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On November 27, 2017, the Governor’s Office of Planning and Research (OPR) presented the California Natural Resources Agency with proposed amendments to the CEQA Guidelines. As Director Ken Alex noted in his transmittal letter, this is the most comprehensive update to the Guidelines since the late 1990s. Among other changes, OPR’s amendments affect the analysis of energy impacts, promote the use of vehicle miles traveled (VMT) as the primary metric for transportation impacts, and clarify Guidelines section 15126.2 to specify that an agency must analyze hazards that a project may risk exacerbating.

The amendments to the CEQA Guidelines have been shaped by several years of discussion and public comment. OPR began discussions with stakeholders in 2013 and released a preliminary discussion draft of the comprehensive changes to the Guidelines in August 2015. OPR received hundreds of comments on the proposed updates and has provided a document with Thematic Responses to Comments.

One of the most highly-anticipated and impactful changes is the switch from the level of service (LOS) to VMT as the primary metric in analysis of transportation impacts. These updates were required by Senate Bill 743, which directed OPR to develop alternative methods for measuring transportation impacts. Due to the complexity of these changes, OPR has provided a Technical Advisory on Evaluating Transportation Impacts in CEQA to assist public agencies.

Some highlights from the proposed updates include:

  1. Appendix G: adds new questions related to Energy, VMT, and Wildfire;
  2. Guidelines section 15064.3 (SB 743): establishes VMT as the primary metric for analyzing transportation impacts, with agencies having a two-year opt-in period to make the transition easier;
  3. Energy impacts: includes changes to Appendix G and makes clear that analysis must include energy use for all project phases and include transportation-related energy;
  4. Guidelines section 15126.2, subdivision (a): adds the phrase “or risks exacerbating” to implement the California Supreme Court’s holding in California Building Industry Association v. Bay Area Air Quality Management District (2015) 62 Cal.4th 369, requiring an EIR to analyze existing hazards that a project may make worse; and
  5. Guidelines section 15064.4: includes clarifications related to the analysis of greenhouse gas (GHG) emissions to reflect the Supreme Court’s decisions in Cleveland National Forest Foundation v. San Diego Association of Governments (2017) 3 Cal.5th 497 and Center for Biological Diversity v. Department of Fish & Wildlife (2015) 62 Cal.4th 204 (“Newhall Ranch”).

On January 25, 2018 the Natural Resources Agency initiated the formal rulemaking process. From the Agency: The Natural Resources Agency’s proposed updates to the Guidelines Implementing the California Environmental Quality Act are now available.  The proposed changes to the Guidelines and related rulemaking materials are available on the Agency’s website at http://resources.ca.gov/ceqa/.  Public hearings will be held in Los Angeles on March 14, 2018 and in Sacramento on March 15, 2018.  Written comments must be submitted by 5:00pm on March 15, 2018.  Hearing locations, instructions for submitting comments and related information regarding the rulemaking process is contained in the Notice of Proposed Rulemaking.

 

 

 

 

On November 21, 2017, the Fifth District partially published its decision in Association of Irritated Residents v. Kern County Board of Supervisors (2017) 17 Cal.App.5th 708. The published sections covered arguments about the baseline used for the oil refinery modification project, the mitigation of greenhouse gas (GHG) emissions, and the extent to which federal preemption precludes aspects of CEQA review of project impacts. In reversing the trial court’s judgment denying the petition for writ of mandate, the Court of Appeal upheld the EIR’s treatment of the project baseline and GHG emissions but determined that the county erred in relying on federal preemption to avoid analyzing and mitigating impacts from off-site rail activities.

The project involved modifications proposed by Alon USA to an existing petroleum refinery northwest of the City of Bakersfield. The refinery had undergone several ownership changes since 1932, with Alon USA purchasing it from Flying J and its subsidiary during the latter’s 2008 bankruptcy proceedings. Alon USA sought to expand existing rail, transfer and storage facilities, including the construction of a double rail loop connected to the BNSF railway. The expanded train facilities would allow the transport of crude oil from the Bakken formation in North Dakota to the refinery for processing. The Association of Irritated Residents, Center for Biological Diversity, and Sierra Club filed suit after the County certified an EIR and approved the project.

