Ctr. for Biological Diversity v. Dep't of Conservation

• Decision Date: 14 August 2018
• Docket Number: A149896
• Citation: 26 Cal.App.5th 161,236 Cal.Rptr.3d 729
• Parties: CENTER FOR BIOLOGICAL DIVERSITY, Plaintiff and Appellant, v. DEPARTMENT OF CONSERVATION, Defendant and Respondent; AERA Energy LLC et al., Interveners and Respondents.
• Court: California Court of Appeals Court of Appeals

26 Cal.App.5th 161

236 Cal.Rptr.3d 729

CENTER FOR BIOLOGICAL DIVERSITY, Plaintiff and Appellant,

v. DEPARTMENT OF CONSERVATION, Defendant and Respondent;AERA Energy LLC et al., Interveners and Respondents.

A149896

Court of Appeal, First District, Division 5, California.

Filed August 14, 2018

Clare Lakewood, Hollin Kretzmann, Vera Pardee, for plaintiff and appellant Center for Biological Diversity.

Xavier Becerra, Attorney General, Sacramento, John A. Saurenman, Senior Assistant Attorney General, Jennifer W. Rosenfeld, Acting Supervising Deputy Attorney General, Los Angeles, Baine P. Kerr, Deputy Attorney General for defendant and respondent California Department of Conservation, Division of Oil, Gas, and Geothermal Resources.

Gibson, Dunn & Crutcher LLP, Jeffrey D. Dintzer and Matthew C. Wickersham, Los Angeles, for intervener and respondent Aera Energy LLC.

Pillsbury Winthrop Shaw Pittmann LLP, Margaret Rosegay, Norman F. Carlin and Blaine I. Green, San Francisco, for intervener and respondent Western States Petroleum Association et al.

Jones, P.J.

The Center for Biological Diversity (Appellant) sought a writ of mandate directing the California Department of Conservation, Division of Oil, Gas, and Geothermal Resources (the Department) to order the immediate closure of oil and gas wells injecting fluids into certain underground aquifers. Appellant argued the Department had a mandatory duty to do so under the federal Safe Drinking Water Act (SDWA or the Act; 42 U.S.C. § 330f et seq. ), federal regulations promulgated pursuant to the Act, and a memorandum of agreement executed by the Department setting forth its responsibilities under the Act. The trial court denied the petition, and we affirm.

BACKGROUND

The Safe Drinking Water Act

"The SDWA establishes a federally mandated, state-administered regulatory scheme for the protection of drinking water." ( U.S. v. King (9th Cir. 2011) 660 F.3d 1071, 1077 ( King ).) The Act includes provisions to protect current or potential underground drinking water sources. ( 42 U.S.C. §§ 300h to 300h-8.) To this end, the Act directs the establishment of statewide programs to control underground injections (underground injection control programs, or UIC programs).¹ ( 42 U.S.C. § 300h-1.) All such programs "shall prohibit ... any underground injection in such State which is not authorized by a permit," and "shall require" permit applicants to show "that the underground injection will not endanger drinking water sources...." ( 42 U.S.C. §§ 300h, subd. (b)(1)(A)-(B), 300h-4, subd. (a).)²

Regulations promulgated pursuant to the Act by the United States Environmental Protection Agency (EPA) provide EPA "shall protect ... all aquifers and parts of aquifers^{[3 ]} which meet the definition of ‘underground source of drinking water’ ..., except to the extent there is an applicable aquifer exemption [and other exceptions not relevant here]." ( 40 C.F.R. § 144.7(a).) The regulations define "underground source of drinking water" broadly as an aquifer which either supplies a public water system or is large enough and pure enough to potentially supply a public water system in the future, and which has not been exempted by EPA. ( 40 C.F.R. § 144.3.)⁴ EPA may exempt an aquifer that otherwise meets the definition of an underground source of drinking water if it determines the aquifer "cannot now and will not in the future serve as a source of drinking water," for example, if its location or contamination makes such use impractical.

( 40 C.F.R. § 146.4(b).)⁵ We will refer to aquifers which meet the definition of underground source of drinking water and, in accordance with that definition, have not been designated as exempt by EPA, as "nonexempt aquifers."

The underground injection control program in a given state may be administered by EPA, or the state may apply to EPA for primary enforcement responsibility for the program, referred to as primacy. ( 42 U.S.C. § 300h-1, subds. (b) & (c).) A state may obtain primacy either by showing its underground injection control program meets requirements set forth in EPA's regulations ( 42 U.S.C. § 300h-1, subd. (b)(1)(A)(i) ) or, with respect to injections associated with oil and gas production, by demonstrating its program meets certain statutory requirements and will be effective in "prevent[ing] underground injection which endangers drinking water sources" ( 42 U.S.C. § 300h-4, subd. (a) ). If a state has been granted primacy, EPA retains the authority to revise the program or revoke primacy. ( 40 C.F.R. §§ 145.32 - 145.34.) EPA also retains the sole authority to approve aquifer exemptions. ( 40 C.F.R. § 144.7(b)(2)-(3).)

