Permit Aggregation Ruling

For some time, U.S. EPA has considered the concepts of contiguous or adjacent, common control, and industrial groupings when determining whether emissions from multiple “sites” should be aggregated for air permitting purposes.  In a 2009 memo (“McCarthy Memo”) from U.S. EPA Administration agency air chief Gina McCarthy, the concept of “functional interrelatedness” was introduced as a significant consideration for permit writers when determining whether emissions should be aggregated.  U.S. EPA applied the functional relatedness test when determining that gas sweetening plants and related wells operated by Summit Petroleum were a single source for air permitting purposes. In Summit Petroleum Corp. v EPA et al., the 6^th Circuit ruled that physical proximity is the factor that determines if sites are “adjacent,” thereby negating U.S. EPA’s consideration of functional interrelatedness as a factor for single source determinations. 

In a December 2012 memo from U.S. EPA’s Office of Air Quality Planning and Standards, U.S. EPA opined that the 6^th Circuit decision in the Summit case applied only to Title V or New Source Review aggregation decisions under the jurisdiction of the 6^th Circuit (Michigan, Ohio, Tennessee, and Kentucky).  This memo established that U.S. EPA could and would use different criteria in different regions, specifically as it relates to the issue of “adjacent”.  Of course, given the complexities of the issue, the idea of differing criteria depending on geographical location did not sit well with the regulated community. 

On May 30, 2014 the U.S. Court of Appeals for the District of Columbia Circuit vacated U.S. EPA’s December 2012 memo that limited the non-inclusion of the functional interrelatedness consideration to only the area under the jurisdiction of the 6^th Circuit.  Absent further court action, this ruling means that U.S. EPA will no longer be able to use functional interrelatedness as a consideration for whether sites are considered adjacent for air permitting purposes.