Air Quality Analysis Derails BNSF California Project
The timeline for constructing transportation projects can be significant. And with the complexities of the California Environmental Quality Act (“CEQA”), years of analysis is not always synonymous with adequate analysis. On January 12, 2018, the California Court of Appeal for the First Appellate District informed the City of Los Angeles (“City”) and BNSF Railway Company (“BNSF”) that despite more than six years of analysis, the Final Environmental Impact Report (“FEIR”) for BNSF’s proposed rail yard project failed to adequately consider the project’s environmental impacts. (City of Long Beach et al. v. City of Los Angeles et al., Case No. A148993.) Specifically, the Court of Appeal found that the FEIR’s analysis of the project’s air quality impacts was deficient. The Court of Appeal’s decision was not all doom and gloom, however, as the Court rejected a number of other challenges to the FEIR, and provided a roadmap for addressing some of the deficiencies related to the air quality analysis.
The Ports of Long Beach and Los Angeles (“Ports”) handle approximately 35 percent of all oceanic shipping in the United States. The majority of these goods are shipped via containers, which are off-loaded and then transported by truck, rail, or a combination thereof. To facilitate transportation by rail, there are a handful of rail yards operating at the Ports, one rail yard located offsite but in close proximity to the Ports, and two rail yards located approximately 24 miles from the Ports. Due to logistical considerations, the rail yards located furthest away, one of which is owned by BNSF, handle the majority of the containers. In order to transport the containers from the Ports to the offsite rail yards, the containers are loaded onto trucks.
In September 2005, a notice of preparation and initial study for a new BNSF rail yard located approximately four miles from the Ports was released. The following month, a supplemental notice of preparation was issued. In September 2011, a draft environment impact report for the project was released. The following year, a recirculated draft environmental impact report was released. And, in February 2013, the FEIR for the project was released. The FEIR stated that the project would have the capacity to handle an estimated 1.5 million intermodal containers per year at full operation and would generate approximately 2 million trips between the new facility and the Ports. In May 2013, the City Council approved the project.
In June 2013, seven petitions were filed in Superior Court challenging the approval of the project, including one by the City of Long Beach. Eleven months later, pursuant to a stipulation, the Attorney General intervened in the litigation. In March 2016, the Superior Court issued a peremptory writ of mandate ordering the City to set aside its project approval until it complied with CEQA. In support of this decision, the Superior Court found that the FEIR’s project description was deficient, along with the FEIR’s analysis of indirect impacts and growth-inducing impacts, noise, traffic, air quality, Greenhouse gas emissions, and cumulative impacts. The Superior Court also found that the mitigation measures were inadequate. The City and BNSF timely appealed. While the Court of Appeal affirmed the Superior Court’s ultimate decision, it also reversed the Superior Court’s findings with respect to the FEIR’s project description, and analysis of indirect impacts, growth inducing impacts, noise, traffic, and Greenhouse gas emissions. Instead of addressing all of these issues, many of which were not certified for publication, this article focuses on the Court of Appeal’s analysis of the exhaustion issue, indirect impacts, Greenhouse gas emissions, and air quality.
Exhaustion is Not for Everybody
CEQA contains a number of procedural requirements that if ignored ordinarily doom a petitioner’s claim. For example, if a petitioner fails to file a request for hearing within 90 days after filing a petition, the petition may be dismissed under Public Resources Code section 21167.4, subdivision (a). Like the request for hearing, the obligation to exhaust has been codified in the Public Resources Code. Specifically, section 21177 of the Public Resources Code requires (i) presentation of the alleged deficiency during the public comment period or prior to the close of the public hearing on the project, and (ii) that the petitioner object to the approval of the project during the public comment period or prior to the close of the public hearing on the project. (Pub. Resources Code, § 21177, subds. (a)-(b).) Courts regularly enforce these requirements and dismiss CEQA causes of action without leave to amend if the claimed deficiency was not exhausted or the named petitioner failed to exhaust.
Relying on section 21177 of the Public Resources Code, the City and BNSF attempted to sidestep a number of the Attorney General’s challenges to the FEIR on the basis that they were not raised during the public comment period or prior to the close of the public hearing on the project. While it was undisputed that the issues were not raised during the administrative proceedings, the Court of Appeal concluded that in this case the failure to exhaust was not fatal.
