Tag: mitigation measures

Fifth District Holds Kern County’s Ordinance for Streamlining Oil and Gas Well Permits Must Be Set Aside Due to Multiple CEQA Violations, Including Deferred Formulation of Mitigation Measures and Failure to Use Proper Threshold of Significance for Analyzing Noise Impacts

In King and Gardiner Farms, LLC v. County of Kern et al. (2020) 45 Cal.App.5th 814, the Fifth District Court of Appeal held that the County of Kern must rescind its approval of a gas and oil ordinance that would streamline the County’s permitting process for new oil and gas wells. In the published portions of the decision, the court held: (1) the mitigation measures for the ordinance’s significant impacts to water supplies impermissibly deferred formulation of the measures or delayed the actual implementation of the measures and the EIR’s discussion of the effectiveness of the mitigation measures was inadequate; (2) the County’s finding that the ordinance’s conversion of agricultural land would be mitigated to a less-than-significant level was not supported by substantial evidence because, among other things, the mitigation measures allowed for conservation easements, which do not constitute actual mitigation; (3) the County inappropriately applied a single threshold for determining the significance of the project’s noise impacts; and (4) the County must rescind the ordinance and not re-approve the ordinance until the County has complied with CEQA.

Background

In November 2015, the Kern County Board of Supervisors approved an ordinance to streamline the permitting process for new oil and gas wells and certified an EIR for the ordinance. Because some of the impacts of the ordinance would be significant and unavoidable, the Board of Supervisors adopted a statement of overriding considerations, finding that the ordinance’s benefits outweighed its significant environmental impacts.

A private farm (KG Farms) and a group of environmental organizations, including Sierra Club, filed petitions for writ of mandate alleging that the County violated CEQA and the State Planning and Zoning Law in approving the ordinance. The trial court held that the EIR violated CEQA regarding impacts on rangelands and from paving as an air pollutants mitigation measure. The petitioners appealed, arguing that the County violated CEQA in additional respects. The Court of Appeal agreed with the petitioners.

Water Supply Mitigation Measures

The County’s EIR concluded that the ordinance would have a significant and unavoidable impact on water supplies because implementation of the ordinance would deplete the County’s municipal and industrial water supplies. To mitigate this impact, the EIR proposed several mitigation measures. One measure provided that, to the extent feasible, applicants for permits under the ordinance shall increase or maximize the re-use of produced water. Produced water is groundwater that naturally occurs in oil and gas reservoirs brought to the surface with the extracted oil and gas and separated from the hydrocarbons after extraction. The Court of Appeal held that the requirement for applicants to increase or maximize their use of produced water violated CEQA because it merely set forth a generalized goal, rather than establishing specific performance standards that must be met. The court opined that were it to hold such a measure satisfied CEQA, lead agencies and project proponents—aware of the court’s precedent—would have scant incentive to define mitigation measures for other projects in specific terms. Instead, planning documents or ordinances adopted by local governments could merely state that permit applicants must reduce environmental impacts to the extent feasible. Allowing such an approach, the court reasoned, would undermine CEQA purpose of “systematically identifying” feasible mitigation measures that will reduce environmental impacts. (See Pub. Resources Code, § 21002.)

Another provision of the County’s water supply mitigation required that the five biggest oil industry users of municipal and industrial water work together to develop and implement a plan identifying new measures to reduce municipal and industrial water use by 2020. The court held that this mitigation measure—which unquestionably deferred formulation of mitigation—violated CEQA because it lacked specific performance standards to include in the plan. Moreover, the measure did not commit the County to the measures ultimately included in the plan. Further, it assigned the duty to implement the measure to unidentified third parties who might not agree to participate in the task or who might not act in good faith. Yet another flaw with this mitigation measure was that the plan was not required to be developed until 2020, whereas the ordinance took effect in 2015. Thus, the measure allowed permits for oil and gas activities to be issued without being subject to the measures contained in the plan. Accordingly, the measure violated the CEQA principle against delayed implementation of mitigation measures.

Another mitigation measure adopted by the County specified that “[i]n the County’s required participation for the formulation of a Groundwater Sustainability Agency [pursuant to the Sustainable Groundwater Management Act (Senate Bill 1281)], the Applicant shall work with the County to integrate into the Groundwater Sustainability Plan for the Tulare Lake-Kern Basin, best practices from the oil and gas industry to encourage the re-use of produced water from oil and gas activities.” The mitigation measure set a re-use “goal” of 30,000 acre-feet per year. The Court of Appeal held that this mitigation measure violated CEQA because the groundwater sustainability plan mentioned in the measure must be adopted by January 31, 2020—four years after the ordinance was approved.  Therefore, the measure was improperly deferred. Furthermore, the goal of re-using 30,000 acre-feet per year of produced water was merely a goal, and not an enforceable commitment, as required by CEQA.

