SOUTHERN CALIFORNIA ENVIRONMENTAL UPDATE #3 – APRIL 24, 2017

This is the third update on environmental regulatory and legal developments in Los Angeles and adjacent counties, as well as the Southern San Joaquin Valley.  We welcome your comments and updates.

South Coast Air Quality Management District

*Governing Board Shift:  New Governing Board Member Sheila Kuehl replaced Mike Antonovich, returning the Board to a Democratic Majority.  Ms. Kuehl calls upon the South Coast Air Quality Management District (District) to use its full regulatory power, and she has strong ties with the California Legislature.  New emphases now include further regulations of stationary facilities, such as warehouses and shopping malls that are considered “indirect sources” of air emissions because they attract emissions from cars and trucks, as well as a termination of the RECLAIM Program.  Questions on the latter include when (2025, 2023, 2031?), treatment of credits from shutdowns, and how companies that invested in long-term credits will be dealt with.  In addition, the District wants to achieve the NOx shave under RECLAIM and at the same time sunset the Program.  Collaterally, the District is pushing the California Air Resources Board (CARB) and US EPA to do their “fair share” to regulate mobile sources so that further efforts to improve air quality will not be piled on the backs of stationary businesses.

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First Quarter CEQA Update in Under 60 Seconds

Okay, maybe slightly longer than 60 seconds.  The point being, though, that CEQA case updates really should not read like law school case briefs.  Long discussion of the lower court’s findings?  No thank you.  Point/counterpoint for each and every argument made by petitioners?  No one has time for that.  Get in, get out and move on with some useful knowledge — that’s the goal for this update on CEQA cases in the first quarter of 2017.

If we had to pick a theme for first quarter CEQA cases, it would be simple: don’t stick your head in the sand, do explain yourself, and all will be fine.  Why this theme?  Continue reading and find out in these case summaries. Continue Reading

Retailers Beware! Dollar General Just Hit with $1.125 Million Judgment for Improper Hazardous Waste Handling and Disposal

Here’s another major reminder to retailers to know their waste streams and to make sure they are being managed and handled properly.  On Monday, Kern County Superior Court Judge Sidney P. Chapin ordered Dollar General (Dolgen California) and its subsidiary corporations to pay $1.125 million as part of a settlement of a civil/environmental prosecution.  The April 17, 2017 judgment was announced by the Yolo County District Attorney, along with 31 other California District Attorneys as part of a significant civil settlement.  A harbinger of the increasingly aggressive stance local prosecutors are taking with respect to household hazardous waste disposal claims, the civil enforcement lawsuit was filed just one week prior, on April 11, 2017, in Kern County by a group of 38 of California’s 58 counties.  Dollar General operates about 13,320 stores in 43 states, including a significant number in California.

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New Forecast in California: An End to the Drought (For Now!) in Most Counties

On April 7th, Governor Jerry Brown issued an executive order that lifts the drought emergency in fifty-four of the fifty-eight California counties. After six years of a prolonged drought in California, Executive Order B-40-17 lifts the drought emergency in all California counties except Fresno, Kings, Tulare and Tuolumne.

While the drought is declared over for many regions, Executive Order B-40-17 makes clear that water conservation efforts are not. Instead, “our changing climate requires California to continue to adopt and adhere to permanent changes to use water more wisely and to prepare for more frequent and persistent periods of limited water supply.” When the drought emergency was in effect, Governor Brown ordered a statewide 25% cut in urban water use, and the state responded by coming in quite close, by reducing water use by more than 22% between June 2015 and January 2017. In stating this “drought emergency is over,” the Governor also broadcasted what many Californians have come to know: “the next drought could be around the corner. Conservation must remain a way of life.”

In continued water conservation efforts in California, Executive Order B-40-17 provides that the State Water Resources Control Board will continue to maintain and develop permanent prohibitions on wasteful water use such as watering lawns in a manner that causes runoff, hosing off sidewalks, driveways and other hardscapes, as well as irrigating ornamental turf on public street medians.

As for the continued drought response in Fresno, Kings, Tulare, and Tuolumne counties, the Executive Order states that the California Department of Water Resources and the State Water Resources Control Board “will accelerate funding for local water supply enhancement projects and will continue to explore if any existing unspent funds can be repurposed to enable near-term water conservation projects.”

So, California has turned the corner for this drought from which many lessons have been learned and adaptive measures undertaken by public and private water users. Hopefully these lessons and measures are remembered for when the next drought arrives, and even improved upon to help weather the next set of storms and lack thereof.

CARB Wins Again on Cap-and-Trade, But Is It Really in Any Danger of Losing?

As the sands shift on federal climate change policy, California’s cap-and-trade program survives to fight another day.  Yesterday, a California Court of Appeal upheld the program because it does not impose a tax subject to the two-thirds supermajority vote requirement under Proposition 13.  The Court also affirmed the California Air Resources Board’s (CARB) authority to auction GHG emissions allowances.  For the ins and outs of the decision and prior coverage of the case, pop on over to Renewable + Law for a great post by my colleagues, Allison Smith and Parissa Florez.