Subdivision (d) of section 21177, states that “[t]his section does not apply to the Attorney General.” The Court of Appeal found that under the statute’s plain language, the Attorney General is exempt “from all statutory exhaustion requirements.” Thus, while exhaustion is ordinarily the rule, for purposes of CEQA that rule does not apply to the Attorney General.
Adding Capacity Does Not Equate to Indirect Impacts
Under CEQA, the reasonably foreseeable indirect impacts of a project that result in physical changes to the environment must be analyzed. While the project would result in additional capacity at the existing BNSF rail yard, the FEIR explained that the assumption that freeing up capacity would lead to increased transportation demand was purely speculative, and therefore there was no reasonably foreseeable indirect impact that needed to be evaluated.
The Superior Court rejected the FEIR’s explanation, finding that because the FEIR failed to analyze how the additional capacity at the existing BNSF rail yard would be utilized in the future, its analysis of indirect impacts was inadequate. As it did on the majority of the issues, however, the Court of Appeal concluded that the FEIR’s explanation was supported by substantial evidence.
The Court of Appeal first debunked the assumption that additional capacity means increased activity, explaining that the record evidence actually demonstrated after BNSF had increased the capacity at its existing rail yard, transportation of cargo containers from that facility subsequently decreased. Thus, increased capacity does not equate to increased demand. The Court of Appeal also found that there was substantial evidence in the record to support the conclusion that “the project is not necessary to enable BNSF to service the projected growth” in cargo transportation demand given that the existing BNSF rail yard had additional capacity that was not being utilized.
Accordingly, the Court of Appeal found that the FEIR’s conclusion on indirect impacts was supported by substantial evidence, reversing the Superior Court’s finding on the issue.
Increase In Greenhouse Gas Emissions Does Not Conflict With State Plan For Reduction of Greenhouse Gases
When determining the significance of a project’s Greenhouse gas emissions, the lead agency is supposed to consider, among other factors, the “extent to which the project complies with regulations or requirements adopted to implement a statewide, regional, or local plan for the reduction or mitigation of greenhouse gas emissions.” (Cal Code Regs., tit. 14, § 15064.4, subd. (b)(3).) The FEIR concluded that BNSF’s project is consistent with the applicable plans and policies, even though it would result in an overall increase in Greenhouse gas emissions from baseline levels, because it would also result in an increase in the fuel efficiency of regional cargo movement. The FEIR explained that this efficiency was achieved because there would be a reduction in the number of miles that cargo trucks would have to travel, as the project was located approximately 20 miles closer than the existing BNSF rail yard, and rail transport is more fuel efficient then truck transport.
The Superior Court found the FEIR’s discussion on this issue inadequate, concluding that it failed to adequately inform the public or decision makers of the reason for the project consistency determination, and a “project that will increase [Greenhouse gas] emissions cannot be in harmony with state and local plans and policies that require a decrease in [Greenhouse gas] emissions.” The Court of Appeal once again disagreed, distinguishing the FEIR’s qualitative analysis from the quantitative analysis struck down by the California Supreme Court in Center for Biological Diversity v. Department of Fish and Wildlife (2015) 62 Cal.4th 204.
In Center for Biological Diversity, the lead agency concluded that because the housing project would achieve a 31 percent reduction from business as usual, the project was consistent with Assembly Bill 32’s statewide goal of a 29 percent reduction from business as usual, and was therefore consistent with the applicable plan for reduction or mitigation of greenhouse gas emissions. The California Supreme Court explained that while such a comparison could be appropriate, the environmental document in that case failed to connect the statewide standard to the specific type of development that was being proposed, and without that connection there was an analytical gap rendering the conclusion unsupported by substantial evidence.
In contrast with the quantitative analysis in Center for Biological Diversity, the FEIR employed a qualitative analysis based on the California Air Resources Board’s scoping plan, which was developed in response to Assembly Bill 32, and promotes efficient transportation. The Court of Appeal found the FEIR’s qualitative analysis adequate, explaining that it was “particularly apt in this instance where the no project alternative also results in significant impacts and is not consistent with conservation goals.”