The Court of Appeal further held that because the water supply mitigation measures were of unknown effectiveness, in order for the County to properly adopt a statement of overriding considerations under CEQA, the EIR must “(1) describe the mitigation measures that are available (i.e., currently feasible) and (2) identify and explain the uncertainty in the effectiveness of those measures.” The court reasoned that such a requirement is mandated by the general rule that an EIR must alert the public and decisionmakers of the significant problems a project would create and must discuss currently feasible mitigation measures.

Agricultural Mitigation

The County’s EIR found that, without mitigation, the project has the potential to convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance to non-agricultural use because the ordinance would allow oil and gas activities, including new wells, to be located on agricultural lands. The EIR concluded, however, that, with mitigation, this impact would be reduced to less than significant. The mitigation measure adopted by the County for this impact allowed permit applicants to comply by adopting one or more of four options (a through d). The court held that because not all of the options constituted adequate mitigation under CEQA, the County lacked substantial evidence to support its conclusion that the ordinance would have a less-than-significant impact on agriculture.

In particular, option “a” of the agricultural mitigation measure authorized the use of agricultural conservation easements at a 1:1 ratio (one acre of agricultural land conserved for every one acre converted to non-agricultural uses). The court held that conservation easements do not constitute adequate mitigation because they do not create new agricultural land to replace the agricultural land being converted to other uses. Rather, conservation easements simply prevent the future conversion of the agricultural land. In other words, conservation easements do not actually offset a project’s impacts on agriculture. Accordingly, the inclusion of option “a” in the agricultural mitigation measure rendered the mitigation measure ineffective.

Option “b” of the agricultural mitigation measure allowed for the purchase of conservation credits from an established agricultural mitigation bank. The court agreed with the petitioners that there was no evidence in the administrative record that such banks existed. Thus, the record lacked substantial evidence to support a finding that this option would actually mitigate agricultural impacts. Therefore, it was not sufficient mitigation under CEQA.

The court also concluded that the County had failed to adequately respond to comments suggesting that the County adopt a mitigation measure requiring the clustering of wells so that fewer acres of agricultural lands would be converted under the ordinance. The County’s response to such comments noted that the County’s General Plan includes a policy requiring the clustering of wells, but the response did not specifically address the feasibility of adopting a mitigation measure requiring well clustering. Therefore, court concluded that the County’s responses to comments failed to comply with the requirements of section 15088, subdivision (b) of the CEQA Guidelines, which require a “reasoned analysis” in response to comments raising “significant environmental issues.”

Noise Thresholds of Significance

To determine whether implementation of the ordinance would cause significant noise impacts, the County used a quantitative threshold of 65 dBA DNL, meaning that the ordinance would not cause a significant noise impact if noise levels stayed below that threshold. The court held that the County’s use of a single threshold violated CEQA because the threshold did not measure the increase in noise levels over ambient levels. Comments on the EIR, as well as the County’s own noise report that was appended to the Draft EIR, suggested using an increase of 5 dBA to determine whether the increase in noise above ambient levels constituted a significant impact. For unexplained reasons, the County did not do so. Instead, the County argued that it was entitled to substantial deference in selecting the significance thresholds. Although the court agreed that the County is entitled to deference in its choice of significance thresholds, the court held that the County’s use of an absolute noise threshold for evaluating all ambient noise impacts violated CEQA because it did not provide a “complete picture” of the noise impacts that may result from implementation of the ordinance.

Remedy

The County requested the court to exercise its equitable powers, which include the power to order the status quo preserved, and allow the ordinance to remain in effect while the County corrects the deficiencies in the EIR and mitigation measures. The court declined to do so. The court reasoned that the usual remedy in a CEQA case is to order the respondent to rescind its approvals; the court saw no reason not to do so in this case. Unlike other cases that allowed an ordinance that benefited the environment to remain in place, the oil and gas permitting ordinance was not adopted for the benefit of the environment.

The court also directed that the new EIR prepared by the County should include updated baselines for the water supply and air quality analyses because conditions have changed since the County issued the notice of preparation (NOP) of the original draft EIR that warrant updating the baseline.

California Supreme Court holds that CEQA requires EIRs to show a reasonable effort to substantively connect a project’s air quality impacts to likely health impacts

In a much-anticipated opinion, the California Supreme Court in Sierra Club v. County of Fresno (Dec. 24, 2018) 6 Cal.5th 502 held that portions of the air quality analysis in Fresno County’s EIR for the 942-acre Friant Ranch Specific Plan violated CEQA. In reaching this decision, the Court made four important holdings:  (1) when reviewing whether an EIR’s discussion of environmental effects “is sufficient to satisfy CEQA,” the court must be satisfied that the EIR “includes sufficient detail to enable those who did not participate in its preparation to understand and consider meaningfully the issues the proposed project raises”; (2) an EIR must show a “reasonable effort to substantively connect a project’s air quality impacts to likely health consequences”; (3) “a lead agency may leave open the possibility of employing better mitigation efforts consistent with improvements in technology without being deemed to have impermissibly deferred mitigation measures”; and (4) “[a] lead agency may adopt mitigation measures that do not reduce the project’s adverse impacts to less than significant levels, so long as the agency can demonstrate in good faith that the measures will at least be partially effective at mitigating the Project’s impacts.”