First, the court dealt with plaintiffs’ arguments about the use of year 2007 as the baseline for air pollution emissions instead of using year 2013 – the year that the County published the notice of preparation. In discussing Neighbors for Smart Rail v. Exposition Metro Line Const. Authority (2013) 57 Cal.4th 439, 457 (“Neighbors”), the court established that it was interpreting Neighbors to only require heightened scrutiny of baselines that use hypothetical future conditions and not of those that use data from past, fluctuating conditions. Based on this interpretation, the court found no error in the County’s use of data from year 2007 because substantial evidence supported this deviation from the “normal” baseline. The court concluded that it was reasonable to include an operating refinery in the baseline because: (a) existing permits and entitlements allow for the processing of up to 70,000 barrels per day; (b) Flying J’s bankruptcy filing in 2008 only temporarily halted processing of hydrocarbons; (c) refinery operations have been subject to prior CEQA review; and (d) the processing of crude oil could begin again without the currently proposed project. The court then turned to whether the County’s choice of year 2007 was supported by substantial evidence, and found that it was because 2007 was the last full year of refinery operations, and was not some hypothetical, maximum authorized amount. The court even included its own calculations of the average barrels per day for the period of 2001 through 2008 to show that the year-2007 figure of 60,389 barrels-per-day was less than the average of 60,994 barrels-per-day.

Second, the court addressed GHG emissions arguments. The court started by analyzing under the de novo review standard a question of first impression: can the volume of a project’s estimated GHG emissions be decreased to reflect the use of allowances and offset credits under the state’s cap-and-trade program? The court concluded that this use of the cap-and-trade program did not violate CEQA because Section 15064.4, subd. (b)(3), effectively directed the County to consider the project’s compliance with the state’s cap-and-trade program as a “regulation[] or requirement[] adopted to implement a statewide . . . plan for the reduction of mitigation of greenhouse gas emissions.” And the court concluded that the project’s compliance with the cap-and-trade program could be part of the substantial evidence supporting a finding of less-than-significant impacts from GHG emissions even though surrender of allowances would not result in the project emitting fewer GHG molecules than if the allowance had not been surrendered. The court explained that the cap-and-trade program was designed so that the “limited allocation and use of allowances means they are not available for use elsewhere” in the state.

In the final published section, the court dealt with federal preemption and off-site rail impacts. Claiming that the Interstate Commerce Commission Termination Act of 1995 (ICCTA) preempted CEQA review, the County had excluded analysis of some of the impacts from off-site main line rail operations that will deliver crude oil to the refinery. The court disagreed. Interpreting the California Supreme Court’s direction in Friends of Eel River v. North Coast Railroad Authority (2017) 3 Cal.5th 677, 722, the court of appeal concluded that the development of information pursuant to CEQA is not categorically preempted but may be preempted on an as-applied basis. Then, as an alternative to that broad legal conclusion, the court considered whether categorical preemption applied to the specific circumstances in this case. It concluded that no categorical preemption applied because analysis of indirect environmental effects “would impose no permitting or preclearance by a state or local agency upon the delivery of crude oil to the project site by a rail carrier,” and “would not control or influence matters directly regulated under federal law.” The court also concluded that there was no as-applied preemption because the environmental analysis of off-site rail activities “would not prevent, burden, or interfere with BNSF Railway’s operation.” Finally, the court directed the County on remand to use the tests stated in this opinion to determine whether particular mitigation measures may be preempted by the ICCTA.

 

 

On August 31, 2016, the Sixth District issued a decision in Bay Area Clean Environment v. Santa Clara County (previously published at: 2 Cal.App.5th 1197)* upholding the County’s EIR for a quarry reclamation plan. The non-profit challenger asserted claims under the Surface Mining and Reclamation Act (SMARA) and the California Environmental Quality Act (CEQA). The court concluded that the county had not violated either statute.

The 3,510-acre quarry started producing limestone and aggregate in the early 1900s. In 2006, the Department of Conservation concluded that the quarry was violating SMARA because slope instability issues had not been properly addressed in the earlier 1985 reclamation plan. High selenium levels downstream of the quarry also posed a problem. In 2007 and 2010, Real Party in Interest Lehigh Southwest Cement Company applied to the county for amendments to the 1985 plan that would close one pit while allowing for the opening of new mining areas to replace the reclaimed pit. In particular, the 2010 application proposed a new pit called the South Quarry. But, subsequently, Lehigh applied in 2011 for an amendment to the 1985 reclamation plan that closed the problematic pit without proposing any new pits. This 2011 application superseded all earlier applications.

The county prepared an EIR for the reclamation plan amendment and made the requisite findings under both CEQA and SMARA. The county concluded that the project would result in significant and unavoidable impacts of excess selenium runoff during the 20-year period of reclamation. Bay Area Clean Environment and Midpeninsula Regional Open Space District filed challenges to the project. Midpeninsula ultimately settled with Lehigh, but Bay Area Clean Environment appealed the trial court’s denial of its petition for writ of mandate.

The Sixth District Court of Appeal started by addressing the SMARA claims. First, the court concluded that evidence in the record supported the county’s finding that the reclamation plan complies with SMARA with regard to water quality. The court explained that SMARA provided the county with discretion to allow reclamation activities that may result in adverse impacts—such as the additional deposition of selenium in Permanente Creek—if those actions were necessary to comply with federal and state laws. Second, the court held that evidence in the record supported the county’s conclusion that the project’s impacts to red-legged frogs were mitigated to the extent possible.

