Union Carbide Corp. has convinced the Environmental Protection Agency that it should not be required to install $3.5 million in pollution control equipment in Texas City, Tex., because the company closed an obsolete facility in the area four years ago.

Union Carbide's proposal, adopted by EPA in May, was the first use of the newly expanded and potentially controversial "shutdown" provision of the "air bubble" policy, under which credits for eliminating or abating a pollution source can be used to increase the permissible level of pollution from another source. Other companies are seeking approvals similar to the one won by Union Carbide.

The air bubble, a Carter administration creation, was intended to encourage innovation in air pollution control. Under the original policy, announced in December, 1979, an imaginary bubble is placed over a facility. Instead of regulating the emissions coming from each smokestack or other individual pollution source, the EPA regulates the overall air quality within the bubble.

Thus, if a company cuts pollutants from one source, it is given "credit" for that reduction, which it can use legally to maintain higher levels of pollution elsewhere within the bubble.

One way to get credits from the Carter EPA was to close a polluting facility, but those credits had to be applied at the time of closure against pollutants from a replacement facility. The Reagan EPA, in its revised air bubble policy announced in April, expanded that concept by removing the time of closure restrictions.

David Doniger, an attorney with the Natural Resources Defense Council, said this use of the air bubble concept will not protect air quality, as EPA has claimed, and could could seriously set back efforts to cut air pollution.

John F. Erdmann, environmental protection coordinator for Union Carbide's Texas City petrochemical facility, said in a telephone interview that he believes EPA's new shutdown plan will protect the environment.

Union Carbide has 29 tanks at its Texas City facility which are used for storing synthetic organic chemical compounds. Those tanks exceed federal air pollution standards.

In 1972 Union Carbide got an exemption from the state because emissions from the tanks were thought to have a minimal effect on ozone and its first cousin, smog. However, thinking on synthetic organic compound emissions changed and, in 1979, EPA forced states to regulate them.

So Union Carbide lost its exemption and was told the tanks had to meet air pollution limits by 1981. The company drew plans for meeting the standards. "We did everything but buy the equipment," which would have cost about $3.5 million, Erdmann said.

Then at the end of 1979, the Carter EPA came along with its bubble policy. Union Carbide put together a plan, hoping to get credit for a low density polyethylene process plant it had closed in 1978, a year earlier. The plant, built in the late 1940s, was used in producing materials for items such as garbage bags and garment bags. The "technology was obsolete. We had found better ways to do things," Erdmann said.

Union Carbide's plan was sent to the EPA in October, 1980, but was never acted on. The proposal was revived last summer and drew favorable comments from the Reagan EPA, according to Erdmann. However, it was decided the plan could not be allowed under the then-existing air bubble policy.

In April, when EPA rewrote and expanded the bubble policy, it was changed to allow approval of plans such as the one proposed by Union Carbide.

Because the closed plant emitted about 240 tons per year of pollutants and Union Carbide was required to eliminate 217 tons per year from the tanks, Erdmann said. "We feel we provided them EPA with a far better answer." Erdmann added that the pollutants from the closed plant were much worse than the ones coming from the tanks.

According to a notice in last Wednesday's Federal Register, Monsanto Chemical Intermediates Co. facilities in Texas City and Chocolate Bayou hopes to get approval for an arrangement similar to Union Carbide's.

Monsanto has eight tanks in Chocolate Bayou and 10 tanks in Texas City holding synthetic organic compounds. At the Texas City plant, Monsanto wants credit for the reduction in pollution which occurred when it closed an ethylene unit in May, 1980.

EPA said it would give Monsanto the shutdown credit Aug. 23, under a streamlined approval process, unless it receives public comments within 30 days. The NRDC plans to protest the plan, according to Doniger.