On April 20, 2022, the Bay Area Air Quality Management District (BAAQMD) adopted changes to its thresholds for evaluating the significance of climate impacts from land use projects and plans under CEQA. These thresholds of significance changes are important because they can be used by agencies as guidelines for determining climate impacts from projects subject
Last month, the Second Appellate District upheld the South Coast Air Quality Management District’s (“Air District”) Environmental Impact Report (“EIR”), which the Air District prepared to analyze the environmental impacts of a refinery project that was intended to increase compliance and help reduce air pollution. Communities for a Better Environment v. So. Coast Air Quality Mgmt. Dist., Case No. B294732 (Apr. 7, 2020). The project applicant owns and operates two adjacent oil refining facilities in Southern California, and sought to improve the integration of both facilities to allow flexibility in product outputs, which also increased the refinery’s compliance with air regulations, and thus helped reduce air pollutants. As explained in greater detail below, the decision is particularly noteworthy because the court appears to have expanded the “baseline” analysis tied to air emissions, which is used to measure pre-project vs. post-project impacts to the existing environment.
The Air District’s review of the underlying project took three years and the Air District’s Draft EIR was the subject of over 2,000 public comments, which included comments totaling 1,112 pages from the plaintiff that later challenged the project. Significantly, 1,798 comments or 85% supported the project—likely because the EIR found that the main environmental impact of the project would be to reduce air pollution; and the Air District’s Final EIR was lengthy and robust, containing 6,075 pages of public comments alone.
In a March 2018 decision, the First Appellate District examined several CEQA issues pertinent to petroleum refining and hazardous materials transport. In Rodeo Citizens Association v. County of Contra Costa, the appeals court affirmed several findings of the lower court, dismissing challenges to the environmental impact report (“EIR”) prepared for a propane and butane recovery project at the Phillips 66 refinery in Rodeo. (The appeals court did not review the trial court’s order to the county to set aside the certification of the EIR and correct several other air quality related issues.) The appeals court found the risk of rail transportation of propane and butane was appropriately measured against the baseline of existing risks; the project description did not mask plans for the refinery to alter its crude oil feedstock; and that greenhouse gas impacts from downstream uses of petroleum products need not be evaluated.
On July 17, 2017 the California legislature approved an extension of the state’s greenhouse gas cap-and-trade program from 2020 to 2030. Cap-and-trade is a key program in the state’s efforts to meets its 2030 greenhouse gas reduction goals of 40% below 1990 levels covering emissions from industrial facilities and electricity and natural gas suppliers.
Governor Brown and legislative leaders have worked for several months on a package of bills that could achieve a 2/3 majority in the legislature, insulating the cap-and-trade program from additional challenges under Proposition 13 and providing the state with considerable discretion in spending revenues generated by the program. This grand bargain includes a cap on the price of emission allowances sold under the program, measures to reduce emissions of non-greenhouse gas pollutants from industrial facilities and refineries, an increase in maximum penalty for violations of state air rules, and tax credits for energy producers. In extending cap-and-trade, the legislation also blocks an effort by the Bay Area Air Quality Management District (“BAAQMD”) to cap greenhouse gas emissions from Bay Area refineries.
Today, in an opinion authored by Justice Liu, the California Supreme Court ruled that the greenhouse gas analysis in an environmental impact report (“EIR”) prepared for the San Diego Association of Government’s (“SANDAG”) regional transportation plan (“RTP”) did not violate the California Environmental Quality Act (“CEQA”), but did little to resolve uncertainties in addressing climate change issues under CEQA. As we previewed in our May discussion of the oral argument in this case, Cleveland National Forest Foundation v. San Diego Association of Governments, the majority of the Court found that SANDAG’s discussion of the impacts of greenhouse gas emissions was adequate given the state of science and guidance, at least at the time of the issuance of the RTP in 2011. The Supreme Court cautioned, however, that this EIR should not be considered a template for future projects as developing science and regulations will likely provide further guidance on this issue.
In recent weeks, California appellate courts issued two decisions regarding California Air Resources Board (CARB) programs implemented under AB32, the Global Warming Solutions Act, with mixed results. The first decision upheld the legality of a key element of CARB’s cap-and-trade program, the auction of emission credits. In that case, the Third Appellate District rejected an industry challenge and found that the auctions are within the authority granted to CARB by AB32 and are not an illegal tax. In the second case, the Fifth Appellate District delivered a setback—the second in that court—for CARB’s Low Carbon Fuel Standard (LCFS), finding the agency failed under the California Environmental Quality Act (CEQA) to adequately analyze the potential effects of NOx emissions resulting from the increased use of biofuels mandated by the LCFS. CARB was first ordered by the court to correct this CEQA violation in a 2013 writ of mandate, but the agency failed to do so in its 2015 re-adoption of the LCFS. The court, noting the environmental benefits of this program, however, did not invalidate the LCFS and only froze the required standards at 2017 levels until CARB corrects the CEQA deficiencies. These decisions do little to clarify the muddy waters around how agencies should analyze greenhouse gas emissions under CEQA, as that analysis is inextricably intertwined with the effectiveness of the State’s greenhouse gas regulatory programs.
Guest author Darrin Gambelin, a Downey Brand associate, contributes today’s post.
On August 1, The White House Council on Environmental Quality (CEQ) issued its Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews (Guidance), which provides federal agencies with a framework for analysis of greenhouse gas emissions and climate change in connection with environmental review under the National Environmental Policy Act (NEPA). This is a significant step in the developing law of climate impact analysis, as state and federal agencies alike continue to struggle to measure, analyze, and mitigate for localized, incremental contributions to this global problem.
The Guidance advises federal agencies to examine both the effects of the proposed project on climate change and the effects of climate change on the project. The guidance does not apply retroactively to projects with a completed NEPA review, but CEQ encourages agencies to adopt these procedures for projects currently under review. As guidance, the policies within are not binding, but in practice agencies generally defer to CEQ; so, applicants can expect federal agencies to apply the new policies to projects moving forward.