The court turned to the CEQA claims next. First, the court rejected the challenger’s argument that the county had failed to analyze the cumulative impact of the potential new South Quarry pit that had been proposed in the earlier 2010 application. The court explained that the South Quarry pit was not a reasonably foreseeable future project because the application for a use permit for the new pit had been withdrawn. The court also noted that the county had not engaged in improper piecemealing because the amendment to the reclamation plan was a stand-alone project that did not depend on the future approval of a South Quarry pit.

Second, the court addressed the argument that the county’s findings about impacts to the red-legged frog were insufficient and not supported by substantial evidence. The EIR reported that direct impacts to the frog would be less than significant. The EIR also determined that impacts to aquatic life, of which the frog is included, from excess selenium runoff in the downstream areas would be significant and unavoidable. The court concluded that substantial evidence in the record supported the EIR’s conclusions about both direct and indirect impacts to the frog. The court also held that a statement of overriding considerations for impacts to the frog was not required because the potential direct impacts to the frog were less than significant. Although it is not clear from the opinion, presumably the county adopted a statement of overriding considerations for the significant and unavoidable impact to aquatic life from excess selenium runoff. The court rejected the petitioner’s argument that a statement of overriding considerations directed specifically to the frog was required.

Finally, the court affirmed the trial court’s decision to grant Lehigh’s motion to augment the administrative record. Lehigh had argued that an email between a herpetologist and staff of the Department of Fish and Wildlife (DFW) should be included in the record under Public Resources Code section 21167.6, subdivision (e)(10). In the email, Dr. Mark Jennings explained to DFW staff that his 2007 report contained typographical errors and that he had in fact never observed the red-legged frog in one particular pond. This email was sent to the consulting firm that prepared the biological resources assessment for the EIR. The court concluded that the email could be properly included in the record as evidence of the presence or absence of the frog in the reclamation area that was relied upon by the consultants who prepared the biological study for the EIR.

* Review Denied and Ordered Not to be Officially Published ,December 14, 2016, per Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115, 8.1120 and 8.1125.

Senate Bill 4 (SB 4), which was sponsored by Senator Fran Pavley and signed into law on September 20, 2013, required the Department of Conservation and its Division of Oil, Gas, and Geothermal Resources (DOGGR) to prepare an Environmental Impact Report (EIR) in order to study potential environmental impacts from well stimulation treatments. Senior Partner Jim Moose and Associate Elizabeth Sarine worked closely with Aspen Environmental Group and DOGGR staff on the SB 4 EIR.

DOGGR certified the Final EIR for the “Analysis of Oil and Gas Well Stimulation Treatments in California” on July 1, 2015.

The California Association of Environmental Professionals (AEP) has selected the SB 4 EIR for a Merit Award in the category of Outstanding Environmental Analysis Document, to be presented at AEP’s April 4, 2016 conference. The plaque for the award explicitly recognizes the “substantial assistance from the law firm of Remy, Moose and Manley” provided during the preparation of the EIR.

On March 9, 2016, the Fourth District issued a decision in Preserve Poway v. City of Poway (2016) 245 Cal.App.4th 560, upholding the City’s use of a mitigated negative declaration (MND) in its approval of a small residential project. The appellate court reversed the trial court’s ruling that an environmental impact report (EIR) was necessary because evidence of the project’s potential social impacts were insufficient to trigger the preparation of an EIR.

The project at issue involved subdividing an 11.6 acre property with a horse boarding facility into 12 residential lots. Project opponents and others in the community had enjoyed using the public horse boarding facility, known as Stock Farm, for 20 years. But the owner of Stock Farm decided to close down the facility and applied to the City for approval of the small residential project. The residential development was marketed as “Poway Equestrian Estates,” enticing potential owners with the prospect of boarding up to nine horses per lot. Because residential uses were legally permissible under the existing zoning and there was no evidence of any adverse environmental impacts that could not be mitigated to less than significant levels, the City approved the project under an MND.

Project opponents argued that the California Environmental Quality Act (CEQA) required the preparation of an EIR instead of an MND. The trial court agreed, concluding that there was substantial evidence of a significant impact on the City’s horse-friendly community character. For example, several public commenters expressed that the reason they had moved to Poway was because of the equestrian lifestyle and lamented that closing the stables would take a wholesome and positive activity away from the community’s youth. The members of the Poway Valley Riders Association (PVRA), which owns a 12-acre equestrian facility across the street from the project site, also complained that they would not have any other places to board their horses.

