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The EPA is easing pollution rules — here’s how it’s affecting Texas

Texas doesn’t have a rule to capture escaping methane emissions from energy infrastructure. Photo via Getty Images

The first year of President Trump’s second term has seen an aggressive rollback of federal environmental protections, which advocacy groups fear will bring more pollution, higher health risks, and less information and power for Texas communities, especially in heavily industrial and urban areas.

Within Trump’s first 100 days in office, his new Environmental Protection Agency administrator, Lee Zeldin, announced a sweeping slate of 31 deregulatory actions. The list, which Zeldin called the agency’s “greatest day of deregulation,” targeted everything from soot standards and power plant pollution rules to the Endangerment Finding, the legal and scientific foundation that obligates the EPA to regulate climate-changing pollution under the Clean Air Act.

Since then, the agency froze research grants, shrank its workforce, and removed some references to climate change and environmental justice from its website — moves that environmental advocates say send a clear signal: the EPA’s new direction will come at the expense of public health.

Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club, said Texas is one of the states that feels EPA policy changes directly because the state has shown little interest in stepping up its environmental enforcement as the federal government scales back.

“If we were a state that was open to doing our own regulations there’d be less impact from these rollbacks,” Reed said. “But we’re not.”

“Now we have an EPA that isn’t interested in enforcing its own rules,” he added.

Richard Richter, a spokesperson at the state’s environmental agency, Texas Commission on Environmental Quality, said in a statement that the agency takes protecting public health and natural resources seriously and acts consistently and quickly to enforce federal and state environmental laws when they’re violated.

Methane rules put on pause

A major EPA move centers on methane, a potent greenhouse gas that traps heat far more efficiently than carbon dioxide over the short term. It accounts for roughly 16% of global greenhouse gas emissions and is a major driver of climate change. In the U.S., the largest source of methane emissions is the energy sector, especially in Texas, the nation’s top oil and gas producer.

In 2024, the Biden administration finalized long-anticipated rules requiring oil and gas operators to sharply reduce methane emissions from wells, pipelines, and storage facilities. The rule, developed with industry input, targeted leaks, equipment failures, and routine flaring, the burning off of excess natural gas at the wellhead.

Under the rule, operators would have been required to monitor emissions, inspect sites with gas-imaging cameras for leaks, and phase out routine flaring. States are required to come up with a plan to implement the rule, but Texas has yet to do so. Under Trump’s EPA, that deadline has been extended until January 2027 — an 18-month postponement.

Texas doesn’t have a rule to capture escaping methane emissions from energy infrastructure. Richter, the TCEQ spokesperson, said the agency continues to work toward developing the state plan.

Adrian Shelley, Texas director of the watchdog group Public Citizen, said the rule represented a rare moment of alignment between environmentalists and major oil and gas producers.

“I think the fossil fuel industry generally understood that this was the direction the planet and their industry was moving,” he said. Shelley said uniform EPA rules provided regulatory certainty for changes operators saw as inevitable.

Reed, the Sierra Club conservation director, said the delay of methane rules means Texas still has no plan to reduce emissions, while neighboring New Mexico already has imposed its own state methane emission rules that require the industry to detect and repair methane leaks and ban routine venting and flaring.

These regulations have cut methane emissions in the New Mexico portion of the Permian Basin — the oil-rich area that covers West Texas and southeast New Mexico — to half that of Texas, according to a recent data analysis by the Environmental Defense Fund. That’s despite New Mexico doubling production since 2020.

A retreat from soot standards

Fine particulate matter or PM 2.5, one of six pollutants regulated under the Clean Air Act, has been called by researchers the deadliest form of air pollution.

In 2024, the EPA under President Biden strengthened air rules for particulate matter by lowering the annual limit from 12 to 9 micrograms per cubic meter. It was the first update since 2012 and one of the most ambitious pieces of Biden’s environmental agenda, driven by mounting evidence that particulate pollution is linked to premature death, heart disease, asthma, and other respiratory illnesses.

After the rule was issued, 24 Republican-led states, including Kentucky and West Virginia, sued to revert to the weaker standard. Texas filed a separate suit asking to block the rule’s recent expansion.

State agencies are responsible for enforcing the federal standards. The TCEQ is charged with creating a list of counties that exceed the federal standard and submitting those recommendations to Gov. Greg Abbott, who then finalizes the designations and submits them to the EPA.

