Archives: February 2015

EPA Releases Final Wetland Connectivity Report Clarifying “Significant Nexus”

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The US EPA recently released the final draft of its report on the Connectivity of Streams and Wetlands to Downstream Waters. The purpose of the report is to summarize current scientific understanding about the connectivity and mechanisms by which streams and wetlands affect the physical, chemical, and biological integrity of downstream waters. The focus of the review is on surface and shallow subsurface connections of small or temporary streams, nontidal wetlands, and certain open waters. The report stresses that it neither considers nor sets forth legal standards for Clean Water Act (CWA) jurisdiction, nor does it establish EPA policy.

In 2006, the US Supreme Court decided Rapanos v. United States, where it held that a geographically isolated body of water can be regulated under the CWA only if it has a “significant nexus” to “navigable waters” of the United States. The meaning of “significant nexus” was never clarified. The report on connectivity is meant, in part, to provide insight on this question.

According to the report, scientific evidence “unequivocally” demonstrates that streams, individually or cumulatively, exert a strong influence on the integrity of downstream waters. EPA found that wetlands and open waters in riparian areas and floodplains are physically, chemically, and biologically integrated with rivers via functions that improve downstream water quality. These functions include: the temporary storage and deposition of channel-forming sediment and woody debris; recharge of groundwater sustaining river baseflows; storage of floodwater; retention and transformation of nutrients, metals, and pesticides; and export of organisms or reproductive propogating materials to downstream waters. In addition to providing effective buffers to protect downstream waters from point source and nonpoint source pollution, wetlands and open waters form integral components of river food webs, providing nursery habitat for breeding fish and amphibians, colonization opportunities for stream invertebrates, and maturation habitat for stream insects.

The report recognizes that watersheds are integrated at multiple spatial and temporal scales by flows of surface water and groundwater, transport, transformation of physical and chemical materials, and movements of organisms. Connectivity of streams and wetlands to downstream waters occurs along a continuum that can be described in terms of frequency, duration, magnitude, timing, and rate of change of biotic fluxes to downstream waters. Variations in the degree of connectivity influence the range of functions that streams and wetlands provide. Thus, the incremental effects of individual streams and wetlands are cumulative across entire watersheds and must be evaluated in the context of other streams and wetlands.

Third Appellate District Upholds Department of Fish and Wildlife EIR, But Finds Department Violated APA in Adopting Underground Regulations

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The Third District Court of Appeal held that the California Department of Fish and Wildlife’s program EIR analyzing the Department’s statewide fish hatchery and stocking enterprise passed muster. The Department did not abuse its discretion in the manner it organized the EIR, analyzed the project, and mitigated numerous impacts. The court also found, however, that the Department had violated the Administrative Procedure Act (APA) by adopting three mitigation measures, which imposed new obligations on private aquaculture facilities and required the Department to perform new duties, without complying with APA procedures. Center for Biological Diversity v. Dept. of Fish and Wildlife (Feb. 10, 2015) ___ Cal.App.4th ___, Case No. C072486.

The Department operates 14 trout hatcheries and 10 salmon and steelhead hatcheries throughout the state, stocking fish at close to 1,000 locations each year. After CEQA’s enactment, the hatching and stocking enterprise was found categorically exempt from complying with CEQA. Subsequently, concerns arose regarding the enterprise’s impact on native and wild animals due to predation and genetic hybridization. To address these concerns, the Department developed aquatic biodiversity management plans and hatchery genetic management plans. Center for Biological Diversity sued the Department in 2006, and the trial court agreed with the Center that the enterprise was not categorically exempt from CEQA because it likely caused significant environmental impacts. The court in this prior suit ordered the Department to prepare an EIR and comply with CEQA.

The Department prepared a broad-scope, program EIR/environmental impact statement pursuant to that decision and to additionally comply with NEPA. The EIR analyzed the statewide hatchery and stocking enterprise, as well as three other programs, including the Fishing in the City Program (providing fishing opportunities in urban areas), and the Private Stocking Permit Program (authorizing fish stocking by private aquaculture facilities in private and public lakes and ponds). The Department selected operations from 2004 to 2008 as the baseline and identified more than 200 impacts on biological resources. The EIR proposed a number of mitigation measures to lessen these impacts, and laid out three project alternatives. The EIR did not consider closing the hatcheries or eliminating trout stocking as alternatives.

The Department’s EIR was challenged by the Center and other plaintiffs representing environmental interests in two separate CEQA suits, with plaintiffs representing recreational fishing interests bringing a third suit under the APA. The trial court upheld the EIR and found no violations of the APA. The appellate court affirmed in part and reversed in part.

