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New Ozone and PM2.5 SILs: Part 3 – Legal Basis

As part of EPA’s roll out of the new Ozone and PM2.5 SILs on April 17, 2018, EPA also released a “Legal Memorandum” setting forth the legal rationale for its approach to the new SILs. In the Legal Memorandum, EPA eschews reliance on the de minimis concept articulated in Alabama Power v. Costle; instead, EPA focuses on its authority to determine whether a new source or modification will “cause or contribute” to a NAAQS or increment violation under Clean Air Act (CAA) Section 165. This issue of NSR Law Blog examines EPA’s legal rationale in more detail.


The Legal Memorandum begins by acknowledging the requirement in Section 165, reinforced by Sierra Club v. EPA, 705 F.3d 458 (D.C. Cir. 2013), that a new source or modification must demonstrate that it will not cause or contribute to a violation of the NAAQS or an increment. From this, the Legal memorandum looks to Section 165 and concludes:

Considering the relevant terms of the Act and other factors discussed below, … permitting authorities may elect to read section 165(a)(3) of the Act to be satisfied when a permit applicant demonstrates that the increased emissions from the proposed new or modified source will not have a significant or meaningful impact on ambient air quality at any location where a violation of the NAAQS or PSD increment is occurring or may be projected to occur. This reading may be based solely on an interpretation of the phrase “cause, or contribute to,” as specifically used in the context of section 165(a)(3) of the Act, without relying on the inherent authority to establish exemptions for de minimis circumstances.

Legal Memorandum, at 1-2. The Legal Memorandum moves to this conclusion by noting that Congress did not define “cause” or “contribute” in the CAA and that CAA Section 165 directs EPA to determine the mechanism for making such demonstrations.

  • Definitions. The Legal Memorandum begins by looking to the common understanding of “cause” as seen in dictionaries. It concludes that “emissions from a proposed PSD source that will be responsible for, be the reason for, or result in a violation of the NAAQS may be considered to cause that violation.” It then imports concepts of causality from the common law – the requirement that “but for” the source, the violation would not have occurred, to reinforce this interpretation. However, EPA notes that “contribute” connotes a broader meaning, that the courts have found it to be “ambiguous” in its use in the CAA, and that they have upheld the concept of “contribute sufficiently” to a violation, with EPA being granted discretion to determine “sufficiently.” Legal Memorandum at 4.

  • Context. The Legal Memorandum notes that Section 165(a)(3) does not require a source to show “no impacts” in a preexisting or expected nonattainment area, only that it will not “cause or contribute” to such nonattainment (or increment exceedance). This language militates against a finding that any addition of pollutants within a nonattainment area “contributes”; instead, it supports the concept that there must be a sufficient contribution. The Legal Memorandum also notes that under the NNSR program, all NNSR applicants must offset their emissions – effectively a presumption of impact – but that under the PSD program, additional controls are only required if the source’s emissions will cause or contribute to an exceedance. This difference, in the Legal Memorandum’s view, supports finding discretion that only certain levels of impact are relevant.

  • Language of Section 165. The Legal Memorandum notes that EPA is directed to determine the method and has used models and that at some point, there must be discretion to determine at what level the model’s prediction is to be taken as significant.

  • Past Practice. The Legal Memorandum details the lengthy history of agency interpretation, Environmental Appeals Board decisions, and court decisions supporting its approach.

At this stage, the Legal Memorandum takes an important step: it defines what the significant impact level (or SIL) is and does from the EPA’s perspective:

The air quality concentration levels that the EPA has identified as SILs do not function to exempt a source from making the demonstration required by section 165(a)(3) of the Act. Rather, these concentration levels provide a streamlined means of making the air quality impact demonstration required by section 165(a)(3). …. If the applicant thereby shows that its increased emissions do not have a significant impact on air pollutant concentrations in the ambient air, the permitting authority may conclude that the applicant has made a demonstration that its increased emissions will not cause or contribute to any air pollutant concentrations that violate the relevant NAAQS or PSD increment.

Legal Memorandum at 13. The significance of this discussion is revealed shortly thereafter, when the Legal Memorandum states:

As discussed above, the phrase “cause, or contribute to” in section 165(a)(3) of the Act is reasonably read in context to not apply to impacts on air quality that are not meaningful or significant. In order to show that a particular degree of change in concentration is not meaningful or significant in this context, it is not necessary to make the showing required to establish a de minimis exception from a statutory requirement – that the burdens of regulation yield a gain of trivial or no value. Rather, when a concentration value (which may be described as a SIL) is used to quantify the point below which a new or modified source does not cause, or contribute to, a violation of the NAAQS or PSD increment, it is sufficient for the EPA or a state permitting authority to justify the value as a level below which an impact on air quality may be regarded as not meaningful or significant. In general terms, a trivial or de minimis impact on air quality may be considered “meaningless” or “insignificant,” but the use of a SIL to identify such a level in the PSD program need not be based on inherent agency authority to establish a de minimis exception to section 165(a)(3) of the Act.

Legal Memorandum at 13-14. While the Legal Memorandum is clear that any such value must be justified on the record, it also states that EPA’s technical work may be used to supply that record, unless the permitting authority chooses to develop its own standard.


The Legal Memorandum reflects a shift in EPA’s approach to SILs. Earlier justifications had relied upon the agency’s de minimis authority recognized under Alabama Power v. Costle, but de minimis claims tend to be subject to more scrutiny and are subject to upset when a court determines that it weighs the costs and benefits differently from the agency. The new rationale, which is that cause or contribute inherently contains the concept of “sufficient” impact to warrant action, and that the sufficiency is entrusted to agency discretion, tends to increase the likelihood of judicial deference to the agency’s conclusions. The Legal memorandum is thus an important piece of EPA’s new SIL structure.

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