The Sixth Circuit Court of Appeals has ruled that the U.S. Environmental Protection Agency (EPA) improperly determined that a natural gas plant and wells serving it were a single source under the Clean Air Act (CAA). Summit Petroleum Corp. v. EPA, Nos. 09-4348, 10-4572 (6th Cir. 8/7/12). The plant and wells occupied a total of 43 square miles, and EPA had determined that the wells were “adjacent” to the gas plant.
At issue was whether the natural gas operation constituted a major source requiring an operating permit under Title V of the CAA. EPA’s rules aggregate emissions as a single source if they are under common control, are located on one or more contiguous or adjacent properties and belong to the same major industrial grouping. All parties agreed that the processing plant’s and gas wells’ potential to emit regulated pollutants, considered separately, was each below the 100,000-ton level that would require operating permits. All parties also agreed that adding the potential emissions of the gas wells to those of the processing plant would cause the facility to exceed the major source threshold.
The same entity owned the plant and wells, and all fell under the same major industrial grouping. Because no gas well property shared a boundary with the gas plant (or with each other), all parties agreed they were not contiguous. EPA determined that they were adjacent, however, because of the interrelationship between the wells and the processing plant. The court found that the term “adjacent” as used in the regulations was not ambiguous, so that EPA’s interpretation did not require deference. Analyzing the facts before it, the court held that the wells and processing plant were not adjacent to each other. The court vacated EPA’s determination that the operations constituted a single source requiring an operating permit and remanded to the agency.