First, the Third District addressed the EIR’s level of analysis. The CEQA Guidelines do not specify the level of analysis required to be performed in a program EIR. Rather, the Guidelines require an EIR to provide sufficient information in light of what is reasonably feasible. The court found the EIR satisfied that standard. The document reviewed and analyzed the hatchery and stocking enterprise specifically and comprehensively, but within reason, providing for further environmental review where warranted. Given the nature and statewide scope of the project and the consistency of its impacts across the state, the court found the analysis adequate to serve as a program EIR that also operated as project EIR. No additional site-specific environmental review was required given the agency’s determination that site-specific impacts were sufficiently addressed in the program EIR, and there were no new impacts. Indeed, that is the function of a program EIR.

The court also found the EIR did not impermissibly defer formulation of mitigation measures, as it provided sufficient performance standards for future mitigation to meet. The court noted that the rule prohibiting deferred mitigation prohibits loose or open-ended performance criteria. Here, in contrast, the EIR’s performance standards were sufficient to inform the Department what it had to do and accomplish, and committed the Department to mitigating impacts before proceeding with the enterprise. The performance standards were sufficient to ensure the aquatic biodiversity management plans would mitigate impacts in mountain lakes to insignificance. The Department also relied upon federal regulations to develop mitigation measures for impacts on anadromous fish.

The court held that the Department properly used the existing enterprise as the environmental baseline. The court rejected the Center’s contention that the EIR must use the existing environmental conditions—absent the project—as the baseline. It noted that though the origin of present conditions may interest enforcement agencies, such information is irrelevant to CEQA baseline determinations. The CEQA baseline must include existing conditions even when those conditions have never been reviewed and are unlawful. Furthermore, despite using the existing enterprise as the baseline, the EIR described, as much as reasonably possible the impacts hatcheries and stocking have had statewide on the environment from the enterprise’s inception more than a century ago, and proposed mitigation for those continuing impacts. Thus, the EIR did exactly what the Center sought.

Finally, the court held the EIR considered an adequate range of alternatives. For the no project alternative, the EIR considered the baseline project—continuation of the existing enterprise without making any changes. The court upheld this decision, noting that where the EIR is reviewing an existing operation or changes to that operation, the no project alternative is the existing operation; it is a factually based forecast of the environmental impacts of preserving the status quo. The court rejected the Center’s argument that the no project alternative should have been the elimination of the stocking enterprise, stating that the EIR is not the approval of a new program, but review of an ongoing one. The Department was not required to analyze the alternative scenario of discontinuing its hatchery and production enterprise, as it had no legal authority to implement a no-stocking alternative.

Turning to the APA contentions, the court concluded that three mitigation measures imposed by the Department were underground regulations, i.e., regulations adopted without complying with the notice and procedure requirements imposed by the APA. The mitigation measures at issue were: MM BIO-226 (Implement Private Stocking Permit Evaluation Protocol), MM BIO-229 (Require and Monitor Invasive Species Controls at Private Aquaculture Facilities), and MM BIO-233b (Implement Private Stocking Permit Evaluation Protocol). The court found that the measures fell within the definition of a “regulation” and were not exempt from APA requirements. The court rejected the Department’s argument that MM BIO-226 was exempt as a regulation relating “only to the internal management of the state agency,” and that MM BIO-229 and MM BIO-233b were exempt as regulations that embody the “only legally tenable interpretation of a provision of law.” In particular, the court concluded that MM BIO-226 required the Department to “perform a new duty” and MM BIO-229 imposed on a “class of persons a new affirmative duty.” The court’s application of the APA to mitigation measures in a state agency’s EIR appears to be a first and could have far-reaching implications on other EIRs studying statewide activities.

City Council Member’s Appeal of Planning Commission Decision Violated Principles of Fairness and the Newport Beach Municipal Code

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In Woody’s Group, Inc. v. City of Newport Beach, the Fourth District Court of Appeal, Division 3, reversed the trial court’s decision denying a writ of administrative mandamus and held that the City Council of Newport Beach violated principles of fairness in overturning a permit application approved by the city’s planning commission.

