BILL ANALYSIS Ó
AB 1104
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 1104
AUTHOR: Salas
AMENDED: January 27, 2014
FISCAL: Yes HEARING DATE: June 25, 2014
URGENCY: No CONSULTANT: Joanne Roy
SUBJECT : CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA):
BIOGAS PIPELINES: EXEMPTION
SUMMARY :
Existing law , under the California Environmental Quality Act
(CEQA):
1) Requires lead agencies with the principal responsibility
for carrying out or approving a proposed project to prepare
a negative declaration, mitigated declaration, or
environmental impact report (EIR) for this action, unless
the project is exempt from CEQA (CEQA includes various
statutory exemptions, as well as categorical exemptions in
the CEQA guidelines). (Public Resources Code §21000 et
seq.). Exemptions relating to pipelines include:
a) A project of less than one mile in length within a
public street or highway, or another public right-of-way
for the installation of a new pipeline or maintenance,
repair, restoration, reconditioning, relocation,
replacement, removal, or demolition of an existing
pipeline. "Pipeline" means "subsurface pipelines and
subsurface or surface accessories or appurtenances to a
pipeline, such as mains, traps, vents, cables, conduits,
vaults, valves, flanges, manholes and meters."
(§21080.21).
i) Requires a resource agency to consider only
the length of pipeline that is within its legal
jurisdiction in determining the applicability of
this exemption to a natural gas pipeline safety
enhancement activity under review by the resource
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agency. (§21080.21).
ii) Defines "natural gas pipeline" to mean a
public utility activity as part of a program to
enhance the safety of intrastate natural gas
pipelines in accordance with a decision, rule, or
regulation adopted by the Public Utilities
Commission; and defines "resource agency" to mean
the State Lands Commission, California Coastal
Commission, Department of Fish and Game, or the
State Water Resources Control Board, and local or
regional agencies with permitting authority under
the California Coastal Act of 1976 or regional
water quality control board requirements.
(§21080.21).
iii) Sunsets the provisions above, in §21080.21,
on January 1, 2016. (§21080.21).
b) The inspection, repair, restoration, reconditioning,
relocation, replacement, or removal of an existing
pipeline less than eight miles in length, or any valve,
flange, meter, or other equipment directly attached to
the pipeline if certain conditions are met (e.g.,
"pipeline" is covered under the Elder California
Pipeline Safety Act of 1981 (for transporting hazardous
liquid substances or highly volatile liquid substances),
project is not less than eight miles from any section of
pipeline that has been subject to this exemption in the
past 12 months, certain notice is provided, project is
located within an existing right-of-way and restored to
its condition prior to the project, notice
requirements). (§21080.23).
c) Operation, repair, maintenance, or minor altercation
of existing private or public structures involving
negligible or no expansion, including existing
facilities of both investor and publicly owned utilities
used to provide electric power, natural gas, sewage, or
other public utility services. (CEQA Guidelines
§15301(b)).
d) Replacement or reconstruction of existing structures
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and facilities where the new structure will be located
on the same site as the structure replaced and will have
substantially the same purpose and capacity, including
replacement or reconstruction of existing utility
systems or facilities involving negligible or no
expansion of capacity. (CEQA Guidelines §15301(c)).
This bill :
1) Provides that for the purposes of the §21080.23 pipeline
exemption, "pipeline" also means a pipeline located in
Fresno, Kern, Kings, or Tulare County used to transport
biogas, meeting the requirements of that section and all
local, state, and federal laws.
2) Defines "biogas" as a natural gas meeting certain
requirements and derived from anaerobic digestion of dairy
animal waste.
3) Sunsets the provisions of this bill on January 1, 2018.
