In Sunflower Alliance v. California Department of Conservation, the First District Court of Appeal found that conversion of a former oil well into an injection constituted a negligible expansion of use and upheld the agency’s factual determination that the project fell within the scope of the Class 1 categorical exemption for existing facilitates.
Background
The project at issue involves the conversion of a former oil well into an injection well. The project involves modest changes to the existing injection well site, including removal of a well plug, installation of injection equipment inside the well, with the same continued use of the existing well pad and access road. The injected water will be confined to the aquifer by a barrier of about 1,000 vertical feet of shale.
The project was reviewed by Department of Conservation’s Division of Geologic Energy Management (CalGEM), the State Water Resources Control Board, and the Regional Water Quality Control Board. As the lead agency, CalGEM found that the project fit within the Class 1 categorical exemption. According to CEQA Guidelines section 15301, Class 1 consists of “the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use.” CalGEM found that the injection equipment would be installed within the existing well boring and would require no significant surface equipment or new drilling and would further eliminate the need for routine trucking of produced water from the applicant’s active oil wells.
The petitioner filed a petition for writ of mandate challenging CalGEM’s determination that the project was categorically exempt from CEQA. The trial court granted the petition on grounds that injection, rather than extraction, constitutes a “significantly different use” and issued a writ directing CalGEM to set aside its approval of the project.
CalGEM complied with the writ, but the project applicant appealed.
The Court of Appeal’s Decision
The First District Court of Appeal reversed. The court considered whether well conversion projects, as a group, are beyond the scope of the Class 1 exemption. The petitioner argued that any new use of a modified well is an impermissible expansion. In contrast, the applicant argued that the applicability of the Class 1 exemption turns on the degree of change occurring as part of a project.
The court did not fully agree with either the petitioner or applicant. The court found that adopting petitioner’s approach would render the term “negligible” superfluous contrary to established principles of statutory interpretation. Instead, the court focused on the environmental consequences of a change in use to conclude that application of the Class 1 exemption is appropriate where the risk of environmental harm resulting from a change in use is negligible. The court also noted this interpretation aligns with the fundamental purpose of categorical exemptions, which is to exclude from CEQA review certain classes of projects that have been determined to not have significant environmental impacts.
As applied here, the court found that the project fell within the scope of the Class 1 categorical exemption. The court reasoned that not only does the project involve only minor alteration to existing equipment, but also that the environmental risks of the conversion are negligible because the project’s approval includes a regulatory determination ensuring that the injected water cannot escape the underlying aquifer and harm people, property, or the environment.
The court found petitioner’s claims regarding environmental impacts were unsupported by substantial evidence and speculative. The court similarly rejected the petitioner’s claim that CalGEM’s request for additional technical information regarding migration of injected water as part of its review was evidence of a potentially significant environmental effect. The court noted that based on additional analysis and a requirement to conduct testing to confirm that analysis, any concerns regarding impacts to water quality had been resolved.
Finally, the petitioner argued that imposition of mitigation measures to eliminate the project’s alleged environmental impacts precluded use of the Class 1 categorical exemption. The court disagreed, finding that although numerous special conditions had been imposed as part of the project approval, the conditions were standards required for issuance of the permit, and therefore were not appropriately construed as CEQA mitigation measures.
– Hannah Rider