updated BACT and federal- applicability analyses, confirming no changes had occurred since the permit's issuance. The executive director approved the third extension on July 22, 2024, and set the final deadline to begin construction for May 12, 2026. STEJN, an environmental-justice advocacy group, filed a motion to overturn and a request for reconsideration of the third extension. TCEQ requested additional briefing from the executive director, Texas LNG, and TCEQ's Office of Public Interest, which "represent[s] the public interest as a party to matters before the commission."¹⁹The executive director and Texas LNG urged the commission to deny the motion to overturn. The _____________________

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Office of Public Interest recommended the commission grant the motion to overturn on the issue of the facility's compliance with recently updated NAAQS. STEJN's motion to overturn was denied by operation of law as TCEQ failed to issue a decision.²⁰

STEJN filed a petition for review in this court, asserting (1) the permit became void before the third extension because the second extension was procedurally flawed; (2) the executive director lacked the authority to grant the third extension because she did not comply with section 50.133's procedural requirements for extension applications; and (3) Texas LNG did not satisfy section 116.120's requirements to receive a third extension.²¹ Texas LNG intervened.

II

Although petitions for review of TCEQ decisions ordinarily must be filed in Travis County, the Natural Gas Act (NGA) provides the Fifth Circuit original and exclusive jurisdiction over petitions to review "an order or action of . . . a State administrative agency acting pursuant to Federal law to issue, condition, or deny any permit, license, concurrence, or approval . . . required under Federal law" concerning natural-gas terminals.²²As Texas law governs an appeal of TCEQ's decision, we review _____________________

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de novo "whether the [Commission's] action is invalid, arbitrary, or unreasonable," which Texas courts construe "to incorporate the standard of review under the Texas Administrative Procedure Act."²³Under that statute, agency action may be reversed or remanded if "not reasonably supported by substantial evidence" or "arbitrary or capricious."²⁴ Reviewing for substantial evidence, we determine "not whether the agency reached the correct conclusion, but rather whether there is some reasonable basis in the record for its action," and we presume agency decisions are supported by substantial evidence unless the petitioner demonstrates otherwise.²⁵We "remand for arbitrariness if we conclude that the agency has not genuinely engaged in reasoned decision-making."²⁶

III

A

We begin with standing. STEJN is an association, so it must satisfy the associational-standing doctrine's three elements: "(1) the association's members would independently meet the Article III standing requirements [of injury, causation, and redressability]; (2) the interests the association seeks to protect are germane to the purpose of the organization; and

(3) neither the claim asserted nor the relief requested requires participation _____________________

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of individual members."²⁷TCEQ and Texas LNG argue STEJN lacks standing because its members' alleged injuries are neither traceable to the challenged TCEQ action nor redressable by a favorable decision from this court.

First, we address injury.²⁸To maintain suit, STEJN's members must suffer an "injury in fact," meaning "an invasion of a legally protected interest" that is "concrete and particularized" and "actual or imminent."²⁹ Texas LNG's planned construction site abuts the Bahia Grande Unit of the Laguna Atascosa National Wildlife Refuge and Garcia Pasture, a sacred site of the Carrizo Comecrudo Tribe. STEJN members aver their recreational, aesthetic, and religious experiences in the area surrounding the site will be harmed by the facility's projected air pollution. For example, Juan Mancias and Rebekah Hinojosa regularly fish and hike in the Bahia Grande Unit and allege that breathing polluted air will harm their health. Mancias and Dr. Christopher Basaldu, Carrizo Comecrudo members, assert their ability to worship near Garcia Pasture will be substantially burdened by breathing polluted air. And Mancias, Hinojosa, and Dr. Basaldu all enjoy the aesthetic beauty of the undeveloped area, which the planned construction and flare emissions will obstruct.

STEJN's members' averments are sufficient to establish an injury in fact. "[W]hen a person visits an area for aesthetic purposes, pollution interfering with his [or her] aesthetic enjoyment may cause an injury in fact,"

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so long as "the aesthetic experience was actually [or imminently] offensive [or harmful] to the plaintiff."³⁰And although Texas LNG has yet to begin construction, "[t]he Supreme Court has expressly held that a threatened injury will satisfy the injury in fact requirement for standing."³¹ Next, we consider traceability. "[T]here must be a causal connection between the injury and the conduct complained of—the injury has to be fairly traceable to the challenged action of the defendant."³²As STEJN "is not the object of a government regulation," causation here "depend[s] on how regulated third parties not before the court will act in response to the government regulation or judicial relief."³³STEJN "must show a predictable chain of events leading from the government action to the asserted injury" to support a conclusion that "third parties [i.e., Texas LNG] will likely react to the government regulation or judicial relief in predictable ways that will likely cause . . . the plaintiff's injury."³⁴ TCEQ and Texas LNG argue STEJN lacks causation because its members' injuries stem from the underlying permit for the facility's _____________________