COMMENTS :
1) Purpose of Bill . According to the author, "SB 605 (Ashburn
2009) which sunset in January 2013 exempted from CEQA
existing pipelines located in the counties of Fresno, Kern,
Kings and Tulare that are used to transport 'biogas'
derived from anaerobic digestion of dairy animal waste. SB
605 was limited to these four counties because most dairies
are located in the Central Valley. California is home to
the nation's largest dairy industry, which includes
approximately 1,600 dairies that house some 1.8 million
cows. These dairies produce substantial quantities of
dairy manure that can be processed by anaerobic digesters
to produce biogas. Once biomethane is cleaned, it can be
used in electricity-producing facilities, natural gas
vehicles and home appliances. Biomethane is 21 [times]
more potent as a greenhouse gas than carbon dioxide. At
the time SB 605 was signed into law, dairies faced
economical challenges as a result of the downturn economy.
Because of the economic problems, dairies were not able to
launch dairy digesters due to the high cost of the
technology and extensive regulations. Since the passing of
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SB 605, in 2009, several things have been done in order to
facilitate, nurture and boost growth in this new renewable
energy sector?This bill seeks to encourage the development
of dairy digesters in the Central Valley to produce energy
and improve the air quality that is among the worst in
California."
2) Whom Does This Proposed Exemption Benefit ? It is unclear
what projects that this bill is intended to benefit. No
projects were provided that would benefit from this
exemption. Rather, according to the author, "cluster dairy
projects are being planned in the Central Valley that would
benefit by this bill. These projects could potentially
process manure produce[d] by 50,000 cows." No further
information or detail has been provided that describe these
projects, their status, or how they would benefit from the
proposed exemption.
3) Proposed Reenactment of Past Legislation . AB 1104 would
reenact SB 605 (Ashburn), Chapter 599, Statutes of 2009,
which was repealed by its own terms on January 1, 2013.
The exemption enacted by SB 605 was in effect from 2010
through 2012. As noted in the Committee analysis on SB 605
regarding the purpose of the bill, "The author asserts that
these projects 'are often delayed by lengthy and costly
environmental reviews that can threaten the financial
viability of projects to expand the use of emerging
technology.'" Committee staff has been unable to find any
record of the exemption being used, nor did the author of
AB 1104 provide any in the background materials submitted
to the Committee.
One of the purposes of a sunset is to obtain information on
whether a particular law is needed or effective. A
question arises as to the need for this bill considering we
have learned more about biogas issues and risks, no
evidence has been found that the previous exemption was
used, and in fact, since SB 605, an environmental analysis
of a biogas project has been completed and found to be
helpful and necessary.
4) Background on CEQA .
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a) Overview of CEQA Process . CEQA provides a process
for evaluating the environmental effects of a project,
and includes statutory exemptions, as well as
categorical exemptions in the CEQA guidelines. If a
project is not exempt from CEQA, an initial study is
prepared to determine whether a project may have a
significant effect on the environment. If the initial
study shows that there would not be a significant effect
on the environment, the lead agency must prepare a
negative declaration. If the initial study shows that
the project may have a significant effect on the
environment, the lead agency must prepare an EIR.
Generally, an EIR must accurately describe the proposed
project, identify and analyze each significant
environmental impact expected to result from the
proposed project, identify mitigation measures to reduce
those impacts to the extent feasible, and evaluate a
range of reasonable alternatives to the proposed
project. Prior to approving any project that has
received environmental review, an agency must make
certain findings. If mitigation measures are required
or incorporated into a project, the agency must adopt a
reporting or monitoring program to ensure compliance
with those measures.
If a mitigation measure would cause one or more significant
effects in addition to those that would be caused by the
proposed project, the effects of the mitigation measure
must be discussed but in less detail than the
significant effects of the proposed project.
b) What is Analyzed in an Environmental Review ?
Pursuant to CEQA, an environmental review analyzing the
significant direct and indirect environmental impacts of
a proposed project, may include water quality, surface
and subsurface hydrology, land use and agricultural
resources, transportation and circulation, air quality
and greenhouse gas emissions, terrestrial and aquatic
biological resources, aesthetics, geology and soils,
recreation, public services and utilities such as water
supply and wastewater disposal, and cultural resources.