The Fourth District reversed the trial court’s ruling, focusing on the distinction between physical environmental changes and social or economic impacts. The court started by restating the established rule under CEQA that economic and social impacts resulting from a project are not considered significant impacts on the environment. Then the court addressed the extent to which “community character” must be considered under CEQA. Where “community character” involves aesthetic impacts, the court explained that CEQA requires adequate analysis and mitigation of such aesthetic impacts. But the court noted that the “community character” at issue in this case did not involve aesthetic or visual impacts so much as it involved “what is pleasing to the psyche” and the residents’ sense of well-being. The court found that there was no evidence the residential project would be visually out of character with the surrounding land uses because single-family homes could be found to the immediate north, east, and northwest. Ultimately, the court held that CEQA did not require the City to study the project’s potential psychological and social impacts upon the community character.

The court rejected the argument that the level of public controversy should in itself require an EIR to be prepared, citing San Francisco Beautiful v. City and County of San Francisco (2014) 226 Cal.App.4th 1012, 1026. The court also rejected the argument that trucks and horses associated with the equestrian facility on PVRA property across the street from the project site could have negative impacts on future residents of the project, quoting the holding in California Building Industry Association v. Bay Area Quality Management District (2015) 62 Cal.4th 369, 392, that CEQA does not generally require lead agencies to consider the effects of existing environmental conditions on a proposed project’s future users or residents. Finally, the court refused to consider project opponents’ arguments that the MND was deficient as to public safety and biological resources issues because Preserve Poway forfeited those issues when it chose not to cross-appeal.

 

 

 

On October 9, 2015, the Fourth District ordered partial publication of North County Advocates v. City of Carlsbad (Sept. 10, 2015) ___Cal.App.4th___, Case No. D066488), excluding Sections III, IV, and V. The published section of the Opinion provides guidance on the proper use of an historic baseline by lead agencies for certain common types of urban land use projects with potentially fluctuating future impacts.

Westfield proposed to renovate a shopping center in Carlsbad that had originally been built more than 40 years prior. The city approved Westfield’s request to renovate a former Robinsons-May store and other small portions of the shopping center. Petitioners challenged the city’s approval, arguing that the project’s EIR used an improper baseline in its traffic analysis because it treated the Robinsons-May store as fully occupied, even though it had been only periodically occupied for the past six years. The trial court rejected petitioners’ contentions, and the Court of Appeal affirmed.

The Court of Appeal started by discussing the rule stated in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439, 457, that an agency’s decision to deviate from the normal rule for determining a baseline cannot be disturbed by a reviewing court if substantial evidence supports the agency’s “determination that an existing conditions impacts analysis would provide little or no relevant information or would be misleading as to the project’s true impacts.”

The Court then provided an overview of cases that have dealt with the issue of a historic baseline. In Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310, 322, the California Supreme Court disapproved of the air district’s selection “as the project’s baseline for nitrogen oxide emissions the amount the boilers would emit if they operated at the maximum level allowed under ConocoPhillips’s existing permits,” because “ConocoPhillips had never operated them at that level” in the past. The Court in Communities for a Better Environment explained that the deviation from the normal rule was impermissible because the district’s selected baseline was hypothetical and based on maximum permitted operating conditions that were not the norm and had never before occurred at the facility. In contrast, the Court of Appeal in Cherry Valley Pass Acres & Neighbors v. City of Beaumont (2010) 190 Cal.App.4th 316, 340, upheld the City of Beaumont’s use of a historic baseline derived from fluctuating historical water use of past agricultural operations on the project site.

Here, the Court upheld the City of Carlsbad’s selection of a traffic baseline that assumed full occupancy of the shopping center as opposed to the “existing conditions” of the shopping center with recent key vacancies. The Court found that the baseline derived from the “fluctuating occupancy” of the shopping center over the past few decades was more like the baseline derived from historical water use in Cherry Valley Pass Acres than the entirely hypothetical baseline in Communities for a Better Environment. Concluding that substantial evidence of actual historical operations of the shopping center space over a 30-year period supported the City’s selection of a historic baseline, the Court distinguished Communities for a Better Environment.

The unpublished portions of Opinion addressed whether substantial evidence supported the City’s selected traffic mitigation measure (Section III), whether the City adequately responded to comments on the Draft EIR (Section IV), and whether the trial court erred by awarding the city all of its requested costs (Section V).

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.

 

At the May 21, 2014 Oil & Gas Strategies Summit in New York, EIA Administrator Adam Sieminski shocked many with his announcement that the federal agency has drastically cut its estimates of technically recoverable oil in the Monterey Shale from 13.7 billion barrels to 600 million barrels. According to Sieminski’s reported comments, the revision was prompted, in part, by new evidence the EIA and U.S. Geological Survey collected on output from wells where new techniques have been tested.

In 2011, the EIA published a report by INTEK Inc. that estimated there were 15.4 billion barrels of technically recoverable shale oil, or “tight oil” in the Monterey Formation.   Sometime in 2012, the EIA reduced this estimate to 13.7 billion barrels.  Now, the agency plans to release a report in the coming months that will explain why it has decided to severely reduce the estimate to 600 million barrels.

