On February 23, 2015, the District Court for the Middle District of Pennsylvania issued a decision in Citizens for Pennsylvania’s Future v. Ultra Resources, Inc., holding that eight compressor stations owned by Ultra Resources, Inc. (Ultra) in Pennsylvania did not constitute a “major emitting” source of nitrogen oxide (NOx) under the Clean Air Act or Pennsylvania’s New Source Review rules.

Any facility in Pennsylvania that emits, or has the potential to emit, 100 tons per year (TPY) of a pollutant must be classified as a major emitting source. Major emitting sources are subject to a more stringent permitting process than facilities that fall below the 100 TPY threshold. Each of the compressor stations at issue is individually far below the 100 TPY threshold for NOx. However, in the aggregate, the eight stations have the potential to exceed the threshold.

Emissions from separate facilities may be aggregated during the permitting process, in order to determine whether the separate facilities collectively constitute a major emitting source, when the facilities are located on adjacent and contiguous properties and owned and operated by the same person and under common control. In some instances, parties have also argued that when separate facilities are operationally interrelated, regulators should find that the separate facilities constitute a major emitting source, even if they are not physically adjacent.

Pennsylvania’s Future (PennFuture) alleged that Ultra’s eight compressor stations were adjacent and interrelated, and thus the Pennsylvania Department of Environmental Protection (DEP) should have determined that the compressor stations constituted a major emitting source. The court, however, disagreed and affirmed DEP’s decision that the emissions from the compressor stations should not have been aggregated and that the compressor stations did not constitute a major emitting source under the Clean Air Act or Pennsylvania law.

The court first evaluated whether it should consider the interrelated operations of separate facilities in addition to their physical location when determining whether or not they are adjacent. Relying upon a 2012 decision in the 6th Circuit, Summit Petroleum v. EPA, 690 F.3d 733 (6th Cir. 2012), and guidance promulgated by DEP after the Summit decision was released, the court held that the primary consideration should be the physical location of the facilities, stating “the plain meaning of ‘contiguous’ and ‘adjacent’ should control” such a determination. Notably however, the court declined to hold that functional interrelatedness “can never lead to, or contribute to, a finding of contiguousness or adjacency.”

In determining that the eight compressor stations are not adjacent, the court noted that the compressor stations are located miles from one another and are collectively situated in an area comprising approximately five square miles. DEP generally considers facilities adjacent when they are within one quarter mile of one another. Furthermore, the court stated that it was an undisputed fact that there is no operational relationship between the compressor stations. The stations are not connected by pipelines and do not rely on one another to function in any way. Thus, even considering PennFuture’s interrelatedness argument, the court could not find that the compressor stations are adjacent.

This decision may have implications beyond Pennsylvania, and possibly beyond whether separate facilities should be considered adjacent to one another. The cumulative impacts and emissions of projects, even those owned by separate companies, are often the focus of advocacy groups during the state and federal permitting processes of new facilities.