This however is more plausible;
As of the end of last year, Valve has said that there were no plans as of yet for a new Source Engine from the studio. They created Source to be modular and upgradable over time, which is what they've been doing for some years now. So either this is still Source but with some upgrades (likely) or it's an entirely new engine that is only a few months old (not quite as likely). It could also be that the two are unrelated and that Episode 3/Half-Life 3 will be build on Source, just a more updated version of the engine you already know. Source 2 could then be something the studio is working on for the next-generation of consoles that will not see the light of day in Episode 3/Half-Life 3 but rather further on down the line.
Keep in mind that it is widely known, said, and accepted that the builds of the Source Engine dating from around the time Left 4 Dead 2 was released is known as "Source Engine 2". This was the case, at least, internally at Valve and later made known publicly as a bit of an off hand remark. So before the world gets set on fire by all of this speculation, it would be quite wise not to get your hopes up too much.
Exactly. anyone touting a "new Source" engine is totally missing the point of what valve set out to do by crafting an engine that could be slowly updated with each successive release.
Of course the issue still is that a) they don't release anything so it never updates, b) it was 10 years behind the curve when it did (fuckign eventually) release and c) even when they do update it (CS:GO) it looks like utter and complete shit and makes xbox graphics seem good in comparison.
Vale you gotta...well ignore them tbh...