Under the 9 microgram standard, parts of Texas, including Dallas, Harris (which includes Houston), Tarrant (Fort Worth), and Bowie (Texarkana) counties, were in the process of being designated nonattainment areas — which, when finalized, would trigger a legal requirement for the state to develop a plan to clean up the air.

That process stalled after Trump returned to office. Gov. Greg Abbott submitted his designations to EPA last February, but EPA has not yet acted on his designations, according to Richter, the TCEQ spokesperson.

In a court filing last year, the Trump EPA asked a federal appeals court to vacate the stricter standard, bypassing the traditional notice and comment administrative process.

For now, the rule technically remains in effect, but environmental advocates say the EPA’s retreat undermines enforcement of the rule and signals to polluters that it may be short-lived.

Shelley, with Public Citizen, believes the PM2.5 rule would have delivered the greatest health benefit of any EPA regulation affecting Texas, particularly through reductions in diesel pollution from trucks.

“I still hold out hope that it will come back,” he said.

Unraveling the climate framework

Beyond individual pollutants, the Trump EPA has moved to dismantle the federal architecture for addressing climate change.

Among the proposals is eliminating the Greenhouse Gas Reporting Program, which requires power plants, refineries, and oil and gas suppliers to report annual emissions. The proposal has drawn opposition from both environmental groups and industry, which relies on the data for planning and compliance.

Colin Leyden, Texas state director and energy lead at the nonprofit Environmental Defense Fund, said eliminating the program could hurt Texas industry. If methane emissions are no longer reported, then buyers and investors of natural gas, for example, won’t have an official way to measure how much methane pollution is associated with that gas, according to Leyden. That makes it harder to judge how “clean” or “climate-friendly” the product is, which international buyers are increasingly demanding.

“This isn’t just bad for the planet,” he said. “It makes the Texas industry less competitive.”

The administration also proposed last year rescinding the Endangerment Finding, issued in 2009, which obligates the EPA to regulate climate pollution. Most recently, the EPA said it will stop calculating how much money is saved in health care costs as a result of air pollution regulations that curb particulate matter 2.5 and ozone, a component of smog. Both can cause respiratory and health problems.

Leyden said tallying up the dollar value of lives saved when evaluating pollution rules is a foundational principle of the EPA since its creation.

“That really erodes the basic idea that (the EPA) protects health and safety and the environment,” he said.

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This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.

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A View From HETI

Exxon Mobil and Chevron made big profits in spring 2026. Photo via Chevron

American oil and gas giants raked in massive spring profits while fighting between Iran and the U.S. impeded petroleum shipments and consumers around the world paid more for fuel and confronted shortages.

The conflict, now in its sixth month, halted most shipping through the Strait of Hormuz, a narrow waterway that previously served as a delivery route for a fifth of the world's oil and natural gas. With global supplies constrained, prices for Brent crude, the international standard, soared from about $70 to above $100 a barrel for much of March, April and May, and at one point reached $126.

The money that oil companies accrued between the beginning of April and the end of June could receive extra scrutiny this year. Gasoline, diesel and jet fuel prices climbed sharply during that period, increasing costs for drivers and airline passengers. Supplies ran low in some countries, leading to sporadic fuel rationing in Australia and government office closures in Nepal and Sri Lanka.

Spring, Texas-based Exxon Mobil reported that its second quarter profits doubled to $14.53 billion, boosted by record diesel production. The oil giant brought in $116.02 billion in revenue, up 42%.

Chevron, based in Houston, nearly quadrupled its profits to $12.07 billion and revenue jumped 56% to $70.06 billion.

Six of Europe’s largest oil companies posted combined first-quarter profits of $22 billion, more than 40% higher than last year.

“There are constituencies around the world who are having a very good crisis, and the oil producers are one of them,” said Patrick Galey, fossil fuels lead at Global Witness, a nonprofit organization that investigates environmental issues. “When you compare that to the hundreds of millions of people who are struggling with rolling blackouts, with electricity curbs, rationing, waiting in line for food queues, or the disruption to fertilizers and the potential impact that that has on food prices, we don’t think that it’s a justifiable price for the rest of the world to be paying.”

