The United States Environmental Protection Agency (EPA) is set to issue its final rule establishing for the first time by regulation the standard by which emissions from separate sources in the oil and gas sector are aggregated under the Clean Air Act (the Aggregation Rule). On April 7, 2016, EPA sent the final rule to the White House Office of Management and Budget (OMB) for review. The regulation will likely become effective in June 2016 after OMB completes its review.
As we previously reported, in the proposed Aggregation Rule, EPA offered two distinct approaches to determining whether physically separate emission sources should be aggregated (i.e., combined) to determine permitting obligations under the Clean Air Act. Under the rule, sources found to be “adjacent” to one other would be subject to aggregation. EPA’s preferred approach proposed to aggregate sources purely on their physical proximity, including a presumption that sources located less than a quarter-mile apart constitute a single source. EPA also set out an alternative, which is based on whether sources are “exclusively functionally interrelated.” Under the alternative approach, EPA proposed to base adjacency — and, thus, aggregation — on whether sources were operationally dependent on one another.
There is no indication as of yet which approach EPA adopted in its final Aggregation Rule now before the OMB. We will provide updates on the rule should any developments occur.