The analysis must also evaluate the cumulative impacts
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of any past, present, and reasonably foreseeable
projects/activities within study areas that are
applicable to the resources being evaluated. A study
area for a proposed project must not be limited to the
footprint of the project because many environmental
impacts of a development extend beyond the identified
project boundary. Also, CEQA stipulates that the
environmental impacts must be measured against existing
physical conditions within the project area, not future,
allowable conditions.
5) Is Ignoring Impacts Prudent ? While the project may be
beneficial, there may be significant impacts that would not
be addressed with an AB 1104 exemption. For example, such
a pipeline exemption may adversely affect roads and may
cause conflicts with entrances to nearby homes and
businesses. There may also be adverse public health and
safety, noise and air quality impacts for area residents,
or sensitive uses such as schools, senior centers, and
hospitals. Under CEQA, the impacts such as the ones
mentioned above must be accounted for, avoided, and/or
mitigated. With a CEQA exemption, as provided by this
bill, there would be no consideration of these and other
impacts under the Act.
6) Background: Biogas .
a) Anaerobic Digestion . According to the California
Environmental Protection Agency (CalEPA), biogas
recovery systems are sometimes known as anaerobic
digesters or "biodigesters" because they use a process
called anaerobic digestion. During anaerobic digestion,
bacteria break down waste in an oxygen-free environment.
One of the natural products of anaerobic digestion is
biogas. Biogas can be used to generate electricity, as
a boiler fuel for space or water heating, upgraded to
natural gas pipeline quality, called "biomethane" (which
requires the removal of residual carbon dioxide and has
the same properties as natural gas), or for a variety of
other uses.
b) Biogas Recovery Process . According to the US EPA, a
system is needed to collect manure and transport it to a
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digester. Existing liquid/slurry manure management
systems can readily be adapted to deliver manure to an
anaerobic digester. Anaerobic digesters, commonly in
the form of covered lagoons or tanks, are designed to
stabilize manure and optimize the production of methane.
A facility to store digester effluent is required.
Biogas is collected, treated, and piped to a gas use
device. Flares are also installed to destroy extra gas
and as a back-up mechanism for the primary gas use
device. A facility to store digester effluent is
required - the effluent of the anaerobic digestion can
be used for purposes including livestock bedding,
potting soil, land application, and fertilizer.
c) Biogas Issues .
i) Chemical Make-Up of Biogas and Associated
Health Concerns . When manure is anaerobically
digested, the biogas produced is primarily composed
of:
a) Methane, which is approximately 60%
of biogas. Methane is colorless and odorless,
which can result in unknown exposure. Methane
is flammable when it mixes with air. While
methane is not a toxic gas, it displaces air
so that, in a confined space, it creates an
oxygen-deficient atmosphere.
b) Carbon dioxide, which is an
odorless gas that can increase heart rate and
respiration rate. Higher levels of carbon
dioxide displace oxygen supply in the
bloodstream, which can cause unconsciousness
and death.
c) Hydrogen sulfide, which is a highly
toxic gas. At low levels, it smells like
rotten eggs and can produce eye irritation.
At dangerous levels, it can destroy the sense
of smell and produce respiratory paralysis -
one can literally drop dead because there is
no odor to warn of its presence.
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d) Ammonia, which has a pungent odor
and can irritate the eyes and respiratory
tract. It also can displace oxygen in the
bloodstream.
Animal manure contains bacteria, viruses, and
possibly parasites. Because digesters utilize
"waste" materials as feedstock, there is a
potential for exposure to pathogens and the
bacteria present in animal wastes can produce
infection.
