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

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.

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.