Accordingly, the Court of Appeal found the FEIR’s conclusion on Greenhouse gas emissions was supported by substantial evidence, reversing the Superior Court’s finding on the issue.
Use of Composite Air Quality Emissions Analysis Inappropriate In This Case
When analyzing the impacts of the project’s operations on criteria pollutants, the FEIR analyzed emissions from operations in benchmark years 2016, 2023, 2035, 2046, and 2066, estimating peak daily unmitigated emissions for each year. The FEIR conducted the same analysis for the no-project alternative. The FEIR concluded that because the estimated emissions for these years would not exceed the applicable significance thresholds, the project and no-project alternatives would have a less than significant impact on air quality. To analyze the impacts of project operations on offsite ambient air pollution concentrations in the areas surrounding the project site, the FEIR modeled a single composite emissions scenario combining the peak year, peak day, or peak hour emissions by source category. The FEIR stated that this composite emissions analysis represented the hypothetical worst case scenario. Applying this analysis, the FEIR concluded that project operations will have a significant impact on air quality because ambient air pollutant concentrations would exceed thresholds established by the South Coast Air Quality Management District. The FEIR also concluded that the no-project alternative would exceed certain South Coast Air Quality Management District thresholds, but not all of the same thresholds exceeded by the project.
The Superior Court found the composite emissions analysis in the FEIR misleading and inadequate because it failed to disclose to the public and decision makers whether there would be an exceedance of a particular criteria pollutant at a particular time in a particular location. The Court of Appeal agreed in part, explaining that while the FEIR’s analysis was not misleading, it was “incomplete.”
The Court of Appeal explained that based on an analysis of the benchmark years, peak and average daily emissions for certain criteria pollutants will be lower under the project than the no-project, but the composite analysis shows that the concentration of certain criteria pollutants will in the worst case be three times greater under the project than under the no-project. Further, “the FEIR does not disclose or estimate, how frequently and for what length of time the level of particular air pollution in the area surrounding the proposed rail yard will exceed the standard of significance.” Thus, the Court of Appeal found that the decision to perform only a single composite emissions scenario failed to comply with CEQA’s public disclosure and informational requirements.
Dispelling any suggestion that it was adopting a bright-line rule, the Court of Appeal also noted that while it found the composite approach inappropriate in this case, in other situations it may very well be appropriate to proceed with only a reasonable selection of benchmark years.
Air Quality Cumulative Impacts Analysis
In addition to the BNSF project, the FEIR disclosed that Union Pacific proposed to modernize and expand its existing rail yard, which is located adjacent to BNSF’s proposed rail yard project. With respect to the Union Pacific project, the draft environmental impact report and recirculated draft environmental impact report contained specifics about the Union Pacific project, and the draft environmental impact report contained a combined analysis of the impacts of the two projects. This analysis was not included in the FEIR. Instead, the FEIR concluded that while a detailed analysis of the cumulative impacts of BNSF’s project and Union Pacific’s project is impracticable and unreasonable, it could reasonably be concluded that there would be a significant cumulative air quality impact. The Superior Court and the Court of Appeal both found that the FEIR’s discussion, which omitted the analysis that appeared in the draft environmental impact report, was inadequate due to its superficial nature.
The Superior Court also found that there was no substantial evidence to support the FEIR’s conclusion that the BNSF and Union Pacific projects would not result in a cumulatively significant impact on non-cancer risk. On this point, however, the Court of Appeal disagreed, explaining that the two projects are relatively similar, and that if the increased cancer risk from the BNSF project is also applied to the Union Pacific project, the cumulative cancer risk is below the threshold of significance. The Court of Appeal attributed the Superior Court’s conclusion to the contrary to a mathematical error.
While there are a number of intriguing takeaways from the Court of Appeal’s decision, such as the potential use of a qualitative efficiency analysis for purposes of analyzing consistency with State Greenhouse gas emissions reduction plans, the applicability of many of the Court’s findings will depend on the specific type of project being evaluated. The Court, however, did set forth one bright-line rule that applies no matter the project. And that is, despite all the recognized benefits of requiring a petitioner to exhaust administrative remedies, when it comes to CEQA the Attorney General need not exhaust.