The D.C. Circuit Court Rejects EPA Guidance on Source Aggregation

The D.C. Circuit Court of Appeals ruled upon a petition filed by an industry coalition which objected to the manner in which USEPA intended to implement the 6th Circuit Court of Appeals ruling in Summit Petroleum Corp. v. EPA in 2012 which found the agency’s policy regarding whether multiple sources of air emissions should be aggregated for purposes of permitting was inconsistent with the plain meaning of the statutory language contained in the Clean Air Act. 

Specifically, 6th Circuit stated that USEPA could no longer consider the functional interrelationship between two sources in determining whether the sources are located “contiguous” and “adjacent” to one another thus requiring that they be aggregated as one source.  Rather, the court emphasized that the language of the Clean Air Act was unambiguous and that USEPA was required to use the plain meaning of the terms contiguous and adjacent.  The court held that EPA couldn’t aggregate certain pollution sources — in that case, natural gas wells and a refinery — that were not geographically adjacent into a single stationary source for permitting under the Clean Air Act.

While USEPA decided not to appeal the court’s decision, in December 2012 it issued a guidance document to its regional offices giving instruction on how each would address the issue of source aggregation.  The guidance essentially stated that while USEPA could no longer consider functional “interrelationships” within the 6th Circuit in establishing “major sources” that require permits that specify emission limits, monitoring mandates and other requirements, outside the states contained with the 6th Circuit, USEPA dictated that there would be no change in policy and as a result created a situation where different aggregation standards and analysis would apply in the states of Michigan, Ohio, Kentucky and Tennessee, all states encompassed within the 6th Circuit’s jurisdiction, and the remainder of the nation.

The petition challenging the USEPA policy argued that the document put companies outside the 6th Circuit at a competitive disadvantage because they face more stringent permitting requirements.

The D.C. Circuit Court of Appeals agreed and held USEPA cannot treat pollution sources in one region differently from those in others because of an adversarial court ruling.  “We find no merit in EPA’s arguments,” Senior Judge Harry Edwards wrote. “The Summit Directive creates a standard that gives facilities located in the Sixth Circuit a competitive advantage. It therefore causes competitive injury to Petitioner’s members located outside the Sixth Circuit.”

Further, Edwards wrote on behalf of the unanimous three-judge panel that the memo is “plainly contrary to EPA’s own regulations, which require EPA to maintain national uniformity in measures implementing” the Clean Air Act.

EPA contended the coalition lacked standing, meaning it failed to show how it was directly harmed by the guidance memo. Further, the agency said the challengers failed to raise a concrete issue and that the Clean Air Act didn’t require EPA to act uniformly across the country in its permitting program.

The following link can be used to read the opinion in its entirety: Click here.

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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