California's Underground Injection Control Program

In 1983, EPA granted California primacy over underground injections associated with oil and gas production, pursuant to the primacy provision requiring the state to prove its program will be effective in preventing injections endangering drinking water sources. ( 48 Fed.Reg. 6336-01 (Feb. 11, 1983) [primacy approved pursuant to § 1425 of the Act]; Pub.L. No. 96-502, § 2(a) (Dec. 5, 1980) 94 Stat. 2737 [§ 1425 of the Act codified at 42 U.S.C. § 300h-4 ].) As part of this process, in 1982 EPA and the Department executed a memorandum of agreement (MOA) establishing the respective responsibilities of the two agencies in the administration of California's underground injection control program.⁶ Under the MOA, it is the Department's responsibility to approve or deny permits for underground injections. The MOA also memorializes EPA's exemption of multiple California aquifers, and provides: "Aquifer exemptions made subsequent to the effective date of this Agreement shall not be effective until approved by [EPA] in writing. [¶] After the effective date of this Agreement, an aquifer exemption must be in effect prior to or concurrent with the issuance of a Class II permit for injection wells into that aquifer."⁷

Between 2011 and 2014, the Department became aware that it had issued permits for potentially thousands of oil and gas wells injecting into nonexempt aquifers or nonexempt portions of aquifers. Two unrelated causes led to this massive error. First, apparently due to poor oversight by the Department, regional offices failed to identify the correct boundaries of exempt aquifers. For example, regional offices looked only at contour maps without also considering depth, and therefore permitted injections above or below an exempt aquifer; or issued permits based on a list of exempt aquifers without realizing that only a portion of the relevant aquifer was exempt. Second, the Department became aware that there were two nearly identical versions of the MOA: in one version, the Department's request for exemption of eleven aquifers (hereafter, the Eleven Aquifers) was approved; in the other, it was denied. After the state was granted primacy, EPA and the Department treated the former as the operative MOA and the Department issued permits authorizing injections into the Eleven Aquifers. The latter version of the MOA was rediscovered by Department staff in 2011. Upon this discovery, the Department determined there was little evidence justifying exemption of the Eleven Aquifers, and any exemption may have been procedurally improper. Although the exemption status of the Eleven Aquifers was ambiguous during the relevant time, for convenience we will include them in the term "nonexempt aquifers."

The Department notified EPA and the two agencies worked together to develop a plan to remedy the inappropriately-issued permits, as documented in correspondence between the agencies.⁸ The basic structure of the plan, as finalized in March 2015, was as follows. The Department would review the thousands of injection wells which potentially injected into nonexempt aquifers, prioritizing those which posed the greatest risk to drinking water sources. During the review process, if the Department determined an injection well potentially impacted water supply wells, it would order that injection well to immediately cease operation.⁹ For many of the remaining wells, there was reason to think the aquifers met the criteria for exemption. The Department would allow injections to continue for a limited time, during which time the operator could request an exemption for that aquifer.¹⁰ If, by the expiration of the allotted time, EPA had not granted an exemption, the injections must cease. The amount of time in which to obtain an aquifer exemption varied depending on the type of aquifer. For injections into aquifers with high quality water, the deadline was October 2015. For injections into the Eleven Aquifers, the deadline was December 2016. For injections into aquifers with relatively poor quality water or with oil-containing water (which "could only be fit for beneficial use following extensive and expensive purification"), the deadline was February 2017.¹¹ The Department could issue new permits for injections into the third category of aquifer, under certain conditions, but any such permits would be subject to the February 2017 deadline. In a March 2015 letter, EPA approved this approach, referring to it as the "corrective action plan." As the corrective action plan was implemented, EPA occasionally approved modifications.

In April 2015, the Department issued emergency regulations codifying the corrective action plan's schedule. The emergency regulations were replaced by permanent regulations containing the same schedule. ( Cal. Code Regs., tit. 14, §§ 1760.1, 1779.1.)

Trial Court Proceedings

In May 2015, Appellant filed the underlying action seeking a writ of mandate ( Code Civ. Proc., § 1085 ) and declaratory relief based on the Department's failure to order the immediate closure of wells injecting into nonexempt aquifers.¹² The trial court granted motions to intervene by certain energy companies and industry groups (collectively, Intervenors).¹³ In September 2016, the trial court issued a statement of decision denying Appellant's claims...