The Friant Ranch project is a Specific Plan calling for approximately 2,500 age-restricted (ages 55+) residential units, and other uses, including a commercial center and a neighborhood electric vehicle network. Fresno County’s EIR for the project generally discussed the health effects of air pollutants such as Reactive Organic Gases (ROG), oxides of nitrogen (NOx), and particulate matter (PM), but without predicting any specific health-related impacts resulting from the project. The EIR found that the project’s long-term operational air quality effects were significant and unavoidable, even with implementation of all feasible mitigation measures. The EIR recommended a mitigation measure that included a “substitution clause,” allowing the County, over the course of project build-out, to allow the use of new control technologies equally or more effective than those listed in the adopted measure.

After the trial court denied Sierra Club’s petition for writ of mandate, the Court of Appeal reversed, holding that the EIR’s air quality analysis and air quality mitigation measures violated CEQA. On October 1, 2014, the Supreme Court granted review of the appellate court’s decision. In a unanimous decision issued December 24, 2018, the Supreme Court reversed in part, and affirmed in part, the Court of Appeal’s decision.

The Court first considered which standard of judicial review applies to claims that an EIR’s discussion of environmental impacts is inadequate or insufficient. The Court explained that an EIR’s discussion of environmental impacts is adequate and sufficient where “the discussion sufficiently performs the function of facilitating ‘informed agency decisionmaking and informed public participation.” To that end, an EIR must “reasonably describe the nature and magnitude of the adverse effect.” The evaluation does not need to be exhaustive, but the courts will review the discussion “in light of what is reasonably feasible.” Claims that an EIR lacks analysis or omits the magnitude of the impact involve mixed questions of law and fact, and thus are generally reviewed de novo. The courts will apply the substantial evidence standard, however, to claims challenging the EIR’s underlying factual determinations, such as which methodologies to employ. “Thus, to the extent a mixed question requires a determination whether statutory criteria were satisfied, de novo review is appropriate; but to the extent factual questions predominate, a more deferential standard is warranted.”

The Court next considered whether the Friant Ranch EIR’s air quality analysis complied with CEQA. The Court held that an EIR must reflect “a reasonable effort to discuss relevant specifics regarding the connection between” and the estimated amount of a given pollutant the project will produce and the health impacts associated with that pollutant. Further, the EIR must show a “reasonable effort to put into a meaningful context” the conclusion that the project will cause a significant air quality impact. Although CEQA does not mandate an in-depth health risk assessment, CEQA does require an EIR to adequately explain either (a) how “bare [emissions] numbers” translate to or create potential adverse health impacts; or (b) what the agency does know, and why, given existing scientific constraints, it cannot translate potential health impacts further.

With respect to the Friant Ranch EIR, the EIR quantified how many tons per year the project will generate of ROG and NOx (both of which are ozone precursors), but did not quantify how much ozone these emissions will create. Although the EIR explained that ozone can cause health impacts at exposures for 0.10 to 0.40 parts per million, this information was meaningless because the EIR did not estimate how much ozone the Project will generate. Nor did the EIR disclose at what levels of exposure PM, carbon monoxide, and sulfur dioxide would trigger adverse health impacts. In short, the EIR made “it impossible for the public to translate the bare numbers provided into adverse health impacts or to understand why such translation is not possible at this time (and what limited translation is, in fact, possible).”

The Court noted that, on remand, one possible topic to address would be the impact the Project would have on the number of days of nonattainment of air quality standards per year, but the Court stopped short of stating such a discussion is required. Instead, the County, as lead agency, has discretion in choosing the type of analysis to supply.

The Court further held that the EIR did not fulfill CEQA’s disclosure requirements in that it stated that the air quality mitigation would “substantially reduce” air quality impacts but failed to “accurately reflect the net health effect of proposed air quality mitigation measures.”

Next, the Court examined whether the air quality mitigation measure impermissibly deferred formulation of mitigation because it allowed the County to substitute equally or more effective measures in the future as the Project builds out. The Court held that this substitution clause did not constitute impermissible deferral of mitigation because it allows for “additional and presumably better mitigation measures when they become available,” consistent with CEQA’s goal of promoting environmental protection. The Court also explained that mitigation measures need not include quantitative performance standards. If the mitigation measures are at least partially effective, they comply with CEQA; this is true even if the measures will not reduce the project’s significant impacts to less-than-significant levels.

RMM attorneys Jim Moose, Tiffany Wright, and Laura Harris represented the Real Party in Interest in the case.

(Laura M. Harris)