From the cliffs over the fogbound Monongahela River, the muddy gash that used to be a meadow on the opposite bank is just a change from green to yellowy brown. Bulldozers cleared that ground 18 months ago, getting ready for a new plant to make coke for the roaring blast furnaces of Pittsburgh.

But the 'dozers have done nothing since, stopped in a peculair way by two kinds of fog: the kind that settles in when the breezes stall in the mountains, and the kind surrounding the Clean Air Act.

The Alla-Ohio Co. wanted to build that coke plant, and the people of South Hills, W.Va., just north of that onetime meadow, put a stop to it, using the Clean Air Act as their ammunition.

The story is one of a highly controversial and complicated provision of the act called "prevention of significant deterioration," or PSD, which aims to preserve the quality of air that is cleaner than national purity standards -- the sort of air enjoyed by the people of South Hills.

Because of this story and others like it, major corporations are taking aim at the Psd rules and environmentalists are preparing tough defenses as Congress begins rewriting the Clean Air Act, which expires next September.

In essence, PSD rules say that only so many grams of air pollutants -- the numbers vary according to how dirty the air already is -- may be emitted by any new power plant or factory. The goal is to allow industrial growth while keeping the air breathable.

But the law is very complicated, and a garrison of business and industry groups, along with the National Commission on Air Quality, have argued that Psd rules are far more expensive than is justified by their effect on the air.

The Reagan administration is expected to seek as major overhaul of the rules. The people of South Hills would like to keep the rules as they are. As they see it, PSD saved them from a mammoth coke plant that would have blackened theeir windowsills and fouled their air.

Most of the 100 or so families in South Hills were outraged when Karen Jenkins told them, that morning in September 1979, about the bulldozer driver who had knocked on her house trailer door at 2 a.m. He asked her to move the 1972 Ford that was up on blocks just off her dirt road. She refused, saying the car was on her property, and the bulldozer buried the car.

For weeks after, the 'dozer drivers refused to tell anyone why they were clearing out the riverbank meadow called Round Bottom, one of the few flat 400-acre patches in the area. The outraged residents of South Hills stopped the machines temporarily by standing in their path, and then stopped them for a longer time by going to court.

"We made a tactical mistake by not consulting as closely as we should have with the locals," said J. Richard Knop, president of Alla-Ohio, a Washington, D.C.-based coal exporting firm. "We thought things had been pretty well greased by the governor."

The company had promised the state 6,000 jobs in construction, operating and spinoff work, and had won, in return, a quick political go-ahead and promises of fast action on all the necessary permits.

Ala-Ohio said West Virginia and its $125 million plant were idealy suited for one another. The state has 90 percent of the nation's high-quality coking coal, the Monogahela is navigable from Round Bottom right to Pittsburgh, and railroad lines bisect the site. The plant would use coal from Alla-Ohio's own mines to help meet what Knop said will be a major shortage of coke after 1983, making it a good business deal.

To get the pure-carbon coke that is combined with molten iron to make steel, a coke plant uses a collection of ovens that heat low-sulfur coal to about 2,000 degrees Fahrenheit in a near-vacuum for 17 to 20 hours. The process evaporates impurities, and those impurities are messy.

South Hills residents remember the old Sharon coke oven 15 miles away at Fairmount, which was shut down in 1977 because it was too dirty. "The gas from that plant scaled the paint on the house every year," said Naomi Swisher, whose hilltop property is a fence away from the Roundbottom land. "One trip across the porch and your feet were black. When the wind was out of the east, the smell was so bad you couldn't hardly stay in the kitchen."

The citizens argued that the same inversions that bring the frequent fogs into the mountain valley would hold in dangerous pollution. "Those of us who live there can see these inversions always hanging over the valley," said Karen Gribben, head of the South Hills Community Organization. "There's no ventilation. We argued they should built it somewhere else."

The South Hills people had no faith in the promises of Alla-Ohio that new coke plant technology would stop the smell and the soot.

So they fought, and in the process had to learn about computer printouts, coke plants, the innards of the Clean Air Act and the way bureaucracies work.

Under the PSD rules, West Virginia is a Class 2 area: Its air is not as pristine as the parklands of Class 1, where hardly any new pollution is allowed, nor is it as dirty as in Class 3 cities, where new pollution sources can do what they like as long as the overall air quality does not go below the national standard. For every Class 2 area, the Enirnomental Protection Agency has set up a sort of "dirt budget,"" allowing a certain amount of new pollution from each new plant.

Industrial critics argue that the Class 2 and 3 distinctions should be eliminated to save paperwork. For most of the country, that would leave in effect only the ceiling of the national standard. And, because West Virginia's air is well within that purity standard, it would mean a freer rein for industry in emitting pollutants.

David Hawkins, now of the National Clean Air Coalition and formerly EPA's air quality chief, says the rule is designed to control growth now, to keep a few large, dirty plants from using up all the "dirt budget" for the future.

Under state law, Alla-Ohio had to convince the West Virginia Air Pollution Control Commission that the coke plant would use the best available control technology and that it would limit emissions to certain numbers allowed under Psd rules. Alla-Ohio promised to emit only 25.8 micrograms of sulfer dioxide in every cubic meter of air -- far less, they said, than the maximum of 91 micrograms allowed in Class 2 areas. The soot output also would be less than the allowable limits, Alla-Ohio promised, and backed its claims with a computer model.

Questioning those claims wasn't easy. "Getting information was really rough," said William Byrne, an attorney who did much of the research for South Hills while working for Legal Aide. "The state people wouldn't tell us anything without a Freedom of Information Act request . . . and then they charged us 50 cents a page to copy it."

In the end, however, Byrne and an assortment of volunteer technical experts manage to convince the state commission that Alla-Ohio could not back up its claims.

Carl Beard, director of the state commission, sent Alla-Ohio's application back for several rewrites, but in the end, he said, "this plant had a lot more problems with it than just the [PSD] increments. They had nothing to substantiate their claims, no test data."

Alla-Ohio withdrew the application Feb. 12, the day before Beard planned to reject it. Nothing has happened since.

But Alla-Ohio plans to refile its application, and a favorable rewrite of the Clean Air Act could help them win the battle this time around.

Residents of South Hills say they wil continue to fight, not matter what happens to the Clean Air Act in Congress. The PSD regulations were "an important tool," says Gribben of the South Hills Community Organization, but she added, "If the company had done the numbers realistically in the first place they wouldn't have had to spend all that money. It would have been obvious this wasn't a good place to build."

Even if the coke plant ultimately is built, the community sees the potential for at least a measure of victory.

"If they do get this plant in here," says Jenkins, whose car was buried on the first day of the battle. "I feel we can keep 'em and make sure they do it right, at least."