As mentioned earlier, I recently dedicated my monthly column for the The Legal Intelligencer/Pennsylvania Law Weekly to an examination of two Pennsylvania Environmental Hearing Board appeals which address aggregation of air emission sources under the Clean Air Act and the Pennsylvania Air Pollution Control Act. 

This week the Pennsylvania Department of Environmental Protection (PADEP) has issued draft technical guidance on this issue.  PADEP’s draft guidance addresses how to determine when two operations in the oil and gas business constitute a single "source" for purposes of regulation under the federal and state air statutes.  Sources that emit more than a threshold amount of a pollutant (typically 250 tons/year for each pollutant) are subject to a somewhat onerous permitting requirement before being constructed or modified (that is, nonattainment new source review or Prevention of Significant Deterioration new  source review). 

The draft guidance interprets longstanding (but confusing) federal requirements that apply a three part test:  two well pads, compressor stations, or processing plants constitute a single "source" if (a) they are in the same industry, (b) they are under common control, and (c) they are "contiguous" or "adjacent."  The PADEP guidance focuses (properly) on whether two facilities in the natural gas industry under control of the same or  related entities are "contiguous" or "adjacent."  PADEP will not generally "daisy chain" facilities along a gathering system, nor will it allow the pipelines to establish contiguity.  It will consider surface facilities as a single source if they are within a quarter-mile and more distant facilities as a single source on a case-by-case basis.