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construction, not the third extension of the construction deadline. Although the challenged action here is not the genesis of STEJN's harm, there is a predictable link between TCEQ's decision to uphold the third extension and the members' alleged injuries. Texas LNG will likely respond to the third extension by starting construction before the final deadline on May 12, 2026. Construction could not begin this late without TCEQ's approval.³⁵The extension achieves the same goal as the permit—the project can go on—and breaking ground on the facility is the catalyst for the members' injuries.³⁶ STEJN has demonstrated traceability sufficient to confer standing. Finally, we turn to redressability. "To determine whether an injury is redressable, a court will consider the relationship between the judicial relief requested and the injury suffered."³⁷"[I]t must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision."³⁸Petitioners suing to require the agency to comply with procedure

"need not show that the procedural remedy that they are requesting will in _____________________

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fact redress their injuries."³⁹Instead, they must "show that there is a possibility that the procedural remedy will redress their injuries" by demonstrating "that the procedures in question are designed to protect some threatened concrete interest of theirs that is the ultimate basis of their standing."⁴⁰

TCEQ and Texas LNG argue a favorable decision from this court would not invalidate the injury-inducing permit, as TCEQ's denial of the motion to overturn the third extension is the only action before us, so STEJN's injuries are not redressable.⁴¹We disagree. STEJN need only show that TCEQ's reconsideration on remand could possibly redress its injuries because TCEQ's procedures are designed to protect its members'

"threatened concrete interest[s]."⁴²And STEJN meets that bar. TCEQ, as the enforcer of federal and Texas air-pollution laws, has promulgated rules _____________________

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governing construction extensions and their effect on underlying permits.⁴³ These procedural hurdles' purpose is to protect the community's aesthetic, recreational, and health-related interests in their environment.⁴⁴Those are precisely the injuries STEJN alleges here, so we find redressability sufficient for standing.

Having established STEJN's members independently meet Article III's standing requirements, we find the remaining elements for associational standing are also satisfied. First, this litigation is germane to STEJN's purposes. STEJN is a nonprofit organization that uses litigation to promote the social and environmental health of Latinx and indigenous communities in the Rio Grande Valley.⁴⁵Resisting the construction of LNG- export terminals in the Port of Brownsville is one of STEJN's key initiatives.⁴⁶Second, resolution in the "group context" is proper as STEJN's members need not participate for the case to progress; "the claims asserted and the relief sought by the petitioners are not particular to any individual" and do not "require individualized proof."⁴⁷ _____________________

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B

Turning to the merits, we first address whether the executive director had the authority to grant Texas LNG's third extension request.⁴⁸Two rules are relevant to this procedural issue; which one governs is a question of regulatory interpretation.⁴⁹STEJN argues the executive director lacked authority to grant the third extension because she failed to comply with the procedural requirements in Tex. Admin. Code § 50.133(a). TCEQ and Texas LNG respond that subsection 116.120(b), not 50.133(a), governs the process for the extension request here, and that the executive director complied with the former.

TCEQ's commissioners delegate authority to the executive director to approve construction-deadline extensions in subchapter G of chapter 50 and subchapter B of chapter 116.⁵⁰Chapter 50 governs "action on _____________________

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applications and other authorizations," and subchapter G deals with "action by the executive director" and "applies to . . . extensions of time to commence or complete construction."⁵¹Subsection 50.133(a) permits the executive director to act on "applications" subject to subchapter G if:

(1) public-notice requirements have been satisfied and the executive director files a response to them; (2) the application is uncontested, complies with the relevant statutory and administrative criteria, and does not raise new issues requiring the interpretation of TCEQ policy or alterations increasing allowable emissions; and (3) neither the executive director's staff nor the Office of Public Interest raise objections.⁵²Subchapter G does not, however,

"affect the executive director's authority to act on an application where that authority is delegated elsewhere."⁵³Nor does it apply to "air quality standard permits under Chapter 116 of this title, except for air quality standard permits that require a decision by the executive director."⁵⁴

Chapter 116 governs "control of air pollution by permits for new construction or modification," and subchapter B covers NSR permits.⁵⁵ Therein, subsection 116.120(b) provides "[t]he executive director may grant extensions to begin construction" on projects with NSR permits.⁵⁶But unlike chapter 50, this provision does not condition the executive director's _____________________

