Communities for Better Env. V. Scaqmd
| Decision Date | 18 December 2007 |
| Docket Number | No. B193500.,B193500. |
| Citation | 158 Cal.App.4th 1336,71 Cal.Rptr.3d 7 |
| Court | California Court of Appeals Court of Appeals |
| Parties | COMMUNITIES FOR A BETTER ENVIRONMENT et al., Plaintiffs and Appellants, v. SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT et al., Defendants and Respondents; ConocoPhillips Company, Real Party in Interest and Respondent. Carlos Valdez et al., Plaintiffs and Appellants, v. South Coast Air Quality Management District, Defendant and Respondent; ConocoPhillips Company, Real Party in Interest and Respondent. |
Communities for a Better Environment, Adrienne L. Bloch and Shana Lazerow, Oakland, for Plaintiffs and Appellants Communities for a Better Environment.
Adams Broadwell Joseph & Cardozo, Marc D. Joseph, Richard T. Drury, San Francisco, for Plaintiffs and Appellants Carlos Valdez et al.
Woodruff, Spradlin & Smart, Bradley R. Hogin, Orange, Edward L. Bertrand; South Coast AQMD, Kurt R. Wiese and Barbara Baird, Diamond Bar, for Defendant and Respondent South Coast Air Quality Management District.
Weston Benshoof Rochefort Rubalcava & MacCuish, Ward L. Benshoof, Jocelyn D. Thompson, Los Angeles; Cox Castle & Nicholson and Michael H. Zischke, San Francisco, for Real Party in Interest and Respondent.
Center on Race Poverty and the Environment and Luke Cole, San Francisco, for Amici Curiae, in support of Plaintiffs and Appellants Communities for a Better Environment and Carlos Valdez et al.
for Amicus Curiae State of California, in support of Plaintiffs and "Appellants Carlos Valdez et al.
Plaintiffs and appellants Communities for a Better Environment, Carlos Valdez, Southern California Pipe Trades District Council No. 16 and Steamfitters and Pipefitters Local 250 appeal from a judgment entered against them in their actions against defendant and respondent the South Coast Air Quality Management District (SCAQMD) and real party in interest and respondent ConocoPhillips Company (ConocoPhillips). The dispute concerned the potential environmental impacts resulting from a project enabling ConocoPhillips to produce ultra 16w sulfur diesel. Appellants' primary contentions are that the SCAQMD abused its discretion in allowing a permit for the project to be issued without the preparation of an environmental impact report and without review pursuant to a regulation implementing a federal level of review.
We affirm in part and reverse in part. We conclude that the SCAQMD abused its discretion in issuing a negative declaration for the diesel fuel manufacturing project at issue because appellants offered substantial evidence supporting a fair argument that the project's nitrogen dioxide emissions may have a significant effect on the environment. In finding no significant effect, the SCAQMD improperly relied on a baseline level of permitted emissions which did not reflect existing physical conditions. In all other respects, the SCAQMD properly exercised its discretion in concluding that the project would not have a significant adverse environmental impact. The SCAQMD also properly declined to apply a local regulation to evaluate the project's permit, as the regulation was ineffective at the time the SCAQMD issued its permit.
The Parties.
Appellant Carlos Valdez resides in Wilmington near the ConocoPhillips refinery. Appellants the Southern California Pipe Trades District Council 16 and the Steamfitters & Pipefitters Local 250 are labor organizations who have many members who live and/or work in Wilmington and throughout the South Coast Air Basin. Appellant Communities for a Better Environment is a nonprofit membership organization with two offices in California. For approximately 25 years, it has been active in California air quality issues; its goals include protecting and enhancing the environment and public health by reducing air pollution in California's urban areas.
Respondent the SCAQMD is the agency principally responsible for comprehensive, non-vehicular air pollution control in the South Coast Air Basin, an area that includes Orange County and the non-desert portions of Los Angeles, Riverside and San Bernardino Counties. (Health & Saf. Code, §§ 40000, 40410; Cal.Code Regs., tit. 17, § 60104.) Pursuant to federal and state law, the SCAQMD is responsible for adopting an air quality management plan (AQMP) that identifies the air pollution control measures and emission reductions from existing sources that are necessary for compliance with federal and state ambient air quality standards. (See 42 U.S.C. § 7410; Health & Saf.Code, § 40460.) The SCAQMD is authorized to adopt rules and regulations to carry out the AQMP. (Health & Saf.Code, § 40440.)
