As reported in the 2012 fourth quarter issue of the Air Quality Letter, on Dec. 21, 2012, EPA issued a memorandum to all EPA Regional Air Division Directors advising that it did not intend to change its long-standing practice of considering the functional interrelatedness of sources to determine whether they are “adjacent” and therefore a single source in states outside the jurisdiction of the U.S. Sixth Circuit Court of Appeals (Michigan, Ohio, Tennessee and Kentucky fall under the jurisdiction of the Sixth Circuit). EPA’s memorandum known as the “Summit Directive” was issued in response to the Sixth Circuit’s Aug. 7, 2012 decision in Summit Petroleum Corp. v. EPA, 690 F. 3d 733 (6th Cir. Aug. 7, 2012).
As reported in the 2012 third quarter issue of the Air Quality Letter, the Sixth Circuit held that for purposes of determining whether a group of air emission sources constitute a single source under Clean Air Act Title V permitting requirements, the term “adjacent” relates only to physical proximity. The Summit Directive stated that EPA would continue to consider the functional interrelationship of sources in states other than Michigan, Ohio, Tennessee and Kentucky. In the Sixth Circuit states, EPA would only consider physical proximity as directed by the court.
The National Environmental Development Association’s Clean Air Project (NEDA/CAP) challenged the Summit Directive in the D.C. Circuit Court of Appeals, arguing that EPA’s policy subjected companies operating outside the Sixth Circuit to unfair and unequal treatment by establishing inconsistent permitting criteria and placing them at a competitive disadvantage. By doing so NEDA/CAP contended that EPA had violated the Clean Air Act and EPA’s own regulations which mandate “regional consistency” in the nationwide application of air permitting rules. The D.C. court agreed with NEDA/CAP in a unanimous ruling on May 30, 2014. The court vacated the Summit Directive finding that “EPA was obligated to respond to the Summit Petroleum ruling in a manner that eliminated regional inconsistency, not preserve it.”
The court noted the EPA had the alternative of rewriting its rules to require aggregation of sources when they are functionally interrelated rather than “adjacent.” It is unknown at this time whether EPA will pursue such a rulemaking. In the meantime it appears EPA will be required to use physical proximity as the basis for determining whether sources are adjacent in all states.