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authority to grant extensions on any prerequisite, such as notice and comment.⁵⁷

TCEQ and Texas LNG argue section 116.120's grant of authority is separate and distinct from the general delegations found in chapter 50; therefore, the latter's procedural requirements do not apply to the former's specific delegation for construction extensions. We agree. Subchapter G of chapter 50 does not apply to construction-extension requests for NSR permits under chapter 116, and subsection 50.131(c)(1)'s exception does not apply here as a construction-extension request under an NSR permit is not an "air quality standard permit[] that require[s] a decision by the executive director."⁵⁸Similarly, TCEQ's rules elsewhere require notice and comment only for "air quality permit applications or registrations," not extension requests.⁵⁹And most importantly, a specific provision will prevail over a general one where the two conflict.⁶⁰Section 116.120 is more specific to this case. Chapter 116 governs air-pollution permits, and subsection 116.120(b)'s delegation is within the subchapter on NSR permits—the type of permit _____________________

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Texas LNG holds and sought extensions under.⁶¹Conversely, chapter 50 applies to a variety of permit applications concerning water, waste, drilling, irrigation, and air quality.⁶²Thus, subsection 116.120(b) provides "authority [that] is delegated elsewhere" of the kind that subsection 50.131(a) exempts from the requirements of section 50.133.

We conclude the executive director was bound to comply only with section 116.120's requirements, and she did. Section 116.120 imposes no procedural requirements on the executive director before she may grant an extension, detailing only the permittee's burden.⁶³The executive director acted within her authority when she granted the third extension.

C

Finally, we evaluate whether Texas LNG made the requisite showing for a third extension. Everyone agrees that section 116.120 governs a permittee's substantive burden to receive a third construction extension. It provides, in relevant part:

(b) The executive director may grant extensions to begin construction. Permits issued to holders who have received extensions will be subject to revision based on best available control technology, lowest achievable emission rate, and netting or offsets as applicable. A first extension of 18 months may be granted solely at the request of the permit holder. One additional extension of up to 18 months may be granted if the permit holder demonstrates that emissions from the facility will comply with all rules and regulations of the commission _____________________

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and the intent of the TCAA, including protection of the public's health and physical property; and

(1) the permit holder is a party to litigation not of the permit holder's initiation regarding the issuance of the permit; or

(2) the permit holder has spent, or committed to spend, at least 10% of the estimated total cost of the project up to a maximum of $5 million.

(c) A permit holder granted an extension under subsection (b)(1) of this section may receive one subsequent extension if the permit holder meets the conditions of subsection (b)(2) of this section.⁶⁴

TCEQ and Texas LNG argue permittees must satisfy only two conditions to obtain a third extension under subsection 116.120(c): (1) prior receipt of an extension under subsection 116.120(b)(1) and (2) proof it has spent or committed to spend the requisite amount under subsection 116.120(b)(2). STEJN does not dispute that the executive director granted Texas LNG's second extension because of litigation. And the record contains substantial evidence showing Texas LNG "has spent, or committed to spend, at least 10% of the estimated total cost of the project up to a maximum of $5 million."⁶⁵So, Texas LNG has indisputably met both of subsection 116.120(c)'s express conditions.

But STEJN claims a third extension requires more. It argues Texas LNG must also demonstrate "emissions from the facility will comply with all rules and regulations of the commission and the intent of the TCAA" to protect public health, as stated in the "parent provision" to subsections _____________________

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(b)(1) and (2).⁶⁶STEJN argues this "parent provision" requires permittees to re-do the technical analyses underlying the permit when applying for a third extension—in other words, to show compliance with BACT determinations in recently issued NSR permits and current NAAQS—and that Texas LNG failed to do so. Thus, the issue is one of construction: does the parent provision in (b) apply to (c), where (c) references compliance with subparts (b)(1) and (2)? As STEJN fails to cite a case validating its interpretation, we turn to the well-worn rules of construction, which apply to regulations and statutes alike.⁶⁷

Generally, "material within an indented subpart relates only to that subpart" and "material contained in unindented text relates to all the following or preceding indented subparts."⁶⁸And "absent reason to think otherwise, statutory provisos generally modify only the provisions in which they sit."⁶⁹By the plain text, subsection 116.120(b) governs first and second extensions and subsection 116.120(c) governs third extensions.⁷⁰Subsection

(c) is not a "following or preceding indented subpart" to subsection (b); it is simply the next unindented provision in the section.⁷¹If a permittee has obtained a second extension under subsection (b)(1), the commission _____________________

