New Clean Air Act Interpretation May Affect Facility Air Permitting
Facilities required to have an EPA Title V air permit, New Source Review (NSR) air permit, or a Prevention of Significant Deterioration (PSD) air permit...
Facilities required to have an EPA Title V air permit, New Source Review (NSR) air permit, or a Prevention of Significant Deterioration (PSD) air permit may be affected by EPA’s new interpretation of “adjacent” properties.
⚡ TL;DR: The word “adjacent” determines whether your facility and its related properties require one combined air permit or separate permits. EPA just clarified this after years of court battles. For most industries, adjacency now means physical proximity only—not functional interrelatedness. This could lower permitting requirements for some facilities, but others may face consolidation into more stringent major source permits.
Adjacent Properties
In the regulations, the word “adjacent” determines whether a building, structure, facility, or installation must be under single control, belong to the same industrial grouping, and located on contiguous or adjacent properties. This definition affects permitting complexity and regulatory requirements.
EPA traditionally avoided defining how far apart properties could be and still be considered “adjacent,” instead evaluating adjacency on a case-by-case basis. For years, EPA used “functional interrelatedness”—operational and technical connections between facilities—to define adjacency even when properties were miles apart.
⚠️ The Pain: Uncertainty in permitting requirements creates legal exposure. A petroleum company operating pipelines and wells miles apart learned this the hard way. EPA insisted they were one adjacent source subject to major source permitting. The company sued and won—the court ruled “adjacent” means physical proximity only. But EPA refused to apply this uniformly, leading to multiple lawsuits and regional inconsistency. The confusion and litigation costs add up fast.
The New EPA Interpretation
EPA issued new draft guidance clarifying “adjacent” after years of legal battles. The new interpretation establishes:
For all industries except oil and gas production/processing, “adjacent” means physical proximity only. Functional interrelatedness no longer applies. Operations don’t need to share a border to be adjacent—they just need to be nearby. If there’s a “common sense notion of a plant,” they’re adjacent. Railways, pipelines, and other conveyances no longer factor into adjacency determinations.
The interpretation applies to new sources only. Operations already consolidated under one air permit stay consolidated as long as common control and industrial grouping criteria continue. States with approved permitting programs can choose not to adopt the new interpretation immediately, though EPA recommends it for consistency.
Does your facility operate multiple properties, rely on pipelines or rail conveyances, or have expansion plans? The adjacency determination affects whether you need one combined air permit (often major source) or separate permits for each location. Major source permits require continuous monitoring, annual compliance certifications, and higher enforcement risk. Separate permits simplify compliance but require more administrative overhead. Getting this wrong delays projects or forces expensive permit amendments. iSi helps facilities audit their current permitting structure against the new guidance and identify the most cost-effective compliance pathway.
Frequently Asked Questions
💰 Air permitting audits and adjacency determinations typically cost $2,500–$5,000 for multi-property facilities; permit amendment costs vary by jurisdiction but typically range $1,000–$3,000 if structural changes are needed.
Q: What is the difference between adjacent and contiguous properties for air permitting purposes?
Adjacent properties are those with physical proximity and do not require a common boundary, while contiguous properties must share a common border. Under EPA’s new interpretation, operations that are neighboring or side-by-side, where a “common sense notion of a plant” exists, are considered adjacent. Railroads and pipelines no longer determine adjacency between properties.
Q: How does the definition of adjacent affect air permitting requirements?
Facilities that are physically adjacent and under common control may be required to obtain a single combined EPA air permit (Title V, NSR, or PSD) rather than individual permits for each location. If EPA determines your properties are adjacent and functionally interrelated, you may face more stringent permitting requirements applicable to major sources rather than independent facilities.
Q: What is functional interrelatedness and does it still apply after the new EPA interpretation?
Functional interrelatedness refers to operational and technical connections between facilities, such as shared pipelines or integrated supply chains. EPA previously used functional interrelatedness to determine adjacency even for distant properties. Under the new interpretation, functional interrelatedness no longer applies; only physical proximity determines adjacency for most industries (oil and gas operations are exceptions).
Q: How does the new EPA adjacent interpretation affect existing permitted facilities?
The new interpretation applies only to new sources and newly permitted operations. Facilities already consolidated under one air permit will maintain that status if common control and industrial grouping criteria continue. States with approved permitting programs may choose not to immediately implement the new interpretation, though EPA recommends it for consistency.
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