The Post Carbon Institute’s December 2013 report on the Monterey Shale presaged this news.   The PCI report—“Drilling California: A Reality Check on the Monterey Shale”—provided several reasons why the EIA’s 2011 estimates were likely to be “highly overstated.”  For example, the report asserts that:

  • “Existing fields within the Monterey are areally restricted and are primarily controlled by structural and stratigraphic trapping mechanisms, thus the assumption of broad regions of prospectivity is highly questionable.”
  • “An analysis of every well producing from Monterey shale reservoirs reveals that average initial productivity is less than half of the typical horizontal and vertical shale wells assumed in the EIA/INTEK report, and less than a quarter of the ‘typical Elk Hills vertical shale well’.”
  • “Fracking and acidization have doubtless been tried extensively on Monterey shale wells, yet the data do not show any significant increase in initial well productivity or likely cumulative oil recovery for recent wells.”

(J. David Hughes, PCI Fellow, Drilling California: A Reality Check on the Monterey Shale, at p. 46.)

On May 1, 2014, the Orange County Superior Court ruled against petitioners in six related cases and upheld the EIR for the Cadiz Valley Water Conservation, Recovery, and Storage Project.  The court noted its concern over the designation of Santa Margarita Water District as the lead agency for the project under CEQA.  But it concluded that even if the County of San Bernardino would have been a more appropriate lead agency, these concerns did not provide sufficient grounds for the granting of any of the writs sought by petitioners Delaware Tetra and Center for Biological Diversity.

Cadiz, Inc., is a private corporation that owns approximately 34,000 acres in the Mojave Desert portion of eastern San Bernardino County.  A vast groundwater basin capable of holding an estimated 17-34 million acre feet (MAF) underlies the Cadiz property.  The groundwater recovery project would allow Cadiz to sell up to 2 MAF of water that would otherwise become saline and evaporate over the next 100 years.  The project involves pumping and delivering to water providers like the Santa Margarita Water District a total of 50,000 AF a year for 50 years. The participating water districts and water providers could also send their surplus surface water supplies to the Cadiz Valley Project to recharge the groundwater and store it until the water is needed in subsequent years.

Currently, six entities have signed purchase or option agreements with Cadiz: 1) Santa Margarita Water District, 2) Three Valleys Municipal Water District, 3) Suburban Water Systems, 4) Golden State Water Company, 5) Jurupa Community Services, and 6) California Water Service Company.  These entities will receive 80% of the project’s water supplies, while 20% is reserved for future use by water agencies in San Bernardino County.

The project drew CEQA challenges from both the private sector and environmental groups.  Petitioner Delaware Tetra Technologies owns a salt mining operation in the Cadiz and Fenner Valleys of San Bernardino County. The groundwater recovery project threatens the continued operation of the salt mine because it will reduce the flow of saline water that creates salt when it evaporates.

In other suits, petitioners Center for Biological Diversity (CBD) and other conservation groups asserted several CEQA claims, including concern over the potential environmental impacts on nearby springs in wilderness areas and the Mojave National Preserve.   They argue that the project would be growth-inducing because the Santa Margarita Water District will send the groundwater it purchases to support development in Orange County.  The Orange County Superior Court’s Ruling did not specify its rationale for rejecting petitioners’ CEQA arguments.  Instead, the court directed respondents Santa Margarita Water District and the County of San Bernardino to prepare proposed findings as to each petition reflecting that the court adopted the respondents’ arguments but noting that the court had some concerns regarding the lead agency designation.  Counsel for CBD has indicated that it will appeal the decision.

On May 1, 2014, the United States District Court for the Eastern District of California issued an order granting a joint motion for partial relief from judgment and dissolution of injunction in Sierra Club v. Tahoe Regional Planning Agency (E.D. Cal., Case No. CIV. 2:12-0044 WBS CKD). In doing so, the court granted relief from its prior order requiring the County of Placer and Tahoe Regional Planning Agency (TRPA) to recirculate the Environmental Impact Report-Environmental Impact Statement (EIR–EIS) for the Homewood Ski Area Master Plan.

The court found the parties met their burden under Federal Rule of Civil Procedure 60(b) to modify the court’s original order. Specifically, the court concluded that new economic information supported the EIR-EIS’ discussion of the financially viability of a smaller project. The court also considered a recent settlement between the plaintiffs and the developer, in which the developer agreed to trim the project by 13 units. The court stated that the county and TRPA would determine whether additional environmental review was necessary based on this new information. The court held that the proposed modifications to the project under the settlement and the new evidence regarding the feasibility of alternatives warranted dissolving the injunction.

The court’s decision allows the developer to move forward with the project, as modified by the settlement agreement.

RMM attorneys Whit Manley, Howard (Chip) Wilkins, and John Wheat represented the developer — Homewood Village Resorts, LLC and JMA Ventures, LLC — in the case.

