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Posts Tagged ‘Oil Refinery’


First District Court of Appeal Finds Project Description, Downstream GHG Emissions Analysis, and Existing Train Hazards Analysis Sufficient, Upholds Oil Recovery Project RFEIR

Tuesday, March 20th, 2018

In Rodeo Citizens Association v. County of Contra Costa (2018) 22 Cal.App.5th 214, the First District Court of Appeal held the project description, greenhouse gas (GHG) emissions analysis, and hazard impact analyses for upgrades to an oil refinery project were sufficient under CEQA therefore, Contra Costa County (County) properly approved the project. Despite this, the trial court writ of mandate setting aside the project remained intact until certain air quality analyses were complete.

Phillips 66 Company (Phillips) applied for a permit to upgrade the facility and operations at an existing oil refinery propane recovery plant (Project). Specifically, the Project would add to and modify existing facilities to enable Phillips to recover butane and propane from its refinery and ship it by rail. After circulating the draft EIR and responding to comments, the County approved a recirculated final EIR (RFEIR).

Rodeo Citizens Association (Petitioners) challenged the approval on the grounds that the project description was inaccurate for failing to address future projects and imports, the analysis of cumulative impacts, air quality and GHG impacts were insufficient, and the RFEIR overlooked the increased risk of accidents from train derailments or explosions at project completion.

Relying on San Joaquin Raptor Rescue Center v. County of Merced (2007) 149 Cal.App.4th 645, Petitioners alleged the project approval was improper because the project description was not “accurate, stable, and finite” where Phillips executives had made public comments about future projects whose impacts would run seemingly contrary to the RFEIR. The Appellate Court held even if a project applicant’s statements indicate an anticipated or potential future change to a site, petitioners must also present evidence showing a connection between the project and any intended change. None of the statements established the future projects were dependent on a change or intended change in the proposed Project.

Petitioners also claimed that the project description and RFEIR were insufficient for failing to detail the Project’s environmental impacts from purported changes to the crude oil feedstock, specifically the refining of heavier oils. The Court found that the RFEIR laid out that the Project is not dependent on a change in feedstocks and the Project only plans to utilize existing steam without any additional imports or modifications to the refinery. Thus, substantial evidence in the record supported the conclusion that the Project was independent of any purported change in the crude oil feedstock used at the refinery and would not increase its present capacity to refine heavier oils.

The Court upheld the lead agency’s description of the Project and concluded that Petitioners failed to provide evidence that the lead agency’s approval of the Project inappropriately approved any potential future changes not included in the Project description.

Next, the Court found the GHG considerations detailed in the RFEIR were “reasonable” under the circumstances; environmental review documents may find a project’s contribution to GHG emissions will be less than cumulatively considerable if there is sufficient showing that the Project is part of the State’s solution to climate change. While Petitioners claimed that the RFEIR failed to consider GHG emissions resulting from the combustion of project-captured propane and butane sold to downstream users, such a claim misconstrued the situation. Phillips considered downstream users in the RFEIR but was unable to definitively pinpoint the buyers’ uses. Indeed, the Court highlighted, propane and butane are low-GHG emitting gasolines mostly used in place of high-GHG emitting gasolines therefore reducing overall GHG emissions. An agency’s inability to quantify all down-stream emissions from project-related activities does not compel the agency to conclude that the project creates a significant and detrimental contribution to GHG impacts. Any possible negative environmental impacts were too speculative for evaluation; investigating these possibilities were beyond the County and Phillips’ responsibilities.

Finally, the Court rejected Petitioners’ allegations that the RFEIR overlooked the increased risk of accidents from train derailments or explosions as a result of the Project. In the RFEIR, Phillips properly addressed significance of the Project’s impacts without reference to existing risks posed by operation of the refinery, reasonably determined that the potential impacts were less than significant, and underscored that comparative worst case scenario analyses may reasonably consider only those impacts that have moderate or high consequence of occurrence.

The Court affirmed the trial court holding on each of these issues.

Key Point:

Project descriptions are sufficient where not misleading or inaccurate. Greenhouse gas emission considerations under CEQA may be sufficient where the project emissions are downstream and evidence supports the project aligns with statewide solutions to climate change.

Fifth District Court of Appeal Examines EIR Sufficiency, Kern County Oil Refinery Project Upheld and Reversed in Part

Thursday, February 8th, 2018

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.

Key Point:

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.