The CEQA “baseline” rules have received a lot of judicial attention in the last several years, and rightly so.  The baseline or “environmental setting,” is the fundamental “benchmark” from which a project’s environmental impacts are measured.  The baseline also determines the scope of the “reasonable range of [project] alternatives” required to be considered in an EIR, since “alternatives shall be limited to ones that avoid or substantially lessen any of the significant effects of the project.”  (14 Cal. Code Regs., § 15126.6(f), emph. added.)  By definition, adverse environmental conditions already existing as part of the baseline are not significant impacts of the proposed project. 

Discretionary permit, contract and lease renewals have always presented problematic baseline issues where existing conditions were never subject to CEQA review.  The First District recently brought further clarity to the baseline setting rules in such contexts, as well as the public trust doctrine, in its published opinion in Citizens for East Shore Parks v. California State Lands Commission (Chevron U.S.A., RPI) (1/27/12 Opn. Mod. on den. rhg.) ___ Cal.App.4th ___.  In affirming the trial court’s judgment denying a writ of mandate, the Court upheld the State Lands Commission’s approval of a 30-year lease renewal allowing Chevron U.S.A., Inc. to continue operating a marine terminal in San Francisco Bay waters near Chevron’s Richmond refinery.  Ships dock at the terminal to off-load crude oil to be processed at the privately-owned, on-shore refinery, and to load refined products, both through a pipeline system connecting the marine terminal to the refinery.  The marine terminal and refinery had existed since 1902; Chevron’s predecessor (Standard Oil) bought the refinery and began operating it and the terminal in 1905.  Various modifications were made in the 1940’s and 1970’s to improve the terminal, and in the 2000’s Chevron completed a major seismic upgrade and electrical system revamp.

In 1947, the Lands Commission granted Standard Oil a 50-year lease, which Chevron assumed in 1976, and which expired in 1997, after which Chevron operated the terminal on a holdover basis until – after a nearly 9-year CEQA review process – the Lands Commission approved the 30-year lease renewal and a related EIR in 2009.  Plaintiffs sued challenging the renewal and EIR on CEQA and public trust grounds.  They argued that the CEQA baseline used by the Commission – which included both the existing marine terminal structure and Chevron’s existing operations there – was illegal and that, among other flaws, the EIR failed to consider the alternative of removing the causeway and burying the pipeline connecting the terminal and refinery.  In affirming the trial court’s judgment rejecting all of plaintiffs’ arguments, the Court of Appeal clarified numerous significant principles drawn from the CEQA baseline jurisprudence...

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