PA Court Declines to Aggregate Separate Compressor Stations

A Pennsylvania Court recently considered whether a genuine issue of material fact exists as to whether the air contamination sources are “adjacent”, thereby rendering a natural gas operators compressor facilities ineligible for GP-5 (minor source) air permits and requiring the natural gas operator to meet heightened (major source) air emission permitting requirements. See, Citizens for Pennsylvania’s Future v. Ultra Resources, Inc., (M.D. Pa. Feb. 2015). Plaintiff Citizens for Pennsylvania’s Future (“PennFuture”) originally filed a citizen suit against Defendant Ultra Resources, Inc. (“Ultra”) for alleged violations of the Clean Air Act (“CAA”), 42 U.S.C. §§ 7401 et seq. PennFuture contended that Ultra built a major facility which produces nitrogen oxide (“NOx”) emissions without obtaining the appropriate nonattainment New Source Review (“NNSR”) permit under the state regulations contained in 25 Pa.Code 127(E). See, Citizens for Pennsylvania’s Future v. Ultra Resources, Inc., 898 F. Supp. 2d 741, 742 (M.D. Pa. 2012) (note prior litigation referenced for factual background). Ultra applied for and received several separate (minor source) permits (GP–5s) from the Pennsylvania Department of Environmental Protection (“PADEP”) for each of its compressor stations. In issuing these GP–5s, PADEP issued a permit to each compressor station as an individual NOx emitting facility instead of aggregating the facilities as a single source under one major source permit. Id. 

The air permit application review process requires consideration of whether the presence of other air emission sources necessitates treating these air emission sources as a single source. The federal Clean Air Act (CAA) regulations for Title V permitting programs define a major source as follows:

Major source means any stationary source (or any group of stationary sources that are located on one or more contiguous or adjacent properties, and are under common control of the same person (or persons under common control) belonging to a single major industrial grouping and that are described in paragraph (1), (2), or (3) of this definition. For the purposes of defining “major source,” a stationary source or group of stationary sources shall be considered part of a single industrial grouping if all of the pollutant emitting activities at such source or group of sources on contiguous or adjacent properties belong to the same Major Group (i.e., all have the same two-digit code) as described in the Standard Industrial Classification Manual, 1987.

40 CFR Part 70 §70.2. The aggregation of the emissions activities of two or more stationary sources is only appropriate if the sources meet all of the following criteria as found in the CAA regulations:

  1. The sources are located on one or more contiguous or adjacent properties;
  2. The sources are under the common control of the same person (or persons under common control); and
  3. The sources belong to a single major industrial grouping.

40 CFR Part 52. An analysis of source aggregation begins with the CAA and its three-prong test, and then if necessary, asks for further analysis with regard to whether aggregation of the sources would be in the best interests of the regulatory program even if the three-prong test contained in the CAA were satisfied. Because source determinations are made on a case-by-case basis, considering the specific facts of the situation, prior agency statements and source determinations related to oil and gas activities may be constructive, but are not determinative. The Court in Citizens for Pennsylvania’s Future v. Ultra Resources, Inc. considered whether a genuine issue of material fact existed as to whether the air contamination sources were “adjacent” and granted Defendant’s motion for summary judgment because, the compressors, all of which were located at least 0.78 miles from each other, were not “sufficiently close to, or near enough, each other to be considered adjacent.” See, Citizens for Pennsylvania’s Future v. Ultra Resources, Inc., (M.D. Pa. Feb. 2015).

Laura Goldfarb helps clients resolve their environmental policy, regulation, and enforcement problems. Prior to joining Steptoe & Johnson, Ms. Goldfarb was Assistant Counsel at the West Virginia Department of Environmental Protection, where she represented the agency in a variety of matters relating to the state's environmental programs, and drafted regulatory and statutory environmental provisions for the State of West Virginia.
 
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