UNITED STATES ENVIRONMENTAL PROTECTION AGENCY RESEARCH TRIANGLE PARK, NC 27711 

### DEC 

### 212012

OFFICE OF AIR QUALITY PLANNING AND STANDARDS 

### MEMORANDUM SUBJECT: FROM:

TO:**~---** . 

## - Applicability ofthe Summit Dec' 'onto EPA Title V and SR Source Determinations (-· Stephen D. Page, Director. Office ofAir Quality PI, Regional Air Division Directors, Regions 1-10 The purpose ofthis memo is to explainthe applicability ofthe decision by the 6th Circuit Court of Appeals to vacate and remand a title V applicability determination made by the EPA for Summit Petroleum's oil and gas operations in Michigan. In Summit, the EPA had decided that, under our existing source determination regulations, the oil and gas sweeteningplant and related wells owned and operatedby Summit Petroleum were a single stationary source for purposes ofthe Clear Air Act title V operatingpermitprogram. As a single source, the aggregate emissions from these operations were high enough to trigger the requirementto obtain a title V operating permit. Summit Petroleum then challenged that determination in the 6th Circuit, and the Court ultimately issued a decision that vacated and reversed our determination. SummitPetroleum Corp. v. EPA etal., Consolidated Case Nos. 09-4348 and 10-4572 (6th Cir. Aug. 7, 2012). The Court's majority decision concluded thatthe term "adjacent", as used in our regulations, was related only to physical proximity and, thus, found that our determination was improper, because we had considered the functional interrelatedness ofthe wells and sweetening plant in determining that they were "adjacent." The EPA sought rehearing ofthe Court's decision, but that request was denied. The EPAhas a longstanding practice ofinterpreting "adjacent" to include a consideration ofthe functional interrelatedness oftwo emission units, in addition to the physical distance betweenthem, in making source determinations in boththe title V and new source review (NSR) programs. Because of the Court's decision, however, the EPA may no longer consider interrelatedness in determining adjacency when making source determination decisions in its title V orN 

### R permitting decisions in areas under thejurisdiction ofthe 6th Circuit, i.e., Michigan, Ohio, Tem1essee and Kentucky. The EPA is still assessing howto implementthis decision in its permitting actions inthe 6111 Circujt. Outside the 6th Circuit, at this time, the EPA does not intend to change its longstandingpractice of considering interrelatedness in the EPApermitting actions in otherjurisdictions. In permitting actions occurring outside ofthe 6th Circuit, the EPA will continue to make source determinations on a case-bycase basis using the three factor test inthe NSR and title V regulations at 40 CFR 52.21(b)(6) and 71.2, respectively, and consistent with more than three decades ofthe EPA applicability determinations and guidance letters regarding application ofthose criteria, which have considered bothproximity and Internet Address (URL) • http://www.epa.gov Recycled/Recyclable • Printed wHh Vegetable Oil Based Inks on Recycled Paper (Minimum 25% Postconsurner)interrelatedness in determining whether emissionunits are adjacent. Thethree factor test considers emission-producing activities to constitute a single source ifthey are: ·

• under common control ofthe same person (or persons under common control); • located onone ormore contiguous or adjacentproperties; and • in a single majorindustrial grouping (the sametwo-digit SIC code). The EPA is assessing what additional actions may be necessaryto respond to the Court's decision. Please share this information with potential permitapplicants, as well as the state and local agencies in your Region. For any questions regardingthis guidance, please contactRaj Rao at rao.raj@epa.gov.

cc: Regional AirProgram Managers