Woody’s Warf (“Woody’s”) is a long-established restaurant overlooking the harbor in Newport Beach. In 2013, the Newport Beach Planning Commission voted to approve a conditional use permit to allow Woody’s to have a patio cover, remain open until 2 a.m. on weekends, and allow dancing in the restaurant. Four days after the planning commission’s decision, a member of the Newport Beach City Council filed an appeal of the planning commission’s decision because the council member “strongly believe[d]” the conditional use permit was inconsistent with the city’s general plan. Following a “lively” public meeting, in which the council member who filed the appeal presented a lengthy presentation on why the planning commission’s decision should be overturned, the city council voted to reverse the planning commission’s decision.

Woody’s thereafter filed with the Orange County Superior Court a petition for a writ of administrative mandate with the superior court, seeking to set aside the city council’s decision. The trial court denied the writ. The Court of Appeal reversed.

The Court of Appeal first held that Woody’s had established an “‘unacceptable probability of actual bias”’ on the part of the council member that filed the appeal. According to the court, the council member’s notice of appeal “showed he was strongly opposed to the planning commission’s decision on Woody’s application” – that is, he took a position against the project. Furthermore, the court explained, the council member’s speech to the council had been written out beforehand, “wholly belying his own self-serving comment at the hearing that “‘I have no bias in this situation.’” Therefore, the court held, the council member should not have been part of the body hearing the appeal.

Second, the court held that the appeal did not meet the procedural requirements of the city’s municipal code, and therefore should not have been brought. The city argued that the city had a “policy and practice” of allowing council members to appeal the planning commission’s decision. This argument was not well taken by the court. As the court explained: “The City violated the rules laid down in the city’s own municipal code, then purported to exempt itself from that code by invoking some previously undocumented custom of ignoring those rules when it comes to council members themselves. Needless to say, changing the rules in the middle of the game does not accord with fundamentally fair process.”

 

Department of Conservation, Division of Oil, Gas, and Geothermal Resources (DOGGR) Releases Environmental Impact Report Evaluating Oil and Gas Well Stimulation Treatments as Required by Senate Bill (SB) 4

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Enacted in late 2013, SB 4 requires state agencies to complete three main tasks in creating a comprehensive regulatory program for oil and gas well stimulation treatments: (1) adopt new temporary and permanent regulations, (2) prepare an EIR on well stimulation as conducted in California, and (3) conduct an independent scientific study. DOGGR released the Draft EIR required under task 2 on January 14, 2015. You can find that Draft EIR here.

The Draft EIR analyzes potential impacts of hydraulic fracturing and other well stimulation treatments, though not all oil and gas recovery operations throughout the state of California. The public is invited to review and submit written comment on the Draft EIR from January 14, 2015, till March 16, 2015. During the comment period, interested parties can also attend six public comment meetings throughout the state to provide verbal and written comments on the Draft EIR. SB 4 requires the Department of Conservation and DOGGR to certify a Final EIR by July 1, 2015. A more detailed discussion of SB 4 is available on our blog.

SB 4 Implementation to Yield New Permanent Regulations, an EIR, and an Independent Scientific Study by July 2015

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Senate Bill 4 (SB 4), which was sponsored by Senator Fran Pavley and signed into law on September 20, 2013, requires state agencies to complete three main tasks in creating a comprehensive regulatory program for oil and gas well stimulation treatments: (1) adopt new temporary and permanent regulations, (2) prepare an EIR on well stimulation as conducted in California, and (3) conduct an independent scientific study. In 2014, several Public Resources Code sections added by SB 4 were amended by Senate Bill 861. The main substantive requirements of SB 4 discussed below are now found in the amended versions of Public Resources Code sections 3160 and 3161.

On the regulatory track, SB 4 required the Department of Conservation and its Division of Oil, Gas, and Geothermal Resources (DOGGR) to propose and adopt new permanent regulations specifically addressing well stimulation treatments such as hydraulic fracturing and acid matrix stimulation. The proposed regulations and subsequent revisions were available for public comment during three separate periods between November 2013 and October 2014. The Office of Administrative Law approved the finalized  permanent regulations on December 30, 2014, but they will not take effect until July 1, 2015 pursuant to Public Resources Code section 3161, subdivision (a). At that time, numerous sections will be added to title 14 of the California Code of Regulations, which require operators conducting well stimulation treatments to, among other things:

  • Evaluate the well and surrounding area to ensure the integrity of the well and the geologic and hydrologic isolation of the oil and gas formation during and following well stimulation treatment (sections 1782, 1783, 1783.1, 1784, 1784.1, 1784.2, 1785, 1787);
  • Monitor for seismic activity in the area during and after hydraulic fracturing (section 1785.1);
  • Provide notice to neighboring land owners and tenants of an approved well stimulation permit and notice of those parties’ opportunities for water sampling and testing (section 1783.2, 1783.3).

