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Association of Irritated Residents v. Kern County Board of Supervisors

California Court of Appeals, Fifth District

November 21, 2017

ASSOCIATION OF IRRITATED RESIDENTS et al., Plaintiffs and Appellants,
KERN COUNTY BOARD OF SUPERVISORS et al., Defendants and Respondents ALON USA ENERGY, INC., et al., Real Parties in Interest and Respondents.


         APPEAL from a judgment of the Superior Court of Kern County No. S-1500-CV-283166. Eric Bradshaw, Judge.

          Earthjustice, Elizabeth B. Forsyth, Angela Johnson Meszaros and Oscar Espino-Padron for Plaintiffs and Appellants.

          Mark L. Nations, Interim County Counsel, Charles F. Collins, Deputy County Counsel, for Defendants and Respondents.

          Alston & Bird, Jocelyn Thompson, Roger A. Cerda and Maya L. Grasse for Real Parties in Interest and Respondents.


          FRANSON, J.

         Plaintiffs challenge the County of Kern's certification of an environmental impact report (EIR) and approval of a project to modify an oil refinery in Bakersfield so it can unload two unit trains (104 cars) of crude oil per day, equating to 150, 000 barrels. The refinery is authorized to process 70, 000 barrels of crude oil per day and the balance of unloaded crude (80, 000 barrels per day) would be sent to other refineries by pipeline. A controversial aspect of the proposed project is the transportation of crude oil from the Bakken formation in North Dakota. Compared to heavier crudes, Bakken crude may be more volatile and likely to explode in the event of a rail accident.

         Plaintiffs contend the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.[1]) was violated because the EIR (1) erroneously used the refinery's operational volume from 2007 as the baseline instead of the conditions existing in 2013 when the notice of preparation of the EIR was published; (2) incorrectly relied upon the refinery's participation in California's cap-and-trade program to conclude the project's greenhouse gas emissions would be less than significant; and (3) underestimated and failed to fully describe the project's rail transport impacts, including the risk of a rail accident causing a release of hazardous materials and the environmental impacts of off-site rail activity.

         First, we conclude the EIR's choice of 2007 as the measure of an existing conditions baseline for an operating refinery (1) was supported by substantial evidence; (2) appropriately deviated from the normal baseline identified in Guidelines section 15125, [2] subdivision (a) because of the refinery's history of fluctuating operations; and (3) conformed to the principles set forth by the California Supreme Court in Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310 (Communities for a Better Environment), a case that addressed the appropriate baseline for an oil refinery. Thus, the baseline complies with CEQA.

         Second, we interpret the reference in Guidelines section 15064.4, subdivision (b)(3) to “regulations … adopted to implement a statewide … plan for the reduction of mitigation of greenhouse gas emissions” to include California's cap-and-trade program. We also interpret Guidelines section 15064.4 as authorizing a lead agency to determine that a project's greenhouse gas emissions will have a less than significant effect on the environment based on the project's compliance with the cap-and-trade program. Accordingly, we conclude the EIR's discussion of greenhouse gas emissions contains no prejudicial error.

         Third, the EIR contains factual error in its description of federal railroad safety data. It erroneously used the total number of “accident/incidents” reported for a 10-year period as the number of “train accidents” (both are terms of art under the federal regulation). This error tainted the EIR's calculations of the risk of a release of hazardous materials due to a mishap during the rail transportation of crude oil to the refinery. The error caused the EIR to underestimate the risk of a release by fivefold.

         Fourth, the EIR erroneously stated federal law preempted CEQA review of certain environmental impacts of off-site rail activities. We conclude federal law did not prevent the EIR from disclosing and analyzing the reasonably foreseeable environmental impacts associated with off-site rail activities. Consequently, the EIR must be corrected to include a disclosure and analysis of those indirect effects of the project.

         We therefore reverse the judgment and remand for further proceedings.



         Plaintiff Association of Irritated Residents alleges it is a California nonprofit corporation formed in 1991 and based in Kern County, where some of its members reside. It alleges it was formed to advocate for clean air and environmental justice in San Joaquin Valley communities.

         Plaintiff Center for Biological Diversity alleges it is a nonprofit corporation with offices throughout California and the United States. It alleges it is actively involved in environmental protection issues throughout North America and has 50, 000 members, some of whom reside in Kern County.

