On September 4, 2018, EPA released the latest in a series of policy documents addressing how air pollution sources determine whether their operations trigger requirements under the Clean Air Act (CAA). Specifically, EPA is clarifying how the term “adjacent” is defined for the determination of major source status.
The applicability of many CAA requirements is based on whether a “source” (which can and often does encompass multiple air emissions points) exceeds potential emission thresholds. The determination of the scope of a stationary source is referred to as a “source determination” and uses a three-factor test to establish the boundaries of a stationary source. The factors are: 

  1. Belong to the same industrial grouping;
  2. Are located on contiguous or adjacent properties; AND
  3. Are under the control of the same person (or persons under common control).

All three factors must be met for individual emission points to be aggregated into one stationary source. The total of the potential emissions from all of the emission points aggregated into the resulting stationary source is compared against various applicability thresholds, to determine which permitting and regulatory requirements apply.

EPA's draft guidance presents an interpretation of the term “adjacent” in the three-factor test that is consistent with the dictionary definition of the term, rather than adding a consideration of “functional interrelatedness” that had been used in some past EPA actions. (See Trinity's recent article on Major Source Determinations for a more in-depth review of the history of this subject.) The interpretation of “adjacent” is now proposed to be focused solely on physical proximity. EPA asserts that this is more in line with the intent expressed in the original development of the New Source Review permitting program, which established the precedent for other programs that followed, including Title V permitting and National Emission Standards for Hazardous Air Pollutants.

EPA recommends that permit authorities apply the proposed interpretation from this time forward. The agency also recommends that sources that have been aggregated in the past should continue to be considered one source as long as the other two prongs of the three-factor test (industrial grouping and common control) continue to be met. EPA clarifies that the 2016 source determination rulemaking specific to the oil and gas industry - which sets somewhat different criteria for determining whether points are contiguous and adjacent - remains in place. 

The proposed guidance emphasizes that state and local agencies with approved programs remain responsible for making source determinations, and are not required to apply the interpretation laid out in the policy. For industry, this means that working with your permit authority to determine how CAA requirements apply to your operations continues to be critical to ensure compliance.

EPA will accept public comment on the draft guidance until October 5, 2018; more information as well as a link to the text of the guidance is available at https://www.epa.gov/nsr/forms/interpreting-adjacent-source-determinations.