California Supremes return to CEQA

Author:  Damien M. Schiff

On Monday, the California Supreme Court issued an unanimous decision in Communities for a Better Environment v. South Coast Air Quality Management District (SCAQMD).  The case concerned whether SCAQMD, the regional state air quality agency, had to prepare an environmental impact report (EIR) under the California Environmental Quality Act when it approved ConocoPhillips' Diesel Project plan.  (PLF filed a letter-brief in support of Conoco's petition for review).  Basically, Conoco wanted to convert its SoCal refinery operation to produce ultra-low sulfur fuel, but in order to do that, Conoco would have to, at times, increase the production of several of its boilers at its refinery over and above what had been the refinery's most recent "baseline" emission levels.  That increased production would result in the emission of more nitrogen oxide, which is a regulated air pollutant that contributes to smog formation in SoCal.  SCAQMD concluded that an EIR was not required for the Diesel Project, because even with the increased operation of Conoco's boilers, the amount of emissions would still not exceed what Conoco's air permits authorize; and given that those air permits had long ago been subject to CEQA review (or antedated CEQA), it was not necessary to produce any additional CEQA analysis prior to approving the Diesel Project.

The Supreme Court, in an opinion authored by Justice Werdegar, disagreed and ruled that SCAQMD had to produce an EIR before giving its OK to the Diesel Project.  SCAQMD and Conoco had argued that requiring an EIR (1) would infringe upon Conoco's vested property rights in the permits, and (2) would be inconsistent with CEQA's relatively short limitations periods.  As for (1), the Court reasoned that Conoco had no right to pollute the air at any given quantity, and noted that Conoco's permit entitlement could not be overturned in the CEQA process.  As for (2), the Court concluded that its holding was consistent with the CEQA statute of limitations, because the plaintiffs were not challenging any aspect of the permits, but rather an operational decision under those permits, namely, the Diesel Project.

The Court did leave some discretion to SCAQMD as to how the agency should assess the impacts of the Diesel Project as part of the EIR process.  But the Court was clear that, whatever the outcome of that process, it had to include the in-depth environmental impact assessment of an EIR.