Because the prescribed rulemaking process that allows for public comment and multiple revisions takes longer than a year, SB 4 required DOGGR to implement interim emergency regulations, which will remain in effect until July 1, 2015 when the final permanent regulations go into effect.

On the CEQA track, SB 4 requires DOGGR to prepare an EIR in order to study potential environmental impacts from well stimulation treatments. The Draft EIR, in an effort to supplement the proposed regulations, includes mitigation measures that can be applied as needed to different well stimulation permit applications in different regions. On January 14th, the Department of Conservation and DOGGR published a Draft EIR titled “Analysis of Oil and Gas Well Stimulation Treatments in California.”

As directed by Public Resources Code section 3161, the EIR analyzes potential impacts of hydraulic fracturing and other well stimulation treatments, though not all oil and gas recovery operations, throughout the state of California. Though not expressly required by statute, the “Project” analyzed in the EIR includes implementation of Water Recycling Standards, Habitat Protection Standards, Surface Water Protection Standards, and Groundwater Protection Standards. On top of these protective standards, the EIR proposes a plethora of mitigation measures for potentially significant impacts. The EIR also includes comparative analysis of six alternatives, including a No Future Well Stimulation Treatment Alternative and an Active Fault Zone Restrictions Alternative. The public is invited to review and submit written comment on the Draft EIR from January 14, 2015, till March 16, 2015. During the comment period, interested parties can also attend six public comment meetings throughout the state to provide verbal and written comments on the Draft EIR. SB 4 requires the Department of Conservation and DOGGR to certify a Final EIR by July 1, 2015.

Kern County, where a majority of the state’s well stimulation activity will likely occur, is in the process of preparing its own EIR on oil and gas exploration, extraction, operations, and production activities in unincorporated Kern County. In particular, the County’s EIR will study potential impacts from proposed amendments to the County’s Zoning Ordinance, Title 19, Chapter 19.98 (Oil and Gas Production). This EIR will address well stimulation treatments as one of several oil and gas exploration activities. Although there is no official release date for Kern County’s Draft EIR, it will likely be made available to the public in the first half of 2015.

Finally, SB 4 balances the regulatory and CEQA efforts with an independent scientific assessment of well stimulation. The California Natural Resources Agency commissioned the California Council on Science and Technology (CCST) and Lawrence Berkeley National Laboratory (Berkeley Lab) to conduct an independent scientific assessment of well stimulation in California. An interdisciplinary steering committee oversees the study, with Dr. Jane C.S. Long serving as the science lead and the Berkeley Lab serving as the primary research institution supporting CCST in the scientific assessment. The final report will undergo vigorous peer review.

On January 14, 2015, CCST released Volume I of the study to the public. Volume I is titled “An Independent Scientific Assessment of Well Stimulation Technologies in California: Well Stimulation Technologies and their Past, Present, and Potential Future Use in California.” As the first of three volumes, it describes well stimulation treatments; how they are generally conducted and how they are practiced in California; and where they have been and are being used for oil and gas production in the state. Volumes II and III will be released in July 2015. Volume II will assess potential impacts to water, air quality, greenhouse gas emissions, induced seismicity, biological resources, traffic, and noise. Volume III will present case studies to assess specific geographic regions.

Implications

When New York Governor Andrew Cuomo and his administration announced on December 17, 2014, that his state will soon adopt a complete ban on High-Volume Hydraulic Fracturing (HVHF) as a well stimulation technique in New York, activists called for California to adopt a similar statewide ban. The information in DOGGR’s Draft EIR makes clear that the picture is not so black and white. First, the Governor cannot single-handedly ban an activity that is currently allowed under applicable statutes. Second, how hydraulic fracturing and well stimulations are conducted varies from state to state, depending on local geologic attributes. For example, the Marcellus Shale in New York is significantly different from California’s Monterey Shale, which poses geologic challenges that led to the federal  Energy Information Administration dramatically reducing its estimates of recoverable oil in the Monterey Shale from much higher 2012 estimates. Finally, the New York Department of Health’s conclusions about significant public health concerns relating to HVHF in New York cannot be broadly applied to hydraulic fracturing activities in other states. Each state, including California, will need to evaluate how well stimulation is conducted within the state and the adequacy of state regulations and permit conditions to address public health and environmental concerns. The requirements in SB 4 ensure that this evaluation in California will be thorough. Thus, prudent and concerned members of the public should engage in the public review process provided by CEQA to strengthen the protective measures proposed in DOGGR’s EIR.