Now, stating the obvious here: a lot is riding on this case.  The cap-and-trade program has generated billions of dollars in fees and the program plays a crucial role in California’s goal to cut GHG emissions.  Those fees don’t get paid with monopoly money, but instead hit the bottom line of companies across many different industries.  Of course, some consider the fees to be a small price to pay to prevent flooding, the sixth mass extinction, and in their view, the end of the world. On a level that hits closer to home for many readers of this blog, the challenge to the cap-and-trade program has added to the uncertainty of how to address GHG emissions for development projects subject to CEQA.  As previously discussed by my colleague, Tom Henry, reliance on the cap-and-trade program appears to be one of the few approaches to a legally defensible CEQA GHG analysis.

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On the Chopping Block this Week: Obama Mitigation Policies for Natural Resources

I should start writing a regular segment titled “On the Chopping Block this Week.” While Congress’ hands seem to be tied, the President surely doesn’t have the same problem with overturning policies from the Obama Administration.  This week was no exception, with the release of Trump’s Executive Order on Energy Independence and Interior Secretary Zinke’s related Secretarial Order 3349.

While my renewable energy friends ponder the fate of climate change policies and the Clean Power Plan, bugs and bunny lovers (and haters too!) should take note of the Orders’ call to review (and most likely rescind) Obama’s natural resources mitigation policies. Check out this analysis by a few of my fish and wildlife colleagues for great insights into the Orders’ impact on USFWS/NMFS and ESA mitigation policies.

The first 100 days certainly have been a wild ride so far, but I may just get whiplash from all of these policy changes!

ARB Adopts GHG Emission Standards for Oil and Gas Facilities; Operators Wary of Costs

On March 23, 2017, the California Air Resources Board (“ARB”) adopted regulations for Greenhouse Gas Emission Standards for Crude Oil and Natural Gas Facilities (“Methane Regulations”).  The Methane Regulations impose emission controls on offshore and onshore oil production and processing facilities and at natural gas compressor stations, underground storage facilities, and gathering and boosting stations.

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Kern County Judge Grants Injunction, Blocking Blanket Enforcement of Oil Field Aquifer Exemption Regulations

A reported in a prior blog post, the Western States Petroleum Association (“WSPA”) sued the California Department of Conservation and the Division of Oil, Gas and Geothermal Resources (jointly, the “Department”) in Kern County Superior Court in January alleging that the Department’s oil field wastewater injection prohibitions violate WSPA’s members’ due process rights.  On March 20, 2017, a Kern County judge sided in favor of WSPA, granting an injunction on behalf of Plaintiffs and, separately and independently, on behalf of intervenor B.E. Conway Energy, Inc. and intervenor Sentinel Peak Resources California.  This means that the Department is currently barred from blanket enforcement of its Aquifer Exemption Compliance Schedule Regulations (“Regulations”).

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Tribes’ Federal Water Rights Include Groundwater—But How Much?

Co-authored by Wes Miliband and guest-blogger Hayley K. Siltanen

The Ninth Circuit recently ruled that federal reserved water rights held by Indian tribes extend to groundwater underlying reservation lands. Determining the quantity of that groundwater, however, is reserved for another day.

In Aqua Caliente Band of Cahuilla Indians v. Coachella Valley Water District, the Ninth Circuit affirmed the district court’s declaration that the United States impliedly reserved appurtenant water sources, with “appurtenant” including groundwater, when it created the Aqua Caliente Band of Cahuilla Indians’ reservation in the Coachella Valley of California. The decision marks the first time that a federal appellate court has recognized groundwater rights as being included in federal reserved water rights.

Federal reserved rights are water rights that are appurtenant to land that has been withdrawn from the public domain by the federal government, and that are necessary to accomplish the federal purpose of the withdrawn (or “reserved”) land. In a landmark decision issued over 100 years ago, Winters v. United States, the U.S. Supreme Court held that federal reserved rights apply to Indian reservations. These rights, known as Winters rights, derive from the federal purpose of the reservation.  In the case of the Aqua Caliente Band of Cahuilla Indians (the “Tribe”), the Ninth Circuit explained that, “[w]ithout water, the underlying purpose—to establish a home and support an agrarian society—would be entirely defeated.”

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California to Thwart Trump’s Rollback of Federal Environmental Protections, Including Waters of US Deregulation

Newton’s Third Law apparently not only applies in physics, but in politics as well.  Last week, the California Senate leadership unveiled the “Preserve California” legislative package to oppose the rollback of federal environmental protections by President Trump and the GOP-controlled U.S. Congress.  The package included California State Senate Bill 49, aka the “California Environmental Defense Act,” which would adopt pre-Trump federal environmental and safety regulations as the minimum standards under California law.

Specifically, Senate Bill 49 would apply to the pre-Trump federal regulations issued under the federal Clean Air Act, Clean Water Act, Endangered Species Act, Safe Drinking Water Act, Fair Labor Standards Act, Occupational Safety and Health Act, and Mine Safety and Health Act.  The bill was introduced because Trump and the GOP have “signaled a series of direct challenges to these federal laws and the protections they provide ….”  Right on cue, President Trump released his plan yesterday to significantly limit the definition of waters of the United States protected by the Clean Water Act. Continue Reading

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