Common symptoms of biogas exposure include
drowsiness, headache, disorientation and
respiratory irritation. The severity of the
symptoms depends on the concentration of biogas and
length of exposure. Also, asphyxiation from biogas
may be a concern in an enclosed area where manure
is stored.
ii) Biogas and Other Hazards . Other safety
concerns associated with anaerobic digesters and
biogas include the potential for explosion, fire,
burns, electrical shock, drowning, and exposure to
loud noise. Throughout an anaerobic digester
facility, pipes containing hot fluids or exhaust
gas can pose potential burn hazards. Dangerous
situations can arise unexpectedly and quickly, such
as when a gas pipe is accidentally cut. If biogas
is diluted between 10% and 30% with air, there is
an explosion hazard.
When working with hydrogen, it is important to consider
the metal or alloy type and engineering design
because hydrogen gas readily absorbs into many
types of metals, causing embrittlement, which can
lead to structural failure. Hydrogen embrittlement
increases the cracking in the material. For
example, brass gate valves and pipes used in biogas
systems must be of a lead-free type because the
hydrogen sulfide in biogas will destroy lead, which
will cause gas leaks. Hydrogen sulfide and ammonia
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are also potentially explosive.
Considering the health and human safety risks mentioned
above, a question arises as to whether it is prudent to
allow for a CEQA exemption for pipelines that transport
such a dangerous material. As noted in Comment #4, an
exemption means that significant impacts may not be
deliberated or addressed.
7) History of Anaerobic Digesters at Dairies in California .
According to CalEPA:
Prior to 2002, fewer than five dairies in California operated
anaerobic manure digesters. Each dairy used the biogas
produced by the digester to run an engine that powered a
generator producing electricity for use at the dairy.
There were no specific regulatory programs that applied to
digesters, although the regional water quality control
boards (RWQCBs) regulated wastes produced at the dairies,
including effluent from the digesters. Other state and
local agencies did not have regulations specific for
digesters, although some had regulations applicable to
dairies.
In 2002, the California Energy Resources Conservation and
Development Commission (commonly referred to as the
California Energy Commission (CEC)) provided grant funding
for the Dairy Power Production Program (DPPP) to support
construction of digesters at dairies that resulted in
construction of digesters at 10 dairies, several of which
negotiated with utility companies to sell excess
electricity. However, the pricing for the surplus
electricity was not favorable to the dairies and some
instead flared excess biogas.
Starting in 2004, several counties began developing regulatory
programs for dairies, but the regulations did not
specifically address digesters. In 2005, new regulatory
programs were enacted that affected the construction of
digesters at dairies. Having to understand and comply with
the new regulations was challenging for proponents of
digesters at dairies. Most of the new regulations applied
to air emissions in the San Joaquin Valley and South Coast
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Air Pollution Control Districts (APCDs). The primary
effect of the new regulations was to limit the amount of
nitrogen oxides (NOx) that could be released by operation
of engines used to power generators. At the same time, the
Central Valley RWQCB was developing a new regulatory
program for dairies that included more stringent
requirements for new lagoons such as those that could be
covered to serve as an anaerobic digester. During the
period that the Central Valley RWQCB regulations were under
development, persons proposing to construct digesters at
dairies in the Central Valley experienced frustrating
delays in obtaining design approval from Central Valley
RWQCB.
In October 2006, a second round of CEC grant funding was made
available and nine additional dairies received funding for
new digesters. At about the same time, utility districts
developed policies for the purchase of excess electricity
at rates that were more favorable to dairy operators. In
May 2007, the Central Valley RWQCB adopted general waste
discharge requirements (WDRs) for cow dairies and included
requirements applicable to construction and operation of
digesters. Although APCD and RWQCB requirements applicable
to digesters were now clearly established, the difficulty
and cost of complying with the requirements resulted in
delays in getting the new digesters operating. As of April
2008, only one of the additional digesters was operational.
In late 2007, a few companies proposed to construct anaerobic
digesters at dairies to produce biogas and treat the biogas
for injection into utility district natural gas pipelines.
In early 2008, the Central Valley RWQCB issued individual
WDR orders for seven such facilities. Six of the
facilities stated that they would co-digest imported
organic feedstock to enhance biogas production. As of
April 2008, none of these facilities were operational.