The California Attorney General’s Office has filed a letter brief with the Third District Court of Appeal arguing that a federal interstate commerce law preempts CEQA review by the Third District in a pending challenge to the High-Speed Rail project. If the state’s arguments are successful, the High-Speed Rail project could face fewer environmental approval hurdles in the future. In particular, environmental review for the project could proceed solely under the National Environmental Policy Act (NEPA) and potentially occur more quickly than it would have under CEQA.

After petitioners/appellants in Town of Atherton, et al. v. California High-Speed Rail Authority (Case No. C070877) appealed the trial court’s dismissal of their suit, the Third District ordered all parties to brief whether federal law preempts state environmental law with respect to the rail project. On August 9, 2013, the California Attorney General’s Office, representing the California High-Speed Rail Authority, argued in its brief to the court that the federal Interstate Commerce Commission Termination Act (ICCTA) preempts CEQA and thus, the Third Appellate District lacks jurisdiction to impose CEQA remedies in the action.

The federal preemption argument is based on a June 13, 2013, decision by the federal Surface Transportation Board (STB) that it “has jurisdiction” over California’s rail project. The STB explained that California’s High-Speed Rail falls within its congressionally granted jurisdiction because it is an intrastate (i.e., between two or more points within California) “transportation by rail carrier” that “is carried out ‘as part of the interstate rail network.’” (California High-Speed Rail Authority-Construction Exemption-in Merced, Madera and Fresno Counties, Cal., Docket No. FD 35724, available at http://www.stb.dot.gov/decisions/readingroom.nsf/UNID/3DA3D75A2453DD2685257B8900680856/$file/43070.pdf.) The STB found that High-Speed Rail connects to Amtrak’s interstate rail lines, and thus is itself part of the interstate rail network.

According to the California Attorney General, the ICCTA established the STB and vested it with “exclusive regulatory jurisdiction over railroads involved in interstate commerce.” While acknowledging that the ICCTA “retains for the states the police powers reserved by the [U.S.] Constitution,” the Attorney General argues that the ICCTA contains express preemption language that preempts “state environmental preclearance laws,” including CEQA and CEQA remedies. This argument is supported by cites to federal case law, STB’s own decisions, and two California appellate cases.

If the Attorney General’s preemption argument is successful, California courts would lack subject matter jurisdiction over CEQA challenges to the High-Speed Rail project. This would affect not only the petitioners/appellants in currently pending cases, but also parties that may wish to bring suits against the future approvals of additional segments of the project. In this scenario, the High-Speed Rail project’s environmental review would only be subject to NEPA requirements.

On June 13, 2013, the STB approved and adopted the Final Environmental Impact Report/ Environmental Impact Statement, finding it took “the requisite ‘hard look’ at the potential environmental impacts associated with the proposed Project as required by NEPA.” For High-Speed Rail opponents, the options for challenging this NEPA decision are somewhat less attractive (i.e., less likely to result in significant delay or additional mitigation) than bringing CEQA claims.

In Friends of Oroville v. City of Oroville, ___Cal.App.4th ___ (Aug. 19, 2013, Case No. C070448), the Third District Court of Appeal ruled that the City of Oroville misapplied the threshold-of significance standard in Assembly Bill 32 (the California Global Warming Solutions Act of 2006) when it approved an EIR for a new Wal-Mart Supercenter. In the published portion of the opinion, the court found that the city identified the proper significance threshold for the Wal-Mart project’s greenhouse gas (GHG) emissions. But the court held that the city failed to apply the standard properly because it a) applied a “meaningless” number to determine insignificant impact and b) failed to ascertain the existing GHG emissions for the project. The case provides clear guidance for an agency making a determination under CEQA of GHG emissions impacts.

The project involved the relocation and expansion of an existing Wal-Mart store. At the time the EIR was developed, neither the city nor the Butte County Air Quality Management District had adopted a plan for reducing greenhouse gas emissions that would be applicable to the project. Therefore, the city adopted a standard that asked whether the project would “significantly hinder or delay” California’s ability to meet the reduction targets in Assembly Bill 32, which seeks to reduce greenhouse gases including carbon dioxide to 1990 levels by the year 2020. The EIR noted that the State Air Resources Board’s Scoping Plan for achieving that goal calls for cutting approximately 30 percent from “business-as-usual” emission levels projected for 2020. The court found this standard proper.

The city’s error came when it compared the project’s estimated carbon dioxide emissions at build-out with the entire state of California’s 2004 GHG emissions. The calculation showed the project’s emissions constituted just 0.003 percent of the state’s total emissions. The EIR concluded the impact was less than significant because it would not significantly hinder or delay California’s ability to meet the GHG reduction targets in Assembly Bill 32. In a sharp rebuke, the court called the comparison “meaningless” and “worse than apples to oranges” because “[o]f course, one store’s GHG emissions will pale in comparison to those of the world’s eighth largest economy.”

