Posted on September 13, 2012 by Theodore Garrett
One company may own a variety of “functionally related” facilities that are located on various contiguous and non-contiguous parcels of land, spread out over many square miles. May all those “functionally related” facilities be considered “adjacent” and thus deemed to be one single major stationary source for Clean Air Act Title V permitting purposes?
A Court of Appeals recently weighed in on this issue. On August 7, 2012, the Sixth Circuit vacated EPA’s determination that Summit Petroleum Corporation’s natural gas sweetening plant and gas production wells located in a 43-square mile area near the plant were “adjacent” and thus could be aggregated to determine whether they are a single major stationary source for Title V permit purposes. Summit Petroleum Corp. v. EPA, 2012 WL 3181429 (6th Cir., Aug. 7, 2012). The majority held that EPA’s position that “functionally related” facilities can be considered adjacent is contrary to the plain meaning of the term “adjacent,” which implies a physical and geographical relationship rather than a functional relationship. The court also found EPA’s interpretation to be inconsistent with the regulatory history of Title V and prior EPA guidance. The case was remanded to EPA for a reassessment with the instruction that Summit’s activities can be aggregated “only if they are located on physically contiguous or adjacent properties.”