Court Upholds CEQA Baseline Set By Historical Levels Of Refinery Operation

In an unpublished decision, Communities for Better Environment v. South Coast Air Quality Management District, California’s Second Appellate District upheld the decision of an air district to issue a negative declaration for a project that expanded the crude oil storage capacity of a Los Angeles refinery amidst allegations that the district erred in setting the CEQA baseline.

The refinery received crude oil from offshore tankers and onshore pipelines and refined the oil into various fuels. The operator applied to the district to expand the capacity of its crude oil storage tank facilities, which were not large enough to handle full loads from offshore supertankers. The operator did not seek to expand its crude oil refining capacity. In this regard, the refinery was already operating at or near its permitted refining capacity.

In the ensuing litigation, the appellate court first rejected the plaintiff’s attack on the baseline, which assumed that the refinery was, as part of the baseline condition, operating at or near its maximum permitted capacity. The court found the district’s conclusion reasonable, notwithstanding that historical output fluctuated and sometimes fell below the maximum permitted levels. Second, the court dismissed the claims that increasing the tank storage facilities was a veiled effort to expand the operator’s refining capacity to refine more crude, and that the storage project thus represented impermissible “piecemealing” of a broader expansion of the facility’s refining capacity. The court found this to be pure speculation by plaintiff, and unsupported by substantial evidence.

The decision offers comfort to mining operators, in particular, who often must contend with CEQA baselines composed of fluctuating production levels. The case also, by analogy, indicates that the expansion of material stockpiles, without increasing productive throughput, is not a change requiring comprehensive CEQA review.

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