In December 2010, the Central Valley RWQCB certified a final
EIR for Waste Discharge Regulatory Program for Diary Manure
Digester and Co-Digester Facilities. The program EIR
assesses the environmental impacts associated with manure
digester and co-digester facilities throughout the Central
Valley. Under the program, the Central Valley RWQCB has
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adopted two general orders for facilities, enabling the
Central Valley RWQCB to reduce the time required to permit
dairy digester projects by at least 75%.
8) CEQA is Not Preventing Anaerobic Digester Projects from
Being Built .
a) Hub For Multi-Disciplinary Regulatory Process . A
CEQA exemption does not alleviate a project proponent
from its obligation to obtain mandatory permits or
adhere to specified regulatory programs. CEQA assists
in moving a project through the multi-disciplinary,
regulatory process because responsible agencies rely on
the lead agency's environmental documentation in acting
on the aspect of the project that requires its approval
and must prepare its own findings regarding the project.
For example, the San Joaquin Valley APCD has applicable
air emissions regulations, the Department of Resources
Recycling and Recovery (CalRecycle) requires solid waste
permitting, and the Central Valley RWQCB mandates WDRs
for centralized dairy manure anaerobic digesters or
centralized manure co-digester facilities. A variety of
issues (see Comment #4(b)), many of which involve
permitting and/or regulatory program requirements,
should be coordinated and analyzed together as a whole.
CEQA provides a comprehensive analysis of a project's
impacts in those subject areas.
b) Recent Anaerobic Digester Project That Complied With
CEQA . In early 2014, Tulare County, the lead agency for
a project to construct a biogas facility, Pixley Biogas
Anaerobic Digester, completed an EIR for that project.
The Pixley project includes construction of an anaerobic
digester, construction of two underground pipelines that
are each approximately one mile in length, and
construction of a biogas pipeline from the digester to
an adjacent renewable fuels facility.
The EIR tiered off of the Central Valley RWCQB program EIR
for dairy manure digester and co-digester facilities,
incorporating mitigation measures in the RWQCB's EIR by
reference in the environmental analysis of the Pixley
project. Also, Tulare County integrated and
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incorporated by reference CalRecycle's statewide
anaerobic digester facilities program EIR. Using
programmatic EIRs in the Pixley project's environmental
review likely saved a lot of time and money, and the
project is currently underway.
As noted above, Tulare County tiered off of two agencies'
programmatic EIRs, thus helping to simplify the regulatory
process for the Pixley anaerobic digester project while
ensuring a comprehensive environmental review. Based on
the limited information provided by the author, it seems
that future projects, which AB 1104 is intended to benefit,
could be somewhat similar to the Pixley project and may be
subject to a similar environmental review. If this is the
case, then a question arises as to why this bill is needed.
9) Cannot Segment a Project under CEQA . Considering that the
potential projects that may benefit from AB 1104 are
currently in the planning process (as noted in Comment #2),
one may assume that some, if not all, have yet to build
their anaerobic digester systems. New projects, as opposed
to existing biogas systems, would likely require some sort
of a new system to be built, including new pipeline, new
digester, new gas treatment system, and new pipes. The AB
1104 proposed exemption would apply to an existing
pipeline. CEQA requires that a project must be treated and
analyzed as a whole and not segmented into multiple,
individual projects. So, if a new anaerobic digester
system project includes an existing pipeline, the AB 1104
proposed exemption would not apply - the existing pipeline
cannot be segmented as a separate project and must be
considered as part of the project as a whole. It is
questionable whether this bill would apply to the projects
that the author intends.
10)What We Lose When We Exempt From CEQA . It is not unusual
for certain interests to assert that CEQA impedes a project
or that a particular exemption will expedite construction
of a particular type of project and reduce costs. This,
however, frequently overlooks the benefits of environmental
review: to inform decisionmakers and the public about
project impacts, identify ways to avoid or significantly
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reduce environmental damage, prevent environmental damage
by requiring feasible alternatives or mitigation measures,
disclose to the public reasons why an agency approved a
project if significant environmental effects are involved,
involve public agencies in the process, and increase public
participation in the environmental review and the planning
processes.