         Plaintiff Sierra Club alleges it is a national nonprofit organization of approximately 600, 000 members. Sierra Club alleges it has approximately 600 members in Kern County and many more along the railway used to transport crude oil to the project site in Bakersfield.

         Defendant Kern County Planning and Community Development Department is the lead agency that conducted the environmental review of the project. Defendant Kern County Board of Supervisors is the decision-making body that certified the EIR and approved the project. The defendants are referred to collectively as “County.”

         Real party in interest Alon USA Energy, Inc. is a Delaware corporation headquartered in Texas. It is an independent refiner and marketer of petroleum products and the parent company of real party in interest Paramount Petroleum Corporation, a Delaware corporation. Paramount Petroleum Corporation is the applicant for, and the recipient of, the approvals that are the subject of this litigation. The real parties in interest are referred to collectively as “Alon USA.”

         The Refinery

         Alon USA named its proposal the “Alon Bakersfield Refinery Crude Flexibility Project” and its purpose is to allow greater flexibility for the existing refinery to process a variety of crude oils on-site. The refinery is located at 6451 Rosedale Highway, northwest of the City of Bakersfield. The site has been the location of a petroleum refinery since 1932. The refinery is capable of producing gas oil, gasoline, diesel fuel and petroleum coke. The existing refinery includes units for crude distillation, delayed cooking, hydrocracking, catalytic reforming, and ancillary and support facilities. Those facilities include steam boilers, process heaters, cooling towers, storage tanks, interconnecting pipelines, and a terminal with truck and rail loading facilities.

         The refinery has current environmental permits, including permits to operate from the San Joaquin Valley Air Pollution Control District (Air District). The refinery has a maximum rated crude processing capacity of 70, 000 barrels per day. The proposed project would not increase that capacity.

         Various companies have owned and operated the refinery since 1932. In the 1980's Texaco acquired the refinery and two neighboring facilities, integrated them into a single plant, and brought the refining capacity up to 70, 000 barrels per day. In 2000, Shell Oil became the sole owner of the refinery. In November 2003, Shell Oil announced it planned to close the refinery. In March 2005, Shell Oil sold the plant to Flying J Inc., which operated the refinery through a subsidiary. As a result of financial issues unrelated to the refinery, Flying J Inc. and its subsidiary declared bankruptcy on December 21, 2008, and, a week later, the refinery was shut down.

         In June 2010, Alon USA purchased the refinery through the bankruptcy. Twelve months later, Alon USA resumed some refining operations, processing gas oil transported via rail and truck from its refinery located in Paramount, California. When the Paramount refinery suspended production, the refinery in Bakersfield stopped its refining operations, but continued other operations and activities. Those continuing activities included managing inventory, blending and marketing fuels, and functioning as a terminal for crude oil and finished petroleum products. The foregoing history is relevant to the issue of the project's baseline and what level of refining operations, if any, may be included in the baseline used to analyze the project's environmental effects.

         The Project

         The project involves: (1) the expansion of existing rail, transfer and storage facilities; (2) the construction of process unit upgrades and modifications; (3) repurposing existing storage tanks; and (4) the relocation and modernization of an existing liquid propane gas truck rack and upgrades to a sales rack. The expansion includes construction of a double rail loop from a new on-site spur connected to the BNSF Railway and the addition of up to three new boilers. The EIR estimates the construction phase of the project would last approximately 10 months.

         The new unloading facilities would allow offloading of crude oil from rail cars. The new facilities would receive and unload two unit trains (104 cars) within a 24-hour period under normal operating conditions. Based on the maximum capacity for tank cars, the modified facility would be able to offload an average of 150, 000 barrels per day. The crude oil delivered by unit train would be transferred into the refinery for processing (up to 70, 000 barrels per day) or into the existing pipeline network for transfer to other refineries.

         The expanded train facilities would increase the plant's potential to receive crude oil from the Bakken formation in northwestern North Dakota. Bakken crude oil generally is more volatile than other crude oils. The draft EIR described the safety concerns raised by transporting Bakken crude by rail and listed five major train accidents and derailments in the year preceding the release of the draft EIR.[3] The most notable accident involving Bakken crude oil occurred in Lac-Megantic, Quebec in July 2013, when 60 tank cars exploded and killed 47 people.

