The D.C. Circuit Court decision on January 22, 2013 in Sierra Club v. EPA will have significant ramifications on future PSD permitting. The Sierra Club challenged the EPA rule establishing Significant Impact Levels (SILs) and Significant Monitoring Concentrations (SMCs) for PM2.5, which are screening tools designed to exempt the applicant from cumulative modeling and preconstruction monitoring requirements under the Clean Air Act. These tools can be essential to obtaining a PSD permit within a reasonable time to achieve business objectives. The court found that EPA overstepped its authority in establishing SILs and SMCs. The court reads the Clean Air Act to require continuous preconstruction ambient monitoring sufficient to perform a “complete and adequate analysis” of the pre-project ambient conditions to enable a determination as to whether the PSD project will result in a violation of the NAAQS. The court determined that EPA could not exempt all projects with impacts below the SILs without first analyzing whether there was enough ambient headroom in the area to accommodate the project without violating the NAAQS.

While this decision is specific to PM2.5, the analysis could be applied to challenge the way that SILs and SMCs are used for other pollutants in areas that do not have local ambient air quality monitoring for the PSD pollutants implicated by a major modification or a new source. The decision is expected to encourage the siting of ambient monitors in areas of anticipated growth. To the extent that Cliffs is considering ambient monitors to challenge or calibrate over predictive model results, this decision offers additional support for using a continuous ambient monitor that measures all regulated pollutants that could be implicated by future PSD expansion projects. Sites with adequate monitoring will be one year ahead of competing sites without local monitors for getting major modifications or new sources through the PSD permitting process.