California Court of Appeal Approves Environmental Analysis for Oil Refinery Propane Recovery Project

by Latham & Watkins LLP
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Rodeo Citzens Ass’n v. County of Contra Costa, California Court of Appeal, First Appellate District, Division Three, Case No. A151184 (March 20, 2018).

CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In a published opinion issued March 20, 2018, Rodeo Citizens v. County of Contra Costa, the California Court of Appeal affirmed the trial court’s issuance of a writ of mandate requiring the County of Contra Costa to set aside the certification of the environmental impact report (EIR) and approval of the land use permit for the Propane Recovery Project (Project) at an oil refinery in Rodeo, California. In summary, the court determined:

  • A project description need not address potential changes in the use of a facility that are unrelated to the project under consideration.
  • CEQA does not require speculation regarding downstream greenhouse gas (GHG) emissions that cannot be reasonably feasibly quantified.

The petitioner, Rodeo Citizens Association (Petitioner) had filed a petition for writ of mandate seeking to invalidate the County’s certification of the final EIR and approval of the Project’s land use permit. The trial court found certain deficiencies in the air quality section of the Recirculated Final EIR (RFEIR) and issued a writ of mandate requiring reconsideration of that section, but rejected Petitioner’s remaining arguments. Despite the trial court’s issuance of the writ, Petitioner appealed the trial court’s decision rejecting Petitioner’s additional arguments that the project description and the analysis of GHG emissions and environmental hazards fail to comply with CEQA. The court found no error in the trial court’s conclusions and affirmed the peremptory writ as issued.

Background for Appeal

In January 2015, the County published the RFEIR for the Project to address air and health issues raised by the Bay Area Air Quality Management District prior to the board’s appeal hearing on the Final EIR. On February 3, 2015, the County certified the RFEIR and approved a land use permit and a mitigation monitoring reporting program for the Project. On March 5, 2015, Petitioner filed a petition for writ of mandate challenging the County’s approval of the Project and certification of the RFEIR. The trial court issued a writ of mandate requiring reconsideration of the air quality section of the RFEIR but rejected Petitioner’s remaining arguments.

Accurate and Adequate Project Description

Petitioner argued the RFEIR project description was defective because it failed to disclose that the Project would involve more frequent processing of nontraditional crudes containing higher levels of propane, butane, and contaminants that will result in higher emissions of air pollution during the refining processes. CEQA requires an accurate, stable, and finite project description. The court found that substantial evidence supported the County’s conclusion that the Project was unrelated to a potential change in crude oil feedstock used at the refinery and would not increase its present capacity to refine heavier crude oils. The record showed that proposed Project would not affect the types and/or quantities of crude oil feedstocks that can be processed at the refinery, which is currently able to process a wide variety of crude oil feedstocks. Therefore, the County did not expressly or implicitly approve a change in crude oil feedstocks by approving the Project. Thus, the court upheld the trial court’s conclusion that the project description in the RFEIR was accurate and adequate.

Speculative GHG Emissions

Petitioner next argued that the RFEIR was inadequate because it failed to consider GHG emissions resulting from the combustion of the propane and butane that the Project would capture and sell to downstream users. The RFEIR stated that substantial speculation would be required to estimate the emissions consequences of the use of propane and butane because of various potential post-sale applications. These applications include non-fuel uses and the replacement of other fuels that generate higher GHG emissions when combusted.

An EIR is required to evaluate a particular environmental impact only to the extent that doing so is “reasonably feasible.” According to the court, due to the uncertainty regarding the end uses and the volatile nature of the propane and butane market, the County reasonably concluded that quantification of downstream emissions would be speculative and thus no further analysis was required. The court also found support for the County’s conclusion in the Bay Area Air Quality Management District’s expressed satisfaction with how the Recirculated Draft EIR (RDEIR) addressed the issue, given the District’s substantial expertise in air emissions and that the District had raised the concern in its comment on the FEIR. Thus, the court held that the County’s failure to quantify the GHG emissions from the downstream uses of the recovered propane and butane did not violate CEQA.

Sufficient Analysis of Public and Environmental Hazard Impacts

Finally, Petitioner challenged the RFEIR’s findings that the Project would result in less than significant impacts on the public and the environment from the handling and transportation of hazardous materials. To analyze these potential impacts, the RFEIR evaluated whether the Project would create a significant hazard to the public or environment through the routine transport of hazardous materials or through the reasonably foreseeable upset and accident conditions involving the release of hazardous materials into the environment. Further, the RFEIR evaluated whether the Project would emit hazardous emissions or handle hazardous or acutely hazardous materials within one-quarter mile of an existing or proposed school.

Petitioner argued that the RFEIR omitted the fact that a child care center is located less than 500 feet from the rail lines on which the propane and butane would be transported from the refinery. The court noted the County’s contention that Petitioner’s argument was arguably barred because it was not raised in the administrative proceedings. However, the court found the fact that the potential hazards posed by the rail transportation of the propane and butane were analyzed separately to be more important. While the RFEIR did not specifically address how the Project’s transport of hazardous materials might impact the child care center, the court noted that the RFEIR’s analysis of the risk zone for rail transport under the proposed project extended only approximately 262 feet from the railroad tracks — after the risk of highly improbable boiling liquid expanding vapor explosion was excluded.

Petitioner also argued that the RFEIR failed to analyze the Project’s contribution to the cumulative risk of rail-related accidents. Agencies’ decisions regarding the inclusion of information in the cumulative impacts analysis are reviewed under an abuse of discretion standard. The primary determination is whether including the projects was reasonable and practical and whether, without their inclusion, the cumulative impacts’ severity and significance were reflected adequately.

Petitioner had submitted a comment to the RDEIR questioning the omission of any cumulative impacts analysis relating to transportation risks. In its response to comments, the County explained that most of the related projects cited by Petitioner were located some distance from the Project and involve transport or refining crude to some degree, rather than rail transport of propane. County argued that comparing hazards of transporting propane and other types of hazardous substances cannot be meaningfully done. On appeal, Petitioner argued that CEQA does not require a nexus between projects or that they be of a similar type to be included in cumulative impact analyses. Rather, petitioner argued, CEQA only asks whether projects will cause similar effects — such as the risk of train derailment — that might be individually insignificant but cumulatively considerable. However, the court found the County’s explanation of why a cumulative analysis for transportation hazards was not included to be not unreasonable.

Finally, Petitioner argued that the RFEIR improperly determined the Project’s hazard impacts would not be significant by comparing them to existing hazards rather than the existing physical environment, failed to disclose that the Project would increase hazards within existing hazard zones, and therefore did not include any mitigation to reduce the impact. However, the court found that the DEIR evaluated the significance of the Project’s impacts without reference to existing risks posed by operation of the refinery and determined that the potential impacts were less than significant.

Accordingly, the court found no error in the analysis of hazard impacts in the RFEIR.

Disposition

Accordingly, the court affirmed the trial court’s judgment.

  • Opinion by Justice Stuart R. Pollak with Presiding Justice William R. McGuiness and Justice Martin J. Jenkins concurring.
  • Trial Court: Superior Court of Contra Costa County, Case Nos. MSN15-0301, MSN15-0345, MSN15-0381, Judge Barry P. Goode.

[i] California court decisions on California Environmental Quality Act (CEQA) related cases can impact business not only in California, but more broadly in other US jurisdictions (e.g., under the US National Environmental Policy Act [NEPA], though statutory provisions may differ). Latham’s case summary series provides a comprehensive archive of both published and unpublished cases, in order to track judicial interpretations of CEQA and new legal developments.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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