The fight has gotten so ugly that the EPA took the unprecedented step this month of announcing it will directly issue greenhouse gas permits to Texas industries beginning in January after the state openly refused to comply with new federal regulations.
"Emissions are too high, the emissions are too toxic and Texas water is being harmed," said EPA regional director, Al Armendariz.
The EPA is "putting politics ahead of the environmental issues," said Bryan Shaw, chairman of the Texas Commission on Environmental Quality.
Texas and the EPA have disagreed for years over pollution regulation, but the hostility intensified recently with Republican Gov. Rick Perry accusing the EPA and the Obama administration of overstepping boundaries and meddling in states' rights. With a more conservative state Legislature about to convene next year, there's appetite to keep up that fight.
The EPA, meanwhile, by flexing its muscles in Texas, may be able to send a message to other states that the days when the agency allowed contentious issues to languish unresolved have ended. Other states have had their differences with the EPA, and at least a dozen have come together in a lawsuit -- along with Texas -- challenging new greenhouse gas regulations.
All are taking steps in the meantime to comply. Except Texas.
The U.S. Court of Appeals for the Fifth Circuit on Wednesday declined to issue a stay that would delay the EPA's plans as Texas' lawsuit against the federal agency moves forward.
A spokeswoman for Perry said he was disappointed with the court's ruling but confident that the state will prevail "in the end."
About 200 Texas facilities continue to operate with air and water permits that are either out of date or have been disapproved by the EPA. The agency believes they are releasing a variety of metals and chemicals into the air and water that would, under the new regulations, no longer be permitted.
A main point of contention has been the state's flexible permit program, which sets a general limit on how much air pollution an entire facility can release. The issue exploded under the EPA leadership appointed by President Barack Obama, which formally disapproved Texas' flexible permits, saying they were too lenient. The state challenged the move in court, and the EPA began working directly with some companies on new permits.
The EPA accuses Texas' flexible permits of allowing Shell's Deer Park refinery to emit nearly double the amount of sulfur dioxide than would be permissible if it had a federally acceptable permit. ExxonMobil in Baytown emits double the levels of volatile organic compounds, such as benzene, than a federal permit would allow, according to the EPA.
Texas and the companies deny the allegations, insisting the companies comply with the emission limits set in their permits and are in line with federal guidelines.
The EPA and Texas have also been at odds over water permits. The EPA this month demanded in an unusual public statement that Texas work to reissue 80 expired permits designed to ensure wastewater plants and industrial facilities remove toxins before dumping water. The state says it has submitted much of the paperwork to the federal agency, which says they are not strict enough.
"These permits that EPA has not approved would have more stringent requirements," Shaw said. "The delay is reducing our ability to continue to make the environmental progress we've been making in the past years."
Earlier this month, the EPA also took on the Railroad Commission, the Texas agency that regulates the oil and gas industry, and accused it of not moving fast enough after having found evidence that methane had leaked into residential water wells. The federal agency ordered the gas driller to provide affected families with clean drinking water and determine how to stop the problem.
Industry, meanwhile, finds itself in a Catch-22. While it doesn't favor the EPA's more stringent regulations, it also isn't pleased with the ongoing battle because it creates uncertainty.
Some industries in Texas have chosen to deal directly with the EPA, which says it's working with about two-thirds of the largest facilities to get them new flexible permits.
The American Petroleum Industry, a Washington-based lobbying group that represents more than 450 oil and natural gas companies, believes the battle is hurting business. It called the EPA's most recent move to take over greenhouse gas permitting in Texas "coercive."
"The administration's focus should be job creation and economic recovery, not unnecessary and burdensome regulations that will threaten jobs and create a drag on business efforts to invest, expand and put people back to work," Howard Felman, API's director of regulatory and scientific affairs, said in a statement.
Texas says it has wed environmental law so successfully with an industry-friendly economy that the EPA and other states could learn from it.
"The existing permits in Texas have helped our state achieve dramatic improvements in air quality and we believe they will ultimately be upheld in the courts," Perry's office said in a statement. "In their latest crusade, the EPA has created massive job-crushing uncertainty for Texas companies."
But Matt Tejada, executive director of the environmental group Air Alliance Houston, said Texas politicians are "trying to make a name for themselves by taking the EPA behind the shed and beating them up" as a way to improve their anti-Washington credentials.
"It's a soup of toxic chemicals," said Neil Carman, a Sierra Club scientist and former Texas environmental regulator.