         CEQA Review

         On September 19, 2013, County published a notice of preparation of a draft EIR, which triggered a “scoping” process that involved soliciting the views of various public agencies about the scope and content of the environmental information relevant to each agency's statutory responsibilities. The notice also announced the date and location of a scoping meeting for responsible agencies and the public. County used the comments received during the review period in preparing the draft EIR. Normally, the physical environmental conditions existing when the notice is published constitute the project's baseline. (Guidelines, § 15125, subd. (a).)

         County prepared a draft EIR and circulated it for public review from May 22 to July 7, 2014. In a letter dated July 7, 2014, counsel for plaintiff submitted written comments on the draft EIR. The letter was accompanied by 37 exhibits designated A through KK, which contained over 4, 000 pages. After the comment period expired, County prepared written responses to the comments received from the public and responsible agencies. The written responses constitute Chapter 7 of the final EIR and were made available to County's board of supervisors in late August 2014.

         On September 9, 2014, County's board of supervisors held a public hearing in connection with its consideration of the project and the EIR. The board of supervisors allocated 30 minutes for attendees who wished to speak in favor of the proposal and 30 minutes for those who wished to speak against it. At the end of the public hearing the board of supervisors unanimously passed a resolution approving the requested zoning modifications, adopting findings pursuant to CEQA and the Guidelines, and determining the EIR complied with CEQA and was complete and adequate in scope.

         The day after the public hearing, County filed a notice of determination with the county clerk. The notice stated County had approved the project and certified the EIR. The filing of the notice and its posting by the county clerk commenced the running of a 30-day statute of limitations for filing a CEQA lawsuit. (§ 21167, subd. (e); Guidelines, § 15094, subd. (g).)


         In October 2014, plaintiffs filed a verified petition for writ of mandate against County that alleged CEQA violations involving (1) the use of an improper baseline reflecting conditions in 2007, (2) an inaccurate project description, (3) a failure to adequately disclose the project's significant environmental effects, (4) a failure to provide information upon which conclusions were based, and (5) a failure to discuss and adopt mitigation measures. About a week later, plaintiffs filed a first amended petition for writ of mandate, which alleged the same five CEQA violations and which is the operative pleading in this appeal. The amended pleading referred to “Alon USA Energy, Inc.” instead of “Alon U.S.A.”

         On December 18, 2015, and February 5, 2016, the trial court held hearings on the petition. On April 1, 2016, the court issued a minute order and ruling denying plaintiffs' petition. Later that month, a final judgment denying writ of mandate was entered. In June 2016, plaintiffs filed a notice of appeal.



         Appellate review in a CEQA proceeding is governed by the abuse of discretion standard set forth in section 21168.5. Consequently, our “inquiry shall extend only to whether there was a prejudicial abuse of discretion. Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.” (§ 21168.5.)

         Under this abuse of discretion standard, we independently review claims that a public agency committed legal error (i.e., did not proceed in the manner required by law) in conducting the environmental review required by CEQA. (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 426-427.) As to claims that an agency committed factual errors, we apply the substantial evidence standard of review. (Id. at p. 426.)


         A. Contentions of the Parties

         Plaintiffs contend County failed to proceed in the manner required by law when it chose 2007 as the baseline for the refinery's air pollution emissions instead of the conditions that existed in 2013 when County published the notice of preparation.[4] Plaintiffs rely on Guidelines section 15125, subdivision (a) and argue the physical conditions existing when the notice of preparation is published normally constitute the baseline and that norm should have been used in this case. Plaintiffs argue County's use of a 2007 baseline for air pollution emissions was gamesmanship designed to conceal or understate the project's air pollution emissions and did not improve the informational value of the EIR to decision makers and the public.

         County contends its choice of the 2007 baseline is supported by substantial evidence and relevant case law. County argues it had to resolve the question of what the existing refinery contributed to the project's baseline. County asserts the 2007 baseline brings the project's impacts into focus and avoids confusing (1) the impacts resulting from the changes caused by the project with (2) impacts resulting from operating the existing refinery-operations that already are approved. In simplified terms, County contends: (1) the existing conditions include a refinery with a history of actual operations pursuant to governmental authorizations entitling it to process up to 70, 000 barrels of crude oil per day; (2) the history of actual operations should be reflected in the baseline; and (3) the actual operations from 2007 provide a reasonable measurement of the refinery's historical operations. We agree with these contentions and conclude the baseline chosen did not violate CEQA.