Respondent and real party in interest ConocoPhillips is the largest petroleum refiner in the United States. ConocoPhillips' Los Angeles Refinery (Refinery) operates at two different sites in the South Coast Air Basin—the Wilmington plant and the Carson plant. The Wilmington plant consists of approximately 400 acres bordering commercial, recreational and residential areas. It produces a variety of products including gasoline, jet fuel, diesel fuel, petroleum gases, sulfuric acid and sulfur.
Diesel Fuel Regulations.
In January 2001, the United States Environmental Protection Agency (EPA) published rules on diesel fuels standards requiring that by June 1, 2006 refiners must begin selling highway diesel fuel meeting a maximum sulfur standard of 15 parts per million by weight (ppmw). (40 C.F.R. § 80.) This deadline corresponded with the EPA requirement that by 2007 all on-road, diesel-fueled vehicles be equipped to run on Ultra-Low Sulfur Diesel (ULSD) fuel. Before the adoption of these rules, most California diesel fuel contained an average of 140 ppmw of sulfur.
Even before the adoption of the EPA rule, the SCAQMD's Rule 431.2 (Sulfur Content of Liquid Fuels) was amended on September 15, 2000 to require a reduction in diesel fuel sulfur content to 15 ppmw by mid-2006.1 Subsequently, in 2003 the CARB amended California's diesel fuel regulations to comport with the low sulfur limit imposed by federal and local rules. The 15 ppmw requirement was also reflected in the state's AQMP. The diesel fuel sulfur content changes were designed to reduce the harmful environmental effects resulting from emissions of sulfur oxides (SOx), particulate matter (PM), nitrogen oxides (NOx) and other toxins from diesel-fueled motor vehicles.
In order to comply with federally and state mandated ULSD specifications, the Refinery proposed to modify its existing Diesel Hydrotreating Unit U-90 at the Wilmington plant (ULSD project). The ULSD project involved physical modifications primarily to the process facility at the Wilmington plant, which already produced low sulfur diesel, and minor control system improvements at the Carson plant. The two major components of the ULSD project were to: "(1) revamp the Midbarrel Hydrotreater Unit 90 [ (hydrotreater)] to decrease the hydrotreating reaction space velocity to meet the required diesel sulfur level; and (2) modify the midbarrel handling and logistics to segregate diesel from higher sulfur jet fuel."2 The proposed modifications did not increase the Refinery's diesel production.
Refinery Permit.
Beginning in 1994, the SCAQMD developed the Regional Clean Air Initiative Market (RECLAIM) program, a marketbased system of controlling the emission of NOx and SOx, and the Refinery has operated pursuant to a RECLAIM permit since that time. (See Health & Saf.Code, § 39616.) In contrast to traditional "command-and-control" regulations which set specific limits on each piece of equipment and each process emitting air pollution, the RECLAIM program set a factory-wide pollution limit for each business and permitted the business to determine what equipment, processes and materials it would employ to meet that limit. (See generally Alliance of Small Emitters/'Metals Industry v. South Coast Air Quality Management Dist. (1997) 60 Cal.App.4th 55, 57-60, 70 Cal.Rptr.2d 54 [describing the RECLAIM program].) The RECLAIM program also permitted businesses that reduced emissions more than required to sell their excess emissions reductions to other businesses. Importantly, the RECLAIM program required that allowable emissions from all participating businesses be reduced each year.
The Refinery's RECLAIM permit specified annual allocations of NOx and SOx that were established on the basis of actual historical emissions and thereafter declined each year. It covered the combined emissions from the hundreds of pieces of Refinery equipment that emitted or had the potential to emit or control air contaminants. Issued in 1994, the Refinery's RCLAIM permit allowed the Refinery to emit up to 8,318 pounds per day (ppd) of NOx—a figure based on the Refinery's 1994 emission level. As of 2003, the Refinery's NOx emission allocation had declined to 2,343 ppd. But under the RECLAIM program, the Refinery was still allowed to emit up to its initial allocation of 8,318 ppd so long as it purchased a corresponding amount of RECLAIM trading credits from another facility, that had reduced its emissions below its permitted RECLAIM level.
The SCAQMD's Environmental Review of the Project.
Negative Declaration.
As required by law, in December 2003, ConocoPhillips submitted its application for a permit to the SCAQMD. It requested that the permit be handled in accordance with a rule providing for express permit processing to enable a permit to be issued by August 2004. As required by the California Environmental Quality Act (CEQA), after receiving the permit application the SCAQMD undertook an initial study to determine the environmental impacts of the ULSD project. (Pub. Resources Code, § 21080(a).)
In January 2004, the SCAQMD, as the lead agency for the ULSD project,3 issued a draft negative declaration for the project, finding that...
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