The court pointed to Citizens for Responsible Equitable Environmental Development v. City of Chula Vista (2011) 197 Cal.App.4th 327, for the proper application of the standard. According to the court, the relevant question is whether a project’s emissions should be considered significant “in light of the threshold-of significance standard of Assembly Bill 32, which seeks to cut about 30 percent from business-as-usual emission levels projected for 2020 [emphasis added].”

The court also found the EIR deficient because it failed to ascertain or estimate the effect of the project’s mitigation measures on GHG emissions. The court stated: “Without these determinations, ascertaining whether AB 32’s target reductions are being met is difficult if not futile.” In its disposition, the court reversed the trial court’s denial for writ of mandate and remanded with directions to grant the petition as to the issue of greenhouse gas emissions and payment of transportation-related fees.
[written by Deb Kollars]

The Fourth District recently ordered publication of its decision in San Diego Citizenry Group v. County of San Diego (July 30, 2013, Case No. D059962) __Cal.App.4th__. The Fourth District upheld the trial court’s decision rejecting a challenge to the adequacy of the county’s EIR, which analyzed a zoning ordinance intended to encourage the development of boutique wineries. But the appellate court determined the trial court had erred in awarding the county the costs of preparing planning commission transcripts for the administrative record because these transcripts were not in existence at the time of the board of supervisors’ approval of the ordinance.

Facts and Procedural Background

This case arises from the County of San Diego’s efforts to promote the growth of grapes and the expansion of the wine industry. In 2006, the board of supervisors began exploring ways to allow boutique wineries to expand and operate by right within the county. The county received public comments revealing concerns about traffic and related traffic safety impacts, especially on privately owned rural roads. Nonetheless, in 2008, the board directed its staff to develop a “tiered winery ordinance” that would allow boutique wineries by-right.

In 2009, the county prepared and circulated for public review a Draft EIR analyzing the potential environmental impacts of adopting the winery ordinance. The DEIR concluded that the project would cause 22 significant and unmitigated environmental impacts as a result of approving an unlimited number of future wineries by-right. Despite these impacts, the board adopted a Final EIR and a statement of overriding considerations in 2010. San Diego Citizenry Group filed a petition for writ of mandate challenging certification of the EIR. The Group requested that the county prepare the administrative record.

The trial court denied the petition and ordered the petitioner to reimburse the county for the costs of preparing the record. San Diego Citizenry Group appealed.

The Appellate Court’s Decision

The project objectives were proper.

On appeal, the petitioner argued that the county did not properly make a “preliminary policy determination” regarding the objectives for the project, and in particular, that the EIR improperly relied on these objectives when analyzing the feasibility of mitigation measures. But the court quickly dispensed with this argument, noting that the county included within the EIR a “statement of the objectives sought by the proposed project” in compliance with CEQA Guidelines section 15124. In fact, the county defined nine objectives for adopting its proposed ordinance amendment.

Adequacy of discussion and mitigation of impacts to private roads

Next, the petitioner argued the EIR was inadequate because it did not discuss “any ‘additional’ mitigation measures in ‘meaningful detail.’” But the court noted that the petitioner failed to identify any potentially feasible mitigation measures that the EIR omitted. The county was not required to engage in an extensive discussion of infeasible mitigation measures, including mitigation measures that are incompatible with the project’s “core” objectives. Requiring the county to analyze the incorporation of mitigation measures or alternatives that would defeat a project’s primary objectives would run contrary to CEQA’s definition of “feasible.”

The petitioner also attacked the adequacy of the EIR’s discussion of impacts to private roads caused by the ordinance because the EIR rejected a mitigating traffic measure previously adopted in 2008. But the court determined that the county was not required to adopt the 2008 traffic measure simply because it was suggested and addressed impacts identified in the EIR. An agency may delete previously adopted mitigation during review of a project so long as it states a legitimate reason for doing so. The court determined the county had a legitimate reason for not adopting the 2008 measure because it was developed for a completely different project involving private landowner agreements, rather than by-right uses. Furthermore, the FEIR included mitigation measures, such as limitations on the size of vehicles allowed to enter boutique wineries and various restrictions on operations at the wineries, which specifically addressed these impacts to private roads.

The EIR adequately discussed potential environmental impacts

The petitioner argued that the EIR did not sufficiently analyze the project’s potential significant environmental impacts for a variety of reasons.

Focusing on potential future impacts to traffic, appellants first argued that the EIR analysis was insufficient because the county did not use its “best efforts” to predict how many by-right wineries could be developed under the ordinance. But the court noted that the EIR did not “simply state that the level of development is unknown and then label each impact as significant without meaningful analysis or discussion.” The county based a prediction of future boutique winery development on the pattern of development of existing grape growers and wineries. The county had surveyed 26 existing wineries, eleven of which responded, with eight indicating an intention to convert to boutique wineries under the proposed ordinance. The FEIR analyzed the amount of traffic each new boutique winery would generate and determined the maximum concentration of wineries that could be developed. Therefore, the court found the FEIR adequately analyzed the project’s traffic impacts based on existing and anticipated development.

