USA – TEXAS Law and Practice Contributed by: Gerald J. Pels, Elizabeth E. Mack, Gerald D. Higdon, Susan Rainey, Elizabeth Corey and Brett A. Miller, Troutman Pepper Locke LLP
1. Regulatory Framework and Law 1.1 Environmental Protection Policies, Principles and Laws Environmental regulation in Texas is pervasive. Texas has been delegated authority to implement most major federal programmes, including the Clean Air Act, the Clean Water Act, and the Resource Conservation and Recovery Act. In many instances, however, Texas’ regulatory programmes contain unique state-specific requirements. For example, Texas’ Solid Waste Dis- posal Act (SWDA) goes beyond the liability framework for hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and extends to other solid wastes. In Texas, the Texas Commission on Environmen- tal Quality (TCEQ) oversees various environmental programs and regulations; however, certain environ- mental activities within the oil and gas industry fall under the jurisdiction of the Texas Railroad Commis- sion (RRC). A memorandum of understanding (MOU) exists between the two agencies, outlining the gen- eral divisions of jurisdiction over the environmental regulation of various oil and gas activities. The MOU resides in the Texas Administrative Code. Thus, when doing business in Texas, compliance considerations must go beyond mere compliance with federal pro- grammes. Texas’ regulatory programmes are prescriptive, and enforcement allows for assessment of per diem, per-violation penalties. In addition to federal and state environmental programmes, certain larger local jurisdictions, including Harris County and the cities of Houston and Dallas, have enacted robust envi- ronmental ordinances and have strong independent enforcement arms.
tory programmes involving the oil and gas industry. The MOU between TCEQ and RRC sets forth spe- cific requirements for oil and gas activities related to waste management, water quality, injection wells, and incident reporting within each agency’s respec- tive jurisdiction. Other Texas agencies have jurisdic- tion over specific programmes, including the Texas General Land Office (GLO), the Texas Parks and Wild- life Department (TPWD), and the Texas Department of State Health Services (DSHS). 2.2 Co-Operation Texas’ regulatory programmes are generally prescrip- tive in nature and its environmental agencies have active enforcement arms. Despite this, agency per- sonnel are generally available, knowledgeable, and open to discussing compliance issues in a blind or site-specific context. Moreover, Texas has implement- ed effective programmes that foster compliance. For example, the TCEQ promulgated rules creating what is known as the Voluntary Clean-up Programme or VCP. This programme allows parties to self-implement site clean-up under agency supervision, which, when complete, can afford immunity from clean-up liability to both the landowner and the transferee. A further example of co-operative compliance is the state’s Environmental, Health, and Safety Audit Privi- lege Act (Audit Act), pursuant to which a regulated entity can secure immunity for certain violations iden- tified by an environmental audit conducted in accord- ance with the Audit Act. Both the TCEQ and RRC administer the Audit Act. While certain exceptions exist, immunity can be con- ferred when disclosure and corrective actions are completed in a timely manner, provided disclosures are submitted via certified mail. To qualify, operators must submit a Notice of Audit (NOA) before evaluating the compliance of existing operations (and before any enforcement is initiated), as the Audit Act’s immunity only applies to violations discovered during an envi- ronmental audit conducted after filing the NOA. The audit must generally be completed within six months, and disclosures must be made promptly, with correc- tions generally made within six months of the disclo- sure. The Audit Act can also be used in connection
2. Enforcement Authorities and Mechanisms 2.1 Regulatory Authorities
Myriad agencies administer environmental regula- tion in Texas. The TCEQ has jurisdiction over most traditional environmental programmes. The RRC, however, administers certain environmental regula-
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