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necessarily has found the holder "demonstrate[d] that the emissions from the facility will comply with all rules and regulations of the commission and the intent of the TCAA" and was "a party to litigation not of the permit holder's initiation regarding the issuance of the permit."⁷²Having shown that, subsection 116.120(c)'s only additional requirement is to "meet[] the conditions of subsection (b)(2)" concerning expenditures.⁷³Subsection (b)'s

"parent provision" relates to subsection (c) insofar as the former must have been satisfied for the permittee to have received a second extension, but nothing in the text suggests the permittee must demonstrate anew that

"emissions from the facility will comply with all rules and regulations of the commission and the intent of the TCAA" to receive a third extension.⁷⁴ Indeed, "relation is different than rewriting a [regulation]."⁷⁵STEJN's attempt to transplant additional requirements from a nearby provision into subsection (c) is unavailing, as "[n]othing is to be added to what the text states or reasonably implies."⁷⁶

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Even if section 116.120 required permittees to re-do the "parent provision" analysis to receive a third extension, there is substantial evidence in the record showing Texas LNG met that burden. Texas law requires TCEQ to conduct a rigorous, technical assessment of air-pollution control requirements, like BACT, for a proposed technology before a permit may issue.⁷⁷In its third extension request in 2024, Texas LNG stated the BACT determinations from the initial permitting process in 2020—deemed sufficient by TCEQ at the time—satisfy current BACT requirements because "no new control techniques [have] developed since the issuance of this permit; therefore, BACT for the equipment at the facility remains unchanged." Texas LNG attached an itemized summary and comparison chart of the permit's BACT requirements to show it remains consistent with current Tier I BACT requirements and associated TCEQ permitting policies. After reviewing the third extension application, TCEQ found Texas LNG "has demonstrated compliance with current BACT and has not made changes to the previously authorized project, which was demonstrated to be protective of human health." Accordingly, we find this evidence constitutes "some reasonable basis in the record" for TCEQ's approval.⁷⁸ The same goes for compliance with NAAQS. Texas LNG is eligible for a minor-source NSR permit because the proposed facility's anticipated impact on ambient concentration of PM2.5 falls below the NAAQS's current SIL for that contaminant. The SIL for annual PM2.5 when TCEQ approved _____________________

proviso to modify [beyond the subsection where it is found], it might have provided a section-wide [provision].").

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Texas LNG's permit was 0.2 μg/m³.⁷⁹It decreased to 0.13 μg/m³three months before TCEQ granted the third extension.⁸⁰The modeling analysis in Texas LNG's minor-source permit application predicted an annual PM2.5 concentration of 0.06 μg/m³, and its most recent analysis predicted 0.1 μg/m³—both well below the SIL for annual PM2.5 when the permit issued and now. In August 2025, on remand from the D.C. Circuit, FERC similarly assessed Texas LNG's most recent air-modeling analysis and affirmed the project's continued compliance with updated NAAQS.⁸¹ Moreover, Texas LNG's third extension application demonstrates its continued status as a minor source. It states (1) "there are no proposed or existing nonattainment designations" for the proposed site; (2) there are "no change[s] to the Prevention of Significant Deterioration (PSD)⁸²regulations or PSD applicability criteria," and (3) the "scope and design of the project remain as it was initially authorized." In other words, the project remains classified as a minor source due to low-emissions design features and is "not subject to federal nonattainment and PSD permitting requirements" for major sources. Even if the rules required Texas LNG to submit additional proof of NAAQS compliance to receive a third extension, there is substantial evidence in the record to support TCEQ's decision.

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79 EPA, Guidance on Significant Impact Levels for Ozone and Fine Particles in the Prevention of Significant Deterioration Permitting Program, at 15-16 (Apr. 17, 2018).

80 EPA, Supplement to the Guidance on Significant Impact Levels for Ozone and Fine Particles in the Prevention of Significant Deterioration Permitting Program, at 6 (Apr.

3 0, 2024).

81 Texas LNG Brownsville LLC, 192 FERC ¶ 61,170 at 36-37.

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Subsection 116.120(c) governs third extensions and plainly requires only two conditions. As "the evidence as a whole is such that reasonable minds could have [concluded]" Texas LNG received a litigation-related extension and satisfied the expenditure requirements, TCEQ did not err in denying STEJN's motion to overturn.⁸³Even applying the more rigorous standard urged by STEJN, we find substantial evidence in the record supports TCEQ's action.

IV

We conclude the executive director complied with the controlling requirements of section 116.120 and her approval of the third extension is supported by substantial evidence in the record. Accordingly, we DENY STEJN's petition for review.

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