Second, the petitioner argued that the EIR did not sufficiently identify project impacts to water supplies. But the court disagreed, noting that the FEIR met the standard under Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412, that “a conceptual plan EIR, such as one for a general plan amendment to allow proposed development,” must identify “the likely source of water for new development, noting the uncertainties involved, and discussing measures being taken to address the situation in the foreseeable future.” The county also collected survey data from wineries located in San Diego and Riverside counties to better estimate impacts on water supplies. This was sufficient.

Third, the petitioner argued the FEIR’s discussion of grading permits was “materially misleading” because it suggested grading permits could mitigate for “every type of environmental impact associated with the winery.” Determining that the FEIR actually acknowledged the exact opposite, the court rejected this argument.

Fourth, the petitioner argued that the board of supervisors’ statement of overriding considerations was invalid because the FEIR was deficient and did not provide a basis for the findings. But the court determined the EIR actually relied on conservative assumptions and disclosed potential environmental impacts in an informative matter. Thus, the board was within its discretion to rely on the EIR when it adopted the statement of overriding considerations.

Fifth, the petitioner argued that the ordinance was inconsistent with the county’s general plan. Specifically, the petitioner argued the ordinance allowed by-right wineries in environmentally constrained areas for which the general plan requires environmental review of development projects. The court found, however, that an EIR is not required to be consistent with a general plan; instead, the EIR must identify and discuss any such inconsistencies. The EIR in this case sufficiently discussed the alleged inconstancy, and the petitioner could not show that the county’s decision to exclude wineries from the environmentally constrained area provisions of the general plan was “unreasonable.”

Reimbursement for transcript costs

Finally, the Court of Appeal concluded that the trial court had erred when it ordered the petitioner to reimburse the county for the cost of preparing certain transcripts for the record since the transcripts were not created until after the approval of the winery ordinance. Section 21167.6, subdivision (e)(4) requires the party preparing the record to include transcripts or minutes “that were presented to the decisionmaking body prior to action on environmental documents or on the project.” The trial court had ordered appellants to pay approximately $6,000 for the costs of creating transcripts of planning commission hearings, but appellants successfully argued that they should not have to pay these costs because it was undisputed that the planning commission transcripts were not before the board when it made its decision to approve the winery ordinance.

On August 16, 2013, Sacramento Superior Court Judge Michael Kenny issued a ruling in Tos v. California High Speed Rail Authority(Case No. 34-2011-00113919-CU-MC-GDS), finding that the High Speed Rail (HSR) Authority’s funding plan did not comply with Streets and Highways Code Section 2704.08, which was codified by Proposition 1A, approved by the statewide voters in 2008. But Judge Kenny ultimately concluded that no writ of mandate rescinding approval of the funding plan, invalidating the legislative appropriation, or invalidating subsequent project approvals should be issued at this time.

The Authority approved a funding plan for the HSR on November 3, 2011. Under S&W Code section 2704.08(c), the funding plan needed to identify the “sources of all funds to be invested in the corridor” and to certify that the “authority has completed all necessary project level environmental clearances necessary to proceed to construction.” Petitioners filed a complaint and petition on November 14, 2011, asserting that the funding plan did not comply with Section 2704.08. On July 18, 2012, before the trial court issued its ruling, the Legislature enacted Senate Bill 1029, appropriating state bond funds and available federal funds for the construction of one of two alternative Initial Operating Sections (IOS).

Although Judge Kenny found that the funding plan did adequately identify sources of funds for a segment of the IOS referred to as the Initial Construction Section (ICS) from Madera to just north of Bakersfield, he found the funding plan violated Section 2704.08 because it failed to do so for the entire IOS from Merced to Los Angeles. Additionally, Judge Kenny found the Authority had not properly certified that environmental clearances for the entire project were complete. At this time, only the Madera-to-Fresno segment has received final project-level environmental review.

Based on these findings, Judge Kenny concluded that he could issue a writ of mandate directing the Authority to rescind its approval of the funding plan. Nonetheless, the judge decided not to issue such a writ because it would have no “substantial or practical impact on the program” without a concurrent invalidation of the legislative appropriation for the HSR or subsequent approvals. Furthermore, Judge Kenny concluded that no writ should be made to invalidate legislative appropriation made through SB 1029, partly because petitioners did not seek such relief in their Second Amended Petition and Complaint, and they only raised the issue for the first time in their reply brief. Finally, the judge directed the parties to submit supplemental briefing on the issue of whether a writ should issue to invalidate subsequent approvals.