Lawmakers propose taxing major oil producers for war windfalls

Energy companies such as Exxon and Chevron do not set the price of American oil, which ricocheted from $68 to $115 a barrel during the quarter. It’s driven by supply and demand, and what traders, refiners and other buyers are willing to pay.

Nevertheless, Democrats in Congress introduced bills in March to tax major oil producers for profits they show from 2026 onward and have the tax proceeds redistributed to consumers.

“It’s fair to put a windfall profits tax on inordinate windfall profits rather than cut off children’s food programs,” Sen. Sheldon Whitehouse, a Rhode Island Democrat who introduced the Senate version of the legislation.

Whitehouse's measure and a companion bill introduced by U.S. Rep. Ro Khanna of California would amend the U.S. tax code to impose a per-barrel tax on companies that produced or imported at least 300,000 barrels of oil per day in 2025.

“We cracked $4 again per gallon last weekend in gas stations that I drove by, and that’s a big expense, particularly for families that get their income from driving around from job to job in the work van or the work truck,” Whitehouse said.

The average price for a gallon of regular gasoline in the U.S., which was below $3 before the U.S. and Israel launched attacks on Iran, reached $4.11 Friday, July 31, about $1 more than last year at this time.

The UK and other European countries implemented temporary windfall profits taxes on fossil fuel companies in 2022. The UK extended that to 2030, according to Tax Foundation Europe.

“Penalizing the businesses who stood by those countries and provided that product going forward is very short-sighted,” Exxon CEO Darren Woods said in a call with investors Friday. “We canceled investments that we had planned for Europe based on the last time they passed a windfall profits tax.”

Refineries rake in cash while consumers pay more for fuel

Outfits such as Exxon and Chevron, which also own refineries, are in the best position to profit from the current market conditions, said Tom Seng, assistant professor of energy finance at Texas Christian University.

Refineries turn oil into gasoline, diesel, jet fuel and home heating oil. Higher prices for those products meant Chevron’s quarterly refinery profit was six times as big in 2026, despite processing less crude and selling less products.

“The return on refining, on a percentage basis, has skyrocketed,” Seng said. “Oil right now is priced what it is priced because of the Iran war. But in the meantime, the refineries are making money hand over fist.”

The global refining market is under-supplied, and with countries such as Russia and China no longer exporting, companies like Exxon and Chevron have to pick it up, said Rob Thummel, senior portfolio manager at Tortoise Capital. “The world is going to be short jet fuel, diesel and gasoline, so we’ll probably continue to see higher profits there.”

Globally, not all refineries have been able to get the supply of crude oil they need to meet demand since the conflict began, said Timothy Fitzgerald, a University of Tennessee professor of business economics who studies the petroleum industry.

As a result, refineries that have ample oil to work with, including those in the U.S., are turning high profits, particularly when they make jet fuel and diesel, which is priced about 41% higher in the U.S. than before the Strait of Hormuz was blocked.

"If you’re a company that owns a bunch of refinery capacity, things look pretty good," Fitzgerald said.

American refineries are running at near-full capacity and poised to benefit because some refineries in the Middle East and Russia were damaged. And Asia can't get the amount of Middle East oil needed for refining.

“Ultimately, users of the energy services pay,” Fitzgerald said. “Consumers, people like you and me buying retail motor gasoline or diesel fuel or airplane tickets. But it also means that almost everything else we buy has an embedded energy content to it ... and this is where you start to worry about it driving increases in costs.”

Not all oil and gas companies benefit in the same way

In the present geopolitical environment, some companies are winners while others are losers, Fitzgerald said.

“If you’re a company like a U.S. (oil) producer, even a U.S.-based international company like an Exxon or Chevron who’s got lots of production outside the Gulf, things are good. You’re selling your product at a higher price,” he said.

But companies in the Middle East that are not able to benefit from higher prices because they are struggling to get their liquefied natural gas out of the Persian Gulf or have a lot of damaged oil fields or processing facilities have a very different take on recent events, Fitzgerald added.

“Your ability to sell anything and the volume that you may be getting out is so curtailed that your revenues are way down and you’re incurring higher transportation costs and security costs,” he said.

Exxon and Chevron weren’t as profitable in the first quarter due to the way oil is traded; the first real opportunity they had to take advantage of higher prices oil was in April. Companies that had a lot of oil stored in floating tankers and available for spot-market trading, including some European ones, were able to benefit from March’s higher oil prices, Seng said.

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