Contiguous or Adjacent Properties in the Oil and Natural Gas Sector

LAC 33:III.502.A defines a “major source” as “any stationary source or any group of stationary sources that are located on one or more contiguous or adjacent properties, that are under common control of the same person (or persons under common control),” and that emits or has the potential to emit regulated air pollutants above certain thresholds.

LAC 33:III.504.K (Nonattainment New Source Review) and LAC 33:III.509.B (Prevention of Significant Deterioration) define “building, structure, facility, or installation” in similar fashion, as “all of the pollutant-emitting activities that belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person (or persons under common control).”

Therefore, in order to determine if a given facility is a major source for Part 70 and PSD purposes, the Louisiana Department of Environmental Quality (LDEQ) must determine if any other facilities (under common control) are located on contiguous or adjacent properties.

Contiguous

Facilities shall be considered contiguous if they are located on properties that share a common boundary.

Adjacent

 On June 3, 2016, the U.S. Environmental Protection Agency promulgated a rule entitled "Source Determination for Certain Emission Units in the Oil and Natural Gas Sector."  This rule revised the definitions of “major source” under 40 CFR 70.2 and “building, structure, facility, or installation” under 40 CFR 51.165(a)(1)(ii) and 40 CFR 51.166(b)(6) by including an industry-specific definition for the term “adjacent.”

For facilities in the oil and natural gas sector (i.e., standard industrial classification (SIC) major group 13), LDEQ interprets “adjacent” consistent with the aforementioned rule.  Facilities shall be considered adjacent if they are located on the same surface site or if they are located on separate surface sites that are within ¼ mile of one another (measured from the center of the equipment on the site) and they share equipment

• Shared equipment may include, but is not limited to, storage tanks, separators, natural gas dehydrators, and emission control devices.
• Surface site means any combination of one or more graded pad sites, gravel pad sites, foundations, platforms, or the immediate physical location upon which equipment is physically affixed.
• Separate surface sites that do not include shared equipment, even if within ¼ mile, are not considered to be adjacent

Daisy-Chaining

Surface sites should not be “daisy chained” for purposes of defining a single stationary source (in situations where, given a grouping of surface sites, the first site is located within ¼ mile of a second site, and one or more additional sites are located within ¼ mile of the second, but greater than ¼ mile from the first).  To illustrate this point, consider the following example:

• On surface site “A,” there is an existing collection of equipment consisting of several tanks, a pump jack, a heater treater, and a flare.  The owner/operator of site A decides to drill a new well within ¼ mile of site A, called site “B.”  Site B feeds its produced water to the tanks on site A.  Site B must consider the emissions from site A in determining whether site B is a major source because sites A and B are part of the same stationary source.
• At a later date, the same owner/operator decides to drill a third well, “C,” within ¼ mile of site B, but more than ¼ mile from site A.  Sites C and B do not share any equipment.  Therefore, site C is a single stationary source.  Site C is not included with sites A and B (just because of its proximity to B).  If site C feeds material to the storage tanks at site A, then it would still not be considered part of the stationary source that includes site A because it is located more than ¼ mile away from site A.
• Now, assume that the same owner/operator drills a fourth well, “D,” within ¼ mile of site A, but more than ¼ mile from sites B and C.  Site D will also feed its produced water to site A.  Site D must be treated as a modification to the source that is made up of sites A and B.  The new source consists of sites A, B, and D because sites B and D are within ¼ mile of the site at which the shared equipment exists.  However, site C is not part of this source because site C is more than ¼ from the surface site with which it shares equipment.

Contents of a Permit Application

Permit applications should include a table and plot or map of all facilities under common control that are located within ¼ mile of the facility addressed in the permit application.  All permitted, grandfathered, exempt (under LAC 33:III.501.B.4 or LAC 33:III.501.B.2.d), and unpermitted sites must be included.  The table should include the following information for each facility:

• facility name;
• Agency Interest (AI) number;
• current permit number;
• UTM coordinates (to at least the nearest 0.01 kilometer); and
• criteria pollutant emission rates in tons per year.

The table should also note whether any of the facilities listed share equipment.

The facility’s geographical center of equipment may be considered to define the center of the ¼ mile radius.  In the following example, 655.89 km E and 3400.65 km N may be used.