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Center for Biological Diversity v. Department of Conservation, etc. (2019) 36 Cal.App.5th 210

The Legislature passed Senate Bill 4 (SB 4) in 2013, requiring the Department of Conservation, Division of Oil, Gas, and Geothermal Resources (Department) to study the environmental effects of fracking and other types of oil and gas well stimulation in California. Specifically, the statute requires the preparation of an EIR pursuant to CEQA to provide the public with detailed information regarding any potential environmental impacts of well stimulation in the state. The Department prepared and certified a 5,500-page EIR and circulated it for an extended period of 62 days. The certification statement noted that the EIR was potentially unique due to a lack of any accompanying “proposed project,” such as fracking activities at particular wells. In part, the EIR provided a programmatic-level analysis of three oil and gas sites in the state. The certification stated, “‘well stimulation in the state,’ is not a pending ‘project’ in any ordinary sense.” The EIR also addressed a multitude of activities across the state, some of which had been ongoing for decades when SB 4 was passed.

Center for Biological Diversity (Petitioners) filed a writ of mandate challenging the adequacy of the EIR under SB 4 and CEQA. The trial court ruled that Petitioners’ CEQA claim was not ripe and sustained the Department’s demurrer on the basis that there was no project before the Department requiring approval.

Petitioners appealed to the Third District Court of Appeal. They preliminarily argued that the EIR defined “well stimulation in the state” as the project being analyzed. The Court held that this argument failed to address the ripeness issue raised by the trial court—e.g., the EIR did not describe a project requiring approval. Petitioners claimed that the Department was carrying out a “program” of regulating, overseeing, and permitting well stimulation, in reliance on the EIR, and that this regulatory “program” was itself a “project” within the meaning of CEQA. The Court rejected this argument as well. The Department’s regulation of well stimulation activities does not imply that the Department would directly undertake such activities. Because the Department would not directly undertake the activities, there was no project pursuant to Public Resources Code section 21065, subdivision (a). The Court concluded that the Department created the EIR in response to neither a proposed project, nor to a regulatory program constituting a project.

Petitioners alternatively argued that the Department violated both SB 4 and CEQA by failing to (1) adequately consider a fracking study available at the time the EIR was created; (2) analyze indirect impacts of well stimulation treatments; (3) adequately analyze certain area-specific well stimulation treatments; (4) adopt enforceable mitigation measures; and (5) make findings and adopt a mitigation monitoring and reporting plan.

Before reaching the merits, in the absence of any authority directly on point to assist their review, the Court analyzed the reasoning established in analogous “program” EIR cases. The Court found (1) program EIRs may defer discussion of site-specific impacts and mitigation measures to later project EIRs where the impacts or mitigation measures are not determined by first-tier approval, but are specific to later phases (2) the sufficiency of a program EIR must be reviewed in light of what is reasonably feasible, given the nature and scope of the project, and (3) when considering a challenge to a program EIR, courts must focus on whether the EIR includes enough detail to enable those who did not participate in its preparation to understand and meaningfully consider the issues raised in it.

Turning to Petitioners’ first argument, the Court found that the Department did not violate SB 4 or CEQA by failing to incorporate the fracking study into the EIR. The Court held that while SB 4 called for a staggered timeline which could allow for the study to be included in the EIR, nothing in SB 4 suggests that the Legislature intended to link the documents. The Court postulated that the Legislature could have intended for independent production of the fracking study and EIR to effectuate SB 4’s remedial purposes of increasing the overall level of existing public information regarding well stimulation treatments.

The Court addressed the second issue, finding the Department adequately addressed indirect impacts of well stimulation treatments. Petitioners contended that the EIR failed to analyze emissions caused by pumping and transporting oil and gas, traffic, and wastewater produced from stimulated wells. The Court found that the Department was not required to analyze these indirect impacts, but nonetheless did so on a programmatic basis, properly deferring in-depth analysis to later project-level EIRs. Nothing in SB 4 requires analysis of indirect impacts caused by additional oil and gas production made possible by well stimulation treatments. The Court refused to adopt a sweeping mandate implied from SB 4’s instruction to prepare an EIR “pursuant to CEQA.” Instead, the Court reiterated that the purpose of SB 4 was to address the dearth of information about the environmental effects of well stimulation treatments in particular, not oil and gas production in general.

The Center advanced their third and fourth arguments by alleging the Department failed to propose enforceable mitigation measures and failed to mitigate direct impacts of well stimulation treatments. The Court noted that they were “inclined to agree” with the Department that a lead agency has no obligation to adopt formal mitigation measures prior to the approval of a project, but did not conclusively establish as such. Instead, the Court found the Department had committed to specific performance criteria to mitigate direct effects of well stimulation treatments through adoption of its Mitigation Policy Manual and reasonably concluded that potential mitigation measures to remedy indirect effects of well stimulation treatments were infeasible.

Finally, the Court found that the Department did not have to make findings or adopt a mitigation monitoring and reporting plan. CEQA requires findings and mitigation monitoring and reporting plans when an agency approves or carries out a project. As established, there was no project before the Department requiring approval, and the Department was not carrying out a program of well stimulation treatments in the state.

The Court concluded that the Department’s EIR had adequately disclosed the conclusions of the study and analyzed indirect impacts on a programmatic basis. The Court found that the Department properly deferred further analysis to project-level EIRs. The EIR was created in response to a legislative mandate designed to further understand the effects of fracking. The Court found the EIR adequate under adequate under SB 4 and CEQA.