Today saw two significant developments for oil and gas operators utilizing well stimulation treatments in California.

Pursuant to SB 4, the Department of Conservation’s Division of Oil, Gas and Geothermal Resources released a statewide programmatic Draft Environmental Impact Report (“EIR”) analyzing the potential environmental impacts associated with well stimulation treatments, including hydraulic fracturing (aka “fracking”).

The California Office of Environmental Health and Hazard Assessment (“OEHHA”) recently released its long anticipated Notice of Proposed Rulemaking proposing changes to the warning requirements under Proposition 65’s (“Prop 65”) implementing regulations. In summary, the proposed regulations would establish a new mandatory regulation regarding the responsibility of product manufacturers and others in the distribution chain

The Surface Transportation Board (“STB”) issued a declaratory order in a 2-1 vote last Friday, finding that the California Environmental Quality Act (“CEQA”) is categorically preempted by federal law, as it relates to the Fresno to Bakersfield segment of the California High-Speed Rail Project (“HSR Project”).

Section 10501(b) of Title 49 of the United States Code provides that remedies with respect to rail transportation are exclusive and preempt remedies provided under State or Federal law. The STB has previously ruled that states or localities are precluded from intruding into matters directly regulated by the STB, in particular when the state or local action would have the effect of foreclosing or unduly restricting the rail carrier’s ability to conduct its operations or otherwise unreasonably burden interstate commerce.

Under this section, the STB could not overlook the fact that CEQA, as a state pre-clearance requirement, could ultimately deny or significantly delay the High-Speed Rail Authority’s (the “Authority”) right to construct a railroad line. This would directly defy the STB’s exclusive jurisdiction over a project that it regulates. Even if it could be argued that the Authority created an implied agreement by voluntarily beginning the CEQA process, the STB concluded that any such agreement would unreasonably interfere with interstate commerce because it would prevent the Authority from exercising its authority to construct the rail line, which it had been previously authorized to do by the STB.
Continue Reading High Speed Rail Moves Forward Without CEQA Review

Governor Brown has signed two new bills amending the California Environmental Quality Act (CEQA).  AB 52 establishes new consultation procedures with California Native American tribes, and provides that an adverse change to a tribal cultural resource is a significant impact under CEQA.  AB 1104 extends an existing CEQA exemption for certain pipeline projects to biogas

Citizens for the Restoration of L Street v. City of Fresno, et al., No. F066498,(Cal. Ct. App. 5th Dist., August 28, 2014)

In a two-part opinion, the Fifth District Court of Appeal affirmed the trial court’s judgment and writ of mandate, finding that the City of Fresno’s Municipal Code did not delegate authority to its Historic Preservation Commission (HPC) to approve CEQA documents, including the Mitigated Negative Declaration (MND) at issue. The Fifth District also upheld the trial court’s holding that the substantial evidence standard, not the fair argument standard, governs review of decisions regarding designation of historic resources.

The Project, a small 1.29 acre residential infill development in downtown Fresno, required demolition of two homes—one of which was previously designated a “Heritage Property” under the Municipal Code—necessitating a demolition permit from the HPC. In concert with its approval of the demolition permits, the HPC also reviewed and approved the Project MND, concluding that demolition of the two homes would not cause a substantial adverse change in the significance of an historical resource. Citizens for the Restoration of L Street (“Citizens”), a local association, appealed the HPC’s adoption of the MND. The City Council heard Citizens’ appeal, and passed a motion: (1) upholding the HPC’s finding that neither of the two homes was an historical resource under CEQA; (2) electing not to exercise its discretion to designate the homes historical, or the Project area an historical district; and (3) upholding the HPC’s approval of the CEQA findings and MND. Shortly thereafter, both homes were demolished.Continue Reading Is It Historical Under CEQA? Court Confirms Substantial Evidence Remains the Standard

Today, the U.S. Supreme Court denied petition for review in Rocky Mountain Farmers Union v. Corey. In Rocky Mountain Farmers, the Ninth Circuit addressed the constitutionality of California’s Low Carbon Fuel Standard (LCFS), focusing specifically on whether the LCFS discriminates against out-of-state businesses and thus violates the dormant Commerce Clause. Read our September

In Sierra Club v. County of Fresno (Cal. Ct. App. 5th Dist. May 27, 2014), the Fifth Appellate District found fault with the County of Fresno’s (County)  review of the Friant Ranch Project (Project) under the California Environmental Quality Act (CEQA). The appellate court concluded that the County’s Environmental Impact Report (EIR) did not sufficiently correlate the Project’s air quality impacts with impacts on human health, and did not sufficiently define mitigation measures designed to address air quality impacts. With respect to correlating air emissions to human health impacts, it is worth noting that the court did not address the extent to which this is possible. Initial reactions from air consultants who have reviewed this decision is that it is not technically possible to calculate this correlation with such specificity, leaving open the question of how lead agencies will respond to this decision in future CEQA documents.
Continue Reading What’s a ROG and Can It Hurt Me? EIR Overturned For Failure to Explain Air Quality Impacts to Human Health

On June 13, 2014, the Department of Conservation (“Department”)  issued a public notice and posted the latest version of the proposed regulations for the use of well stimulation in oil and gas production (“Revised Proposed Regulations”).  These are revisions to the permanent regulations that will go into effect on January 1, 2015.  The Revised Proposed Regulations include the following, significant changes:Continue Reading Department of Conservation Issues Revised, Proposed Well Stimulation Treatment Regulations

In SPRAWLDEF et al. v. San Franscisco Bay Conservation and Development Commission, et al. (“SPRAWLDEF”)(certified for publication 5/28/2014), the First Appellate District reversed the trial court’s decision and held the San Francisco Bay Conservation and Development Commission’s (“Commission”) determination that a project alternative was not economically feasible was supported by substantial evidence.