In a December 21, 2012 memorandum, EPA has instructed its regional air divisions that a recent 6th Circuit Court of Appeals decision limiting EPA to considering physical proximity (and not functional interrelatedness) in determining when to aggregate multiple pollutant-emitting activities should not be adhered to in other circuits. EPA’s regulations allow aggregation of multiple pollutant-emitting activities only if they meet certain criteria, including being located on contiguous or adjacent properties. EPA has previously interpreted adjacency to include the concept of functional interrelatedness. In the 6th Circuit case Summit Petroleum Corp. v. EPA, No. 09-4348 (6th Cir., Aug. 7, 2012), EPA applied this concept to determine that a natural gas sweetening plant and various sour gas production wells separately located within an area of approximately 43 square miles were “adjacent,” and therefore constituted a single source under the Clean Air Act’s Title V permitting program. The court vacated the determination, holding that EPA’s interpretation was inconsistent with the regulatory history of the adjacency criteria, EPA’s own prior guidance, and the unambiguous plain meaning of the term “adjacent” (which the court held only relates to physical proximity). The court remanded the case to EPA to “determine whether [the] sweetening plant and sour gas wells are sufficiently physically proximate to be considered ‘adjacent’ within the ordinary, i.e., physical and geographical, meaning of that requirement.” EPA’s December 21st memorandum instructs regional air divisions to continue considering functional interrelatedness outside of the 6th Circuit states of Michigan, Ohio, Tennessee, and Kentucky, and that EPA is continuing to assess how to implement the court’s decision for states within the 6th Circuit.
For additional information contact Joseph Brown.