In Association of Irritated Residents v. Kern County Bd. of Supervisors (2017) 17 Cal.App.5th 708, the Fifth District Court of Appeal reversed the trial court’s decision upholding the County of Kern’s certification of an environmental impact report (EIR) and approval of a project to modify an oil refinery in Bakersfield, including the expansion of the existing rail, transfer and storage facilities, so it can unload two unit trains (104 cars) of crude oil per day, equating to 150,000 barrels.
On appeal, Plaintiffs Association of Irritated Residents argued that the EIR failed to comply with CEQA because it (1) erroneously used the refinery’s operational volume from 2007 as the baseline instead of the conditions existing in 2013 when the notice of preparation of the EIR was published; (2) incorrectly relied upon the refinery’s participation in California’s cap-and-trade program to conclude the project’s greenhouse gas emissions (GHG) would be less than significant; and (3) underestimated and failed to fully describe the project’s rail transport impacts, including the risk of a rail accident causing a release of hazardous materials and the environmental impacts of off-site rail activity. The court rejected Plaintiffs’ first two arguments but found in favor of Plaintiffs on their final argument.
With respect to Plaintiffs’ first argument, that the EIR used an improper environmental baseline for refinery operations, the court held that the decision to use refinery operation data from 2007 was supported by substantial evidence including the refinery’s history of fluctuating operations and was consistent with the Supreme Court’s holding in Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310. In reaching its holding, the court distinguished Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439 because it concerned use of a “future” baseline and not a lead agency’s discretion in measuring an existing conditions baseline. In other words, the appellate court held that the unique burden the Supreme Court imposed on agencies using projected future conditions as a baseline—identification of substantial evidence that using an existing conditions baseline would be uninformative or misleading—does not apply in “historical baseline” cases.
As to Plaintiffs’ second argument, the EIR stated the project’s GHG emissions were less than significant because (1) the project is consistent with CARB’s climate change scoping plan and the cap-and-trade program and (2) GHG reductions achieved under cap-and-trade, federal renewable fuels standard, and displacement of fuel transport trucks exceed the 29 percent greenhouse gas emissions reductions target recommended by the Air District. Plaintiffs argued that the EIR’s conclusion was erroneous because compliance with California’s cap-and-trade regulation will not actually reduce greenhouse gas emissions since allowances are authorizations to emit greenhouse gases. In rejecting Plaintiffs’ second argument, the court held that California’s cap-and-trade program constituted “regulations … adopted to implement a statewide … plan for the reduction of mitigation of greenhouse gas emissions” pursuant to CEQA Guidelines section 15064.4, subdivision (b)(3). Accordingly, the court stated that a lead agency has the discretion to conclude that a project’s GHG emissions will have a less than significant effect on the environment based on the project’s compliance with the cap-and-trade program. Thus, the court concluded the EIR’s GHG analysis complied with CEQA.
Finally, the court concluded that the EIR’s rail transport impact analysis included two flaws. First, in an unpublished section of the opinion, the court held the analysis included factual errors in its description of federal railroad safety data because it erroneously used the total number of “accident/incidents” reported for a 10-year period as the number of “train accidents.” As a result of this error, the court concluded that the EIR understated the risk of release of hazardous materials in the event of accident during the rail transportation of crude oil to the refinery by fivefold. Next, in a published portion of the opinion, the court also held that the EIR erroneously concluded that the Interstate Commerce Commission Termination Act of 1995 (ICCTA; 49 U.S.C. § 10101 et seq.) preempted CEQA review of certain environmental impacts of off-site rail activities. While the court acknowledged that the ICCTA may preempt some mitigation measures that may otherwise be required by CEQA, the ICCTA did not preclude the EIR from evaluating and disclosing reasonably foreseeable environmental effects that may be caused by the off-site rail activities associated with the project and addressing the feasibility of possible mitigation measures. As a result of these errors, the appellate court directed the trial court to enter a new order granting the petition for writ of mandate.
While environmental baseline and GHG emission significance determinations are subject to some degree of deference, factual errors and misapplication of ICCTA preemption principles can be fatal to a finding of an EIR’s legal sufficiency and may open project leaders to valid writs of mandate.