The EPA was told it must uphold its own standards of consistency across all Agency regions when determining if different sources may be treated as one source (i.e., aggregated) for the purposes of Clean Air Act (CAA) permitting. 

That’s the opinion of the U.S. Court of Appeals for the D.C. Circuit, which found that an Agency directive that responded to a decision by the U.S. Court of Appeals for the 6th Circuit is “plainly contrary to the EPA’s own regulations, which require EPA to maintain national uniformity in measures implementing the CAA, and to ‘identify and correct’ regional inconsistencies by ‘standardizing criteria, procedures, and policies.’” (National Environmental Development Association’s Clean Air Project v. EPA)

Functionally interrelated

The case involves EPA’s longstanding aggregation policy.  The policy states that emissions from two or more sources can be aggregated for the purpose of a single major source determination, and thus subject to Title V and New Source Review (NSR) permitting, if the sources are “functionally interrelated.”  In other words, the policy does not require that the sources be physically adjacent to be considered a single source even though EPA’s regulations specify that multiple polluting activities are considered a single stationary source if they are adjacent. 

But in a 2012 opinion (Summit Petroleum v. EPA), the 6th Circuit reversed an EPA determination that a natural gas plant and distant wells were one source for the purpose of Title V permitting.  The court stated that functional relatedness is contrary to the plain meaning of adjacent. 
Subsequently, the EPA issued its Summit directive, which indicated that the prohibition on using functional interrelatedness for major source determinations would apply only in the region subject to 6th Circuit jurisdiction and that the Agency and its regional offices should continue to apply the functional interrelatedness approach to aggregation and permitting in all other areas. 

An industry group appealed to the D.C. Circuit, stating that EPA’s directive violates the CAA by applying different permitting criteria in different parts of the country and also illegally placed facilities at a competitive disadvantage to those within the 6th Circuit’s jurisdiction.  The D.C. Circuit found merit in these claims and vacated the Summit directive.  The court limited itself to the consistency aspects of the case and did not rule on whether the directive contravenes the CAA.

Consistency regulations

The D.C. Circuit cites EPA’s Regional Consistency regulations at 40 CFR 56.3(a) and (b)], which state that it is EPA’s policy to “assure fair and uniform application by all Regional Offices of the criteria, procedures, and policies employed in implementing and enforcing the act; [and] provide mechanisms for identifying and correcting inconsistencies by standardizing criteria, procedures, and policies being employed by Regional Office employees in implementing and enforcing the act….”

The EPA argued that these regulations targeted particular aspects of the CAA that presented consistency problems, but they do not require that EPA officials maintain perfect uniformity in the application of criteria, procedures, and policies in implementing and enforcing the act.  Effectively, the Agency was saying that it was not violating its own regulations by issuing the directive. 

In support of this reading, the EPA pointed out that 40 CFR 56.4 requires the administrator to ensure uniform enforcement of Parts 51 and 58, which pertain to state implementation plans and air quality monitoring programs not at issue in this case.  Thus, according to the EPA, because the Summit directive did not violate these ‘specific regulatory obligations,’ the directive cannot be said to violate agency regulations. 

Other avenues available
The D.C. Circuit responded that references to Parts 51 and 58 “in no way dilute the broader ‘Regulatory Consistency’ mandates found in section 56.1, 56.2, 56.3, and 56.5, which are not limited to Parts 51 and 58.

“These regulations, taken together, strongly articulate EPA’s firm commitment to national uniformity in the application of its permitting rules,” said the court.  “And there is no indication that EPA intended to exempt variance created by a judicial decision.” 

The D.C. Circuit added that the EPA can take other avenues to support the intent of the Summit directive, including appealing the 6th Circuit’s opinion to the U.S. Supreme Court or revising its uniformity regulations to account for regional variances created by judicial decision or circuit splits. 

National Environmental Development Association’s Clean Air Project v. EPA