         B. Legal Principles

         1. General Principles Relating to Baseline Selection

         The purpose of an EIR is to identify the project's significant effects on the environment and indicate the manner in which those significant effects can be mitigated or avoided. (§ 21002.1, subd. (a).) CEQA considers this information to be part of the public disclosure intended to be “meaningful and useful to decisionmakers and to the public.” (§ 21003, subd. (b); see § 21002.1, subd. (e).)

         “To decide whether a given project's environmental effects are likely to be significant, the agency must use some measure of the environment's state absent the project, a measure sometimes referred to as the ‘baseline' for environmental analysis.” (Communities for a Better Environment, supra, 48 Cal.4th at p. 315, italics added.) The baseline used in an EIR “delineate[s] environmental conditions prevailing absent the project” and it is these conditions “against which predicted effects can be described and quantified.” (Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439, 447 (Neighbors for Smart Rail).) More specifically, the potential physical changes to the environment generally are “identified by comparing existing physical conditions [(i.e., the baseline)] with the physical conditions that are predicted to exist at a later point in time, after the proposed activity has been implemented. [Citation.] The difference between these two sets of physical conditions is the relevant physical change” to the environment, part of which may be allocated to the project and part of which may be allocated to other causes. (Wal-Mart Stores, Inc. v. City of Turlock (2006) 138 Cal.App.4th 273, 289.) After the project's predicted environmental effects have been quantified, the agency then determines whether those environmental effects are “significant” for purposes of CEQA. Thus, the baseline is a fundamental component of the analysis used to determine whether a proposed project may cause environmental effects and, if so, whether those effects are significant.

         2. Specific Text of the Statute and Guidelines

         CEQA does not use or define the term “baseline.” Nevertheless, the idea of a baseline is embedded in CEQA's definition of the environment. “‘Environment' means the physical conditions which exist within the area which will be affected by a proposed project.” (§ 21060.5, italics added; see Guidelines, § 15360 [regulatory definition of “environment”].) The importance of existing physical conditions is repeated in CEQA provisions addressing the preparation of an EIR by state and local agencies. For instance, when such agencies prepare an EIR, “any significant effect on the environment shall be limited to substantial, or potentially substantial, adverse changes in physical conditions which exist within the area.” (§§ 21100, subd. (d), 21151, subd. (b), italics added.) These references to physical conditions that exist provide the statutory foundation for the Guidelines provision that uses the term “baseline.” Guidelines section 15125, subdivision (a) provides in part:

         “An EIR must include a description of the physical environmental conditions in the vicinity of the project, as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time environmental analysis is commenced, from both a local and regional perspective. This environmental setting will normally constitute the baseline physical conditions by which a lead agency determines whether an impact is significant.” (Italics added.)

         In sum, the text of CEQA and the Guidelines identify existing conditions as the starting point (i.e., baseline) for determining and quantifying the proposed project's changes to the environment. Furthermore, the Guidelines amplify the statutory text by specifying the point in time normally used to identify existing physical conditions.[5]

         3. Baseline for a Petroleum Refinery

         The application of the provisions from CEQA and the Guidelines relating to baselines is relatively simple in this case because the California Supreme Court has discussed the appropriate baseline for a project involving modification to a petroleum refinery. In Communities for a Better Environment, supra, 48 Cal.4th 310, ConocoPhillips proposed modifying the refinery to enable it to produce ultralow sulfur diesel fuel. (Id. at p. 316.) The plans “involved replacing or modifying hydrotreater reactors, a cooling tower, storage tank, and compressor; installing new pipelines and pumps; and substantially increasing operation of the existing cogeneration plant and four boilers, which provide steam for refinery operations.” (Id. at p. 317.) ConocoPhillips had permits to operate the cogeneration plant and boiler and those permits specified the maximum rate of heat production for each piece of equipment. (Id. at pp. 317-318.)

