Questioning The Business of Pollution Regulation

By: Duane Craig

It’s a good bet Texas has reasons other than self determination for having its own air quality implementation program and control over how environmental issues are regulated in the state. Those reasons come to light by analyzing its fee schedules for permitting the polluters to pollute, for inspecting their operations, for allowing them to do business in the state and for doing business on state owned properties.

As a line item in the 2010 Texas State Budget report, all licenses, fees, permits, fines and penalties equaled almost $7 billion in 2010. The oil and gas industry is a heavy polluter so besides fines and penalties, oil production and regulation taxes accounted for a little more than $1 billion in 2010. Then there is the natural gas production tax bringing in $725 million, the gas utility pipeline tax earning $14 million, a volatile chemical sales permit totaling $602,000, a few fuels transport taxes and oil and gas drilling permits at almost $9 million and oil and gas violations bringing in more than $4.6 million. Surface mining permits added another $1.5 million with air pollution control fees stacking up to $49 million. Then there are waste treatment inspection fees at $25.2 million, air pollution control fees of $49 million. Then there are all the oil and gas royalties Texas collects from oil companies with operations on state land which total more than $540 million.

Some people in Texas have wondered about the effectiveness of the Texas Commission on Environmental Quality when they see how deeply the money flows between it and polluters. At the TCEQ’s first legislative review held in December 2010, the agency was accused of “being too cozy with industry and ignoring public concerns,” and it was especially challenged to explain the approval of coal-fired power plant permits that had been recommended for denial by the state’s own administrative law judges, according to the article “TCEQ gets an earful from public,” 12/16/2010, Houston Chronicle.

What many people haven’t really grasped yet is that governments depend upon polluting industries for operating revenues. In a way, pollution is big business, supplying money for state payrolls and operations related to managing it. Perhaps though, there is a conflict of interest when a state regulates a business that it also receives royalties from, a situation that could lead to more lax regulation when it comes to the environment.