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Pennsylvania Loosening Single Source Definition

The Pennsylvania Department of Environmental Protection (DEP) wants to ease up on the way related sources of air emissions from industrial operations, including Marcellus Shale developments, are grouped together for regulatory purposes.

The DEP released a technical guidance on these single source or "air aggregation" determinations for review on Wednesday and is taking comments through Nov. 21.

The complex process helps regulators decide whether to group several sources of air emissions and impose stricter permitting requirements if the emissions from those aggregated facilities hit thresholds that any single facility doesn't on its own.

The guidance takes a literal approach to existing law, which says separate sources of emissions must be "contiguous or adjacent" to be combined. The DEP believes those words define "the distance or spatial relationships between locations."

"Over time, there was a tendency by some regulators to morph the meaning of 'contiguous' or 'adjacent' properties to mean only that operations on the properties be 'interdependent,'" DEP Secretary Michael Krancer said, adding that this expanded definition isn't supported by case law or existing state and federal regulations.

West Virginia regulators recently affirmed this "spatial" definition in a case involving a subsidiary of Chesapeake Energy Corp., and Texas, Oklahoma and Louisiana all use a quarter-mile baseline to define "contiguous or adjacent."

"Every case remains, as it always has, unique, with its own facts and circumstance," Krancer said. "The single source determination test will continue to be applied on a case-by-case basis, depending on the facts of each particular case."

The previous guidance came in a December 2010 policy document that Pennsylvania Gov. Tom Corbett rescinded in February, shortly after taking office (see Shale Daily, March 3, March 1). That decision provided the administration one of its first Marcellus-related controversies, and angered some environmental groups that felt the state shouldn't limit its ability to aggregate.

"In some cases that may not be appropriate, but at least the original ruling gave DEP the ability to look at that and decide if it was appropriate," Jan Jarrett, CEO of Citizens for Pennsylvania's Future, told NGI's Shale Daily at the time.

The DEP plans to begin implementing the technical guidance on an interim basis now, while it collects and considers public comments on the proposed decision.

That could have a major impact on planned oil and gas facilities in Pennsylvania.

As the DEP crafted its 2010 policy, the Marcellus Shale Coalition (MSC) noted that "the vast major of the MSC's members facilities are not, and will not be, 'contiguous or adjacent' within the plain meaning of those terms," and aggregating sources based on interconnection, such as by pipelines, "is a serious misapplication" of policy.

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