In Communities for a Better Environment v. South Coast Air Quality Management Dist. (2020) 2020 Cal.App.LEXIS 285, the Second District Court of Appeal denied a citizen group’s appeal of the trial court’s judgment rejecting their challenge to Tesoro’s oil refinery project in Los Angeles County.
The Los Angeles Refinery Integration and Compliance Project (Project) involves improving the integration of two adjacent Tesoro oil refining facilities in Carson and Wilmington. The Project would increase Tesoro’s flexibility in altering the ratio of outputs, such as gasoline and jet fuel, and would ensure compliance with air quality regulations. Primarily, the Project would reduce pollutant emissions from “burners” which heat petroleum during production. The Project would also shut down the Wilmington Fluid Catalytic Cracking Unit, a major pollution source which converts heavy hydrocarbons into lighter ones; install new pipelines; modify equipment; install new storage tanks; and change the thermal operating limit of a heater in the Wilmington facility. Additionally, the Project upwardly adjusts operating heat limits and permit ranges to match industry standards. Preliminarily, the Court noted that the heat limits and permit ranges would result in no physical changes to the Wilmington heater or other hardware, though it would potentially allow for the processing of a heavier blend of crude oil or increase throughput by 6,000 barrels per day—but not both.
In September 2014, the South Coast Air Quality Management District (SCAQMD) issued an Initial Study and NOP on the Project. In March 2016, SCAQMD circulated an approximately 1,700-page DEIR for public comment and extended the public review period to 94 days (49 days over the statutorily required 45-day circulation period). SCAQMD received over 2,000 comments on the report; the vast majority of which were positive. Communities for a Better Environment (Petitioner) submitted over a thousand pages of comments on the Project, to which SCAQMD responded. Following certification of the EIR, Petitioner filed suit, alleging that the Project EIR used the wrong baseline, failed to explain its estimated barrel per day increase, and failed to disclose the existing volume of crude oil the refinery processes as a whole or the refinery’s unused capacity. Petitioner also alleged that SCAQMD failed to obtain information about the pre-Project composition of crude oil that the refinery processes, merely finding the post-Project input would remain within the refinery’s “operating envelope.” The trial court rejected these arguments and denied the writ, and Petitioner timely appealed.
The Court found that the EIR used the appropriate baseline. SCAQMD relied on a near-peak (98th percentile) method by collecting information on the refinery’s worst air pollution emissions during a two-year period and excluded the top 2% of the data to remove “extreme and unrepresentative outliers.” The remaining data was used to compare actual pre-Project near-peak emissions with projected peak emissions due to Project activities. Petitioner argued for the use of an average-value baseline. SCAQMD rationalized that the near-peak baseline would measure and control the most significant Project-related health and pollution dangers. The Court held that substantial evidence supported SCAQMD’s baseline approach because the near-peak baseline matches the EPA’s baseline approach and because the baseline takes demand fluctuations into account. Petitioner argued that relying on the federal approach was misguided due to the differing purposes between federal regulations (which regulate air pollution) and CEQA’s baseline requirement (which, “is meant to establish pre-project conditions to compare with post-project operations”). The Court rejected this argument, acknowledged the benefits of following the EPA methodologies, and held that, because California’s environmental goals “to protect the public health and welfare” were “identical” to those of the EPA, the EPA’s methodologies were acceptable. The Court concluded that the EPA’s use of the near-peak baseline was substantial evidence validating SCAQMD’s use of the baseline here.
In analyzing air quality impacts, the EIR noted that the Project could allow the refinery to process an additional 6,000 barrels per day or process a slightly heavier crude oil blend. SCAQMD determined the worst-case analysis would focus on increased production, finding that the Project would not change the “fixed crude oil operating envelope.” Petitioner argued that SCAQMD failed to obtain information about pre-Project composition of crude oil refinery processes, instead focusing on the fact that crude oil input would remain within the refinery’s “operating envelope.” The Court rejected this argument, finding reliance on the crude oil operating envelope was appropriate because only a specific range of crude blends can be processed in the refinery. The Project would not change facilities upstream or downstream of the Coker to allow the refinery to process a different range of crude oil (in terms of hydrocarbon weight and sulfur content). The agency extensively analyzed whether the crude oil composition would change due to the Project, and the EIR disclosed why it was physically impossible for it to do so. This obviated the need to disclose further detail regarding crude oil composition. Since the EIR properly disclosed and analyzed whether crude oil composition would change, the Court found the EIR provided a thorough, consistent, stable, and logical explanation as to why the Coker would not process a heavier slate of crude as a result of the Project and rejected Petitioner’s claim.
Petitioner claimed that, without knowing exactly how SCAQMD calculated their 6,000-barrels a day figure, CEQA’s informational purpose would be undermined. The Court found Petitioner forfeited this argument because it failed to raise the exact issue before the agency during the administrative process.
Petitioner argued that the EIR failed to disclose the existing volume of crude oil the refinery processes as a whole and the refinery’s unused capacity. The Court held that the EIR adequately explained why the Project would not increase the refinery’s overall throughput due to physical limitations associated with upstream and downstream facilities. The Court additionally noted that the assumed 6,000 barrels per day increase would be offset by a 10,000 barrels per day decrease of vacuum gas oil the refinery previously used as feedstock for the Wilmington Cracking Unit—resulting in a net decrease in overall refinery throughput. The Court similarly dismissed Petitioner’s unused capacity claim by summarily stating there was no need for the EIR to include data on the difference between peak and average capacities because substantial evidence supported the EIR’s analysis.
The dissenting opinion on the baseline issue found substantial evidence did not support SCAQMD’s use of the 98th percentile “near peak” baseline. It cited Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310, in reiterating “that the impacts of a proposed project are ordinarily to be compared to the actual environmental conditions existing at the time of CEQA analysis, rather than to allowable conditions defined by a plan or regulatory framework.” (Id. at p. 321.) It did not find the EPA’s approach material to what is required under California law. The dissent further stated that the near-peak baseline failed to provide a realistic baseline of existing conditions as required by CEQA Guidelines section 15125 because it only reflected pollution levels occurring on the 15 worst days out of a 730-day review period. As a result, the baseline provided an inaccurate or diluted picture of the Project’s future impacts to the public and decisionmakers. The dissent stated SCAQMD “should have analyzed environmental conditions representing the entire period, or explained in the EIR why this was not possible, realistic, or informative.”
The opinion reinforces the deference owed to agencies in selecting a baseline if supported by substantial evidence and reiterates there is no such thing as a “normal” baseline.