         ConocoPhillips applied to the regional air quality management district for a permit to construct the proposed modifications to its refinery. (Communities for a Better Environment, supra, 48 Cal.4th at p. 317.) The district approved the permits after concluding in a negative declaration that (1) the proposed project would cause increased operation of the steam generating equipment; (2) the increased steam generation and other new activities would create additional NOx emissions; and (3) the proposed project could not have a significant effect on the environment because the increase in NOx emissions from the increased operation of the existing steam generation equipment were not attributable to the project because those operations did not exceed the maximum rate of heat production allowed under the existing permit. (Id. at p. 318.) Restated using the concept of a baseline, “the District treated any additional NOx emissions stemming from increased plant operations within previously permitted levels as part of the baseline measurement for environmental review, rather than as part of the proposed Diesel Project.” (Ibid.)

         The district's choice of the existing maximum permitted operations as the baseline was rejected by the Supreme Court. (Communities for a Better Environment, supra, 48 Cal.4th at p. 316 [district abused its discretion by comparing project's effects “to a baseline of maximum permitted capacity”].) The court relied on Guidelines section 15125 and CEQA case law for the principle that the baseline for an agency's primary environmental analysis under CEQA must ordinarily be the actually existing physical conditions rather than hypothetical conditions that could have existed under applicable permits or regulations. (Communities for a Better Environment, supra, at pp. 320-322.) Applying this principle, the court determined the air pollution effects of the proposal to modify the petroleum refinery's operations were to be measured against the existing emission levels, rather than against the levels that would have existed had all the refinery's boilers operated simultaneously at their maximum permitted capacities. (Id. at pp. 322-327.) Thus, the Supreme Court concluded the district used an erroneous baseline.

         The Supreme Court did not take the further step of identifying the baseline that was required to be used. Instead, the court stated: “We leave for the District on remand, however, to resolve exactly how the existing physical conditions-assertedly subject to operational variation over time-should be measured.” (Communities for a Better Environment, supra, 48 Cal.4th at p. 316.) The court reiterated that it would “not attempt here to answer any technical questions as to how existing refinery operations should be measured for baseline purposes in this case or how similar baseline conditions should be measured in future cases.” (Id. at p. 327.) Nevertheless, the court addressed the problem of defining an existing conditions baseline in circumstances where the existing conditions themselves change or fluctuate over time, as ConocoPhillip's refinery operations and emissions had. (Id. at pp. 327-328.) “A temporary lull or spike in operations that happens to occur at the time environmental review for a new project begins should not depress or elevate the baseline.” (Id. at p. 328.) The court concluded that despite the Guidelines' reference to “the time the notice of preparation is published, or if no notice of preparation is published, ... the time environmental analysis is commenced” (Guidelines, § 15125, subd. (a)), “[n]either CEQA nor the CEQA Guidelines mandates a uniform, inflexible rule for determination of the existing conditions baseline. Rather, an agency enjoys the discretion to decide, in the first instance, exactly how the existing physical conditions without the project can most realistically be measured, subject to review, as with all CEQA factual determinations, for support by substantial evidence.” (Communities for a Better Environment, supra, at p. 328.)

         The foregoing sentence sets forth the legal principle applicable to the parties' dispute about how the existing physical conditions should be measured. Consequently, we consider whether substantial evidence supports County's finding that existing physical conditions are realistically measured by the volume the refinery processed in 2007.

         4. EIR's Discussion of the Choice of Baseline

         Section 3.3.2 of the EIR is labeled “Baseline/Existing Environmental Setting.” That section provides a history of the refinery and its operations from 1932 to the present and then states:

         “Here, the refinery was established over 80 years ago, and environmental review has been conducted for numerous upgrades and modifications since the adoption of CEQA. The refinery has temporarily suspended most refining operations, but the new owner has consistently stated its intention to continue refining at the site. To bring the project impacts into clearest focus and avoid confusing the impacts of the project changes with the operation of the existing refinery, the baseline for purposes of environmental review is considered to be the physical environmental conditions as of 2013, adjusted where necessary to include refinery operations and related activities in 2007.”

