BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 1277
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|Author: |Hancock |
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|Version: |4/4/2016 |Hearing | 4/20/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Joanne Roy |
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SUBJECT: California Environmental Quality Act: supplemental
environmental impact report: City of Oakland: coal shipment
ANALYSIS:
Existing law, under the California Environmental Quality Act
(CEQA),
1) Requires lead agencies with the principal responsibility for
carrying out or approving a proposed discretionary project to
prepare a negative declaration, mitigated negative
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
(PRC) §21000 et seq.)
2) Requires a lead agency or responsible agency to prepare a
subsequent or supplemental EIR only if specified events
occur, such as when new information, which was not known and
could not have been known at the time the EIR was certified
as complete, becomes available. (PRC §21166(c))
3) Pursuant to Proposition 1B (Prop. 1B), enacts the Highway
Safety, Traffic Reduction, Air Quality, and Port Security
Bond Act of 2006 and authorizes $19.9 billion in general
obligation bonds to fund a variety of transportation
projects. (Government Code §8879.22 et seq.)
This bill:
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1) Makes several findings and declarations related to a project
to develop the Bulk and Oversized Terminal at the former
Oakland Army Base and a proposal to export coal from there.
2) Requires a public agency with discretionary authority over
the project to prepare or cause to prepare a supplemental EIR
to consider and mitigate the environmental impacts of the
proposed coal terminal before approving a project that is
necessary for, and directly relates to, the use of the
terminal for the shipment of coal.
Background
1) CEQA: Environmental review 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, then 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 an 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.
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2) 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,
cultural resources, and tribal cultural resources.
The analysis must also evaluate the cumulative impacts 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.
3) CEQA: Supplemental EIR.
A supplemental EIR may be necessary, such as when new
information of substantial importance was not known or could
not have been known without the exercise of reasonable due
diligence at the time the original EIR was certified. When
the original EIR has been certified, comprehensive analysis
of the project is presumed to have already taken place and
the question becomes whether circumstances have changed
enough to justify repeating a part of the environmental
review process. A supplemental EIR need only address those
EIR topics that require major revisions to the original EIR.
A supplemental EIR is subject to the same notice and public
review requirements as the original EIR, except a new notice
of preparation is not required. If the project was approved
by the lead agency before the conditions that trigger a
supplemental EIR happened, then the supplemental EIR must be
prepared by the public agency that grants the next
discretionary approval for the project.
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4) Coal.
Coal consumption in the United States has been declining in
recent years due to the abundance of cheap natural gas, the
growth of renewable energy, and environmental regulation.
The coal industry has sought to make up for the loss of U.S.
demand by increasing exports. Demand for coal globally
continues to grow, fueled largely by China. While some U.S.
coal is exported to Japan and South Korea, it is not a major
player in Asia despite the relative cheapness of western U.S.
coal; and the lack of export terminal capacity may be viewed
as one of the reasons why. Proposals over the past several
years to construct or expand port terminals in Oregon and
Washington in order to grow exports to Asia have been
defeated or stalled at almost every step, primarily due to
concerns about both local environmental impacts and global
climate change.
a) Coal and climate change.
Coal is a fossil fuel. When coal is burned, carbon dioxide,
sulfur dioxide, nitrogen oxides, and mercury compounds are
released. The fifth assessment report from the
Intergovernmental Panel on Climate Change notes that
atmospheric concentrations of global warming pollutants
have risen to levels unseen in the past 800,000 years.
Carbon dioxide concentrations have increased by
approximately 40% since pre-industrial times. There is
broad scientific consensus that these GHG emission
increases are leading to higher air and water temperatures
as well as rising sea levels, with serious consequences
for California.
In July 2015, Governor Brown spoke at the Vatican symposium
on climate change and modern slavery, which aimed to drive
awareness, dialogue, and action at the local level - among
his remarks, he stated that 90% of the world's coal must
remain unused to help avoid the dangers of global warming.
b) Coal dust: environmental and public health risks.
Coal dust is a fine powdered form of coal, which is created
by the crushing, grinding, or pulