Talking TERP– The Texas Approach to Clean Air (Part 1) #SIPS #TERP

Texas is home to many unique things – from the iconic Cadillac Ranch in Amarillo to the Eiffel Tower in Paris (Texas), we tend to do things a little differently from the rest of the country.

The same is true with how the state has decided to deal with an air pollution problem that was affecting many areas in the state years ago. Instead of requiring specific actions from businesses and others whose operations create air pollution, our business-friendly state took another tactic – we created a voluntary incentive program to pay for emission reductions.

It’s called the Texas Emissions Reductions Plan – or TERP for short. And it has worked surprisingly well.

By “paying” for emission reductions, like those from diesel engines and equipment, Texas has been able to reduce one of the harmful pollutants that create smog (formally known as ground-level ozone) by more than 172,000 tons. That’s equivalent to the weight of 4,300 fully-loaded long-haul semi-trucks.

Back in 2001, when TERP was created, dangerous levels of ground-level ozone pollution contributed to a public health concern across several Texas cities. For example, Houston had experienced 79 days and Dallas-Fort Worth saw 74 days of unhealthy (or very unhealthy) air, based on the U.S. Environmental Protection Agency’s (EPA) Air Quality Index.

In comparison, Houston experienced 42 bad air quality days last year, and Dallas-Fort Worth logged 44 days. That’s undisputable improvement, and we can thank TERP for its role in this progress.

Smog 101

Smog is another name for ozone that occurs at ground level. Ozone in the atmosphere helps protect earth from harmful ultraviolet radiation, but when it develops where people breathe, it can exacerbate life-threatening diseases like asthma and chronic obstructive pulmonary disorder (COPD). It’s also one of the six air pollutants for which EPA has created a health-based air quality standard.

You can think about the creation of ground-level ozone as a recipe with three key ingredients:

1. Nitrogen oxides (NOx) — common sources include engine combustion from vehicles and equipment, as well as industrial processes and fires.
2. Volatile organic compounds (VOCs) — common sources include chemical solvents and gasoline vapors.
3. Sunlight — sunny days with little wind tend to be most problematic because they provide perfect conditions for creation of ground level ozone from NOx and VOCs, resulting in bad air quality days.

Here in Texas, we can’t do too much about our hot, sunny weather, but we can address NOx and VOC emissions. It turns out that so-called “mobile sources” like vehicles and equipment contribute more to NOx emissions, while other sources like industrial facilities, oil/gas production, and even some trees, contribute to VOC emissions. In theory, targeting reductions in both of the key ingredients for ozone formation should solve Texas’ unhealthy air problems, but it’s been a challenging issue because of the number of sources.

Is it easier to control fewer large sources or many small sources?

It turns out that VOC emissions associated with manmade activities have been somewhat easier to address because a major source of these emissions, industrial facilities, is already subject to permitting requirements that can be strengthened to include improved processes and control technologies currently available. On the other hand, NOx emissions from cars, trucks, and equipment are much more difficult to address, since there are hundreds of thousands of these sources in Texas. Moreover, regulation of mobile emission sources has primarily been the role of the federal government (this way, we don’t have engine and vehicle manufacturers having to work with fifty different states to make sure they pass emissions regulations).

So, how did Texas handle this conundrum?

Lawmakers created TERP as a voluntary program to incentivize fleet turnover to cleaner, less polluting vehicles and equipment. This strategy recognized that older heavy-duty vehicles and equipment, especially those powered by diesel engines, often have lifetimes measured in decades. The engines powering these vehicles and equipment can be disproportionate emitters (that is, they emit much more NOx than you might expect) because of their high horsepower, age (engines have become much cleaner in recent years, but diesel engines can run reliably for a long time), and high usage (Texas’ thriving economy runs on heavy-duty vehicles and equipment, from building new facilities to transporting consumer goods).

It’s notable to consider what Texas lawmakers accomplished with TERP:

• Important Role in Texas State Implementation Plans, or SIPS — For areas that are not meeting federal health-based standards for pollutants like ozone, states can create their own State Implementation Plans (SIPS) in order to implement actions that show they will meet the standard by a specific deadline, or they can have the federal government do it for them through Federal Implementation Plans (FIPS). Generally, states prefer to use SIPS. In 2001, Texas was faced with developing SIPs for areas that did not meet air quality standards for ground-level ozone (including Houston-Galveston-Brazoria and Dallas-Fort Worth areas). These SIPs had to be approved by EPA, so If EPA did not feel that Texas was implementing robust actions that would result in improved air quality, EPA could have disapproved the Texas plan and stepped in with a FIP. (This has happened in the past.) TERP, however, has been used by the state of Texas to show EPA that efforts are being made to voluntarily reduce emissions from mobile sources as part of the state’s various SIPs, which have then been approved by EPA. This approach also avoided having to use mandatory restrictions for diesel equipment, which was also an option the state was considering to meet air quality goals.
• Continuing Eligibility for Federal Highway Funding — The Federal Highway Administration provides significant funding for Texas to build roads (more than $3.7 billion expected each year from 2016 to 2020). Under what’s known as transportation conformity, if an area is not meeting air quality goals, federal funding may be at risk. TERP has played an important role as one of the transportation emission reduction measures used by areas in our state required to meet conformity requirements, helping to ensure federal funding continues to come to Texas.

Fifteen years after its creation, TERP continues to play an important role in air quality for several areas in Texas. Even though air quality in the Houston-Galveston-Brazoria and Dallas-Fort Worth regions has improved, the work is not over. Moreover, San Antonio will likely join Houston, Dallas-Fort Worth, and El Paso as regions not meeting health-based standards for ozone in the coming year. TERP will continue to play a critical role in Texas’ clean air strategy.

In the second half of our TERP Talks series, we’ll take a look at the numbers and evaluate how well Texas taxpayers are doing with their investment in clean air.

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