Court Hesitant to Push Aside Post-Summit Memo

A coalition of manufacturers, the National Environmental Development Association’s Clean Air Project (NEDACAP), has asked the D.C. Circuit Court to strike the United States Environmental Protection Agency’s (USEPA) memorandum regarding how it planned to address a decision by the Sixth Circuit Court of Appeals ruling striking the agency’s policy regarding how it would implement air emission source aggregation for purposes of permitting. 

Under the CAA, independent air emission sources can be aggregated and addressed as a singular source if (1) the sources in question come from the same SIC industrial code; (2) the sources fall under common ownership; and (3) the sources are located contiguous or adjacent to one another.  The application of the third prong of this inquiry is at the heart of the current dispute and is an ongoing policy question within USEPA.

The memorandum in question, which the USEPA’s director of the Office of Air Quality Planning and Standards sent to all the agency’s regional air division directors on Dec. 21, addressed the applicability of the Sixth Circuit’s ruling in Summit Petroleum Corp. v. EPA.

Summit had sued the USEPA after the agency found that Summit’s Michigan-based natural gas plant and wells constituted a single source of pollution and were therefore subject to stricter permitting standards under Title V of the Clean Air Act even though the wells were miles from the plant. Summit argued that the operations were not on “one or more adjacent properties” as required under Title V and should not be aggregated as one single source of air emissions.  USEPA disagreed stating that while the wells and the plant were not adjacent to one another, but for the wells, the gas processing facility in question would not exist and therefore USEPA found the sources to be operationally interdependent and the emissions from the wells and the plant must be aggregated as a single source under the agency’s definition of contiguous and adjacent.

The Sixth Circuit ruled that while the USEPA was entitled to “great deference” in interpreting its own regulations, the term “adjacent” was unambiguous and hence no deference was permissible. The appellate court foreclosed the USEPA from considering any factor other than physical or geographical distance in determining whether industrial facilities are adjacent for purposes of Title V or New Source Review analysis thus in essence striking USEPA’s interdependency policy.

The USEPA then sent the memo in question to its regional field offices saying the agency would follow the decision within the Sixth Circuit but not nationwide.  In fact, the memorandum explicitly stated that it would continue to consider evidence of interdependency in its analysis.  NEDACAP claims the directive conflicts with the Clean Air Act’s uniformity requirements by instructing regional offices to apply different permitting standards in different states.

USEPA has argued that nothing in the CAA requires it to apply the Sixth Circuit’s opinion as binding beyond that circuit, making its post-decision memorandum appropriate. Moreover, the memo has no legal effect and does not constitute a final agency action that can be reviewed by the court and since the coalition had no members impacted by an actual case or controversy, the matter was further not ripe for consideration by a court.

The case is National Environmental Development Association’s Clean Air Project v. U.S. Environmental Protection Agency, case number 13-1035, in the U.S. Court of Appeals for the District of Columbia.

Armando Benincasa concentrates his practice in the areas of energy law, environmental law, environmental litigation, administrative law, government affairs and lobbying. His practice consists of cases involving permitting and regulatory requirements for natural resources, including coal and oil and gas, solid waste, water resources, underground storage tanks, voluntary remediation, and the drafting of rules and statutes related to the environment.
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