If a project is exempt from CEQA, certain issues may not get
addressed. For example:
How can decisionmakers and the public be aware of
impacts, mitigation measures, and alternatives of an
exempt pipeline?
Is it appropriate for the public to live with the
consequences of exempt projects where impacts are not
mitigated and alternatives are not considered regarding
certain matters, such as air quality, water quality,
noise, cumulative impacts, and growth inducing impacts?
Because adverse project impacts do not disappear when
they are not identified and mitigated with an exemption,
does the exemption result in a direct transfer of
responsibility for mitigating impacts from the project
applicant/developer to the public ( i.e. , taxpayers) if
impacts are ultimately addressed after completion of the
project?
If taxpayers, rather than a developer, are ultimately
responsible for mitigating impacts of an exempt project
after project completion, what assessments or taxes will
be increased to fund mitigation or pay for alternatives
at a later date?
Anaerobic digestion provides a good opportunity to address
farm-related environmental concerns such as reducing dairy
emissions of methane, which is one of the leading
contributors to greenhouse gas emissions, generate
renewable energy, and diversify farm products. The State
has recognized the benefits of anaerobic digestion
prompting agencies to develop specific programs and provide
millions of dollars in funding for such projects.
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Regardless of the merits of any project, short-term,
long-term, and/or permanent consequences of a project
should be known by the decisionmakers, the project
applicant, and the public before a project is approved; and
mitigated or avoided, if possible, before a project
commences - CEQA specifically provides for that informed
decisionmaking. Biogas systems, including pipeline, pose
challenges and safety risks that should be assessed and
subject to environmental review.
1) Support . Support states, "Studies have been completed that
show the financial hardships of individual dairies
converting dairy methane into renewable energy. However,
dairies in the highlighted counties have the unique ability
to aggregate raw biogas, transport it to a central location
and produce electricity, renewable natural gas, or clean
transportation fuels. Not only are the energy and low
carbon transportation fuels produced consistent with state
objectives, but the greenhouse gas reduction benefits from
such projects offers additional benefits that are unique to
the dairy sector?Looking at California's energy needs, we
need to be doing as much as we can to promote alternative
energy." Support further states, "To accelerate the
introduction of this new form of renewable energy, which is
also an effective emission-reduction technology, the CEQA
exemption should be restored for biogas transmissions lines
less than eight miles in length. Natural gas and crude oil
pipelines in this category already receive this exemption.
Therefore, GHG reduction concerns argue for restoring a
similar exemption to biogas transmission lines."
2) Opposition . Opposition states, "A recent natural gas
pipeline leak in Kern County City of Arvin demonstrates
that a CEQA exemption for pipelines is inappropriate. On
March 18, 2014, eight Arvin families were evacuated from
their homes due to a natural gas leak from pipelines
running under their homes. The pipelines, which had been
thought to be abandoned, were used to transport waste gas
from oil operations. Air testing revealed the release of
high levels of benzene and naphthalene. There are similar
safety concerns with biogas. Without proper
pressurization, methane based biogas can be explosive. In
addition, hydrogen sulfide leaks are also possible without
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proper regulation. However, the aftermath also revealed
neither Kern County nor the City of Arvin had sufficient
information about how the pipelines were used and what type
of emergency response was appropriate. In addition, there
were no requirements place[d] on the use of the pipelines,
no conditions for monitoring, and no conditions for
appropriate closure. Requiring pipeline operators to
comply with CEQA allows for these protections to be put in
place by the lead agency in a transparent manner."
SOURCE : Author
SUPPORT : Agricultural Energy Consumers Association
Associated Builders and Contractors of
California
Bioenergy Energy Association of California
Caterpillar, Inc.
County of Kern Board of Supervisors
OPPOSITION : Center on Race, Poverty & the Environment
Planning & Conservation League