         The EIR reiterates that it “generally uses a baseline consisting of the physical environmental conditions as of September 19, 2013, the date of the Notice of Preparation (NOP) was issued for the project, adjusted to the extent necessary to reflect an operating refinery.” The operating refinery is represented in the EIR by data from 2007 (where available), which was the last full year of operations.

         The draft EIR supports the choice of 2007 as representing the existing refinery operations by providing data for the refinery's throughput for 12 years (2001 to 2012, inclusive) in Table 3-3. Average barrels per calendar day were:

         62, 164 (2001);

         67, 426 (2002);

         66, 849 (2003);

         65, 144 (2004);

         56, 238 (2005);

         51, 842 (2006);

         60, 389 (2007);

         57, 900 (2008);

         0 (2009);

         0 (2010);

         10, 915 (2011); and

         4, 751 (2012).

         These figures combine crude oil and other hydrocarbons. In 2011 and 2012, there was no crude oil refined at the existing refinery. The figures for those years reflect the further refining of gas oil received from the Paramount refinery.

         The EIR states the refinery is capable of processing 70, 000 barrels per day and asserts a baseline of the 60, 389 average barrels per day from 2007 is conservative. The EIR also states it was reasonable to include the operating refinery in the baseline because many aspects of the refinery and its operations were reviewed in prior CEQA documents. Those CEQA documents were summarized in Table 3-4 of the EIR.

         5. Substantial Evidence Supports the Choice of Baseline

         Our analysis of County's treatment of the baseline question breaks the County's approach into two factual components. The first inquiry considers the basic question of whether County has a sufficient evidentiary basis for finding existing conditions included an operating refinery. If that finding is upheld, the second inquiry addresses whether substantial evidence supports County's choice of 2007 as a realistic measure of the baseline physical conditions created by the refinery's operations.

         We conclude substantial evidence supports County's finding that existing physical conditions included an operating refinery, despite the fact the operations were shut down shortly after Flying J and its subsidiary filed bankruptcy in December 2008. First, the evidence establishes that refinery operations of up to 70, 000 barrels per day have been approved by the issuance of permits or other entitlements that are still in effect. Second, information in the EIR, including Table 3-3, shows the refinery actually processed crude oil and other hydrocarbons until the bankruptcy filing of Flying J and its subsidiary in December 2008, and the processing of other hydrocarbons (i.e., gas oil) resumed in 2011 and continued in 2012. Third, as demonstrated by Table 3-4 in the EIR, the refinery operations have been subject to prior environmental reviews under CEQA. Fourth, the processing of crude oil at the refinery could begin again without the approval of the project currently being proposed by Alon USA. These facts provide sufficient support for finding that existing conditions included an operating refinery and, therefore, an operating refinery was properly included in the project's baseline.

         Our second factual inquiry considers whether County's choice of the figure from 2007 as the baseline is supported by substantial evidence. We conclude substantial evidence supports that choice. First, the 2007 figure reflects operations of the refinery that actually occurred. The figure is not hypothetical and it is not the maximum authorized by existing permits. Use of the maximum of 70, 000 barrels per day would have been inappropriate because that level was not achieved in any of the years from 2001 through 2012 and Communities for a Better Environment rejected using the maximum permitted amounts in a baseline where that maximum was rarely, if ever, reached. Second, the evidence shows the 2007 figure was a reasonable representation of the operations actually performed at the refinery. Although the EIR does not calculate the average barrels per day for the period from 2001 through 2008 when crude oil was being refined, we calculate that average as 60, 994 barrels per day, which is 605 barrels per day more than the 2007 figure. The comparison of this overall average to the 2007 figure leads us to conclude the 2007 figure was a reasonable estimate of the operations that actually existed. Furthermore, the EIR did not misrepresent the facts or mislead the public by stating its use of the 2007 figure was conservative because the 2007 figure is slightly less than the overall average.

         The foregoing analysis and conclusions are compatible with North County Advocates v. City of Carlsbad (2015) 241 Cal.App.4th 94, a case addressing the appropriate baseline for the traffic analysis performed in connection with proposed renovations of a shopping center. (Id. at p. 97.) The project's EIR adopted a traffic baseline that treated a large retail store as being fully occupied, even though it was vacated in 2006 and had been only periodically occupied since. (Ibid.) The appellate court upheld the lead agency's determination of the traffic baseline, concluding substantial evidence supported the determination because “it was based on recent historical use and was consistent with [project applicant's] right to fully occupy the [retail] space without further discretionary approvals.” (Ibid.)

         In summary, County did not abuse its discretion when it chose the operating volume from 2007 to measure for the existing physical conditions created by the operation of the refinery.

         6. Test for a Future Conditions Baseline Does Not Apply

         Plaintiffs contend all deviations from CEQA's normal baseline-that is, existing conditions at the time the notice of preparation is published-must be supported by a demonstration in the EIR that analyzing project impacts under the normal baseline would be “misleading or without informational value.” (Neighbors for Smart Rail, supra, 57 Cal.4th at p. 457.) Plaintiffs acknowledge that Neighbors for Smart Rail involved an agency's selection of environmental conditions projected to occur in the future and argue “the rationale and holding of the case are phrased broadly, and thus apply to all agency decisions to deviate from CEQA's normal existing conditions baseline.” We disagree with plaintiffs' broad interpretation of Neighbors for Smart Rail. We interpret that case as applying only to baselines that use hypothetical future conditions. Consequently, we conclude its principles do not apply to an agency's decision about how to measure existing conditions when the activity creating those conditions has fluctuated.

         In our view, the use of an existing conditions baseline is fundamentally different from the use of a hypothetical set of physical conditions that might exist in the future. Existing physical conditions are referred to in CEQA's statutory text. (§§ 21060.5, 21100, subd. (d), 21151, subd. (b).) In contrast, a comparison based on hypothetical future conditions is not mentioned in CEQA. Similarly, the Guidelines state existing physical conditions at the time the notice of preparation is published are the normal baseline and make no reference to the use of hypothetical future conditions. In light of the statutory and regulatory text, it made sense for the Supreme Court to adopt a strict test for determining the propriety of deviating from an existing conditions baseline in favor of a baseline that uses hypothetical future conditions.

         Furthermore, the court adopted language in Neighbors for Smart Rail that acknowledges this distinction:

         “Projected future conditions may be used as the sole baseline for impacts analysis if their use in place of measured existing conditions-a departure from the norm stated in Guidelines section 15125(a)-is justified by unusual aspects of the project or the surrounding conditions. That the future conditions analysis would be informative is insufficient, but an agency does have discretion to completely omit an analysis of impacts on existing conditions when inclusion of such an analysis would detract from an EIR's effectiveness as an informational document, either because an analysis based on existing conditions would be uninformative or because it would be misleading to decision makers and the public.” (Neighbors for Smart Rail, supra, 57 Cal.4th at pp. 451-452.)

         This quoted language clearly shows the court intended a future conditions baseline to be subject to a more rigorous judicial scrutiny than the scrutiny applied to the choice of measurement for an existing conditions baseline, a choice that is a factual finding reviewed under the substantial evidence standard. (Communities for a Better Environment, supra, 48 Cal.4th at p. 328.)

         We note that there are two basic ways to deviate from the existing conditions baseline normally used. First, a future conditions baseline could be used. In that case, the standards set forth in Neighbors for Smart Rail must be satisfied. Second, an existing conditions baseline could deviate from the norm identified in Guidelines section 15125, subdivision (a) by measuring existing physical conditions at a time other than when the notice of preparation is published. This second deviation is easily distinguished from the first type because it still measures conditions that actually existed and does not utilize hypothetical conditions. In short, the stricter principles applied to future (i.e., hypothetical) conditions baselines are not needed when a baseline using actual conditions at a time other than the publication of the notice of preparation is used to address “the problem of defining an existing conditions baseline in circumstances where the existing conditions themselves change or fluctuate over time.” (Neighbors for Smart Rail, supra, 57 Cal.4th at p. 449.) In the latter situation, the principles set forth in Communities for a Better Environment establish the substantial evidence standard as the applicable standard of judicial review. If the Supreme Court had intended to change that aspect of its decision in Communities for a Better Environment, it would have stated it was modifying its earlier decision. Therefore, we reject plaintiffs' argument that the principles adopted in Neighbors for Smart Rail for future conditions baselines apply to County's choice of the 2007 figure to measure the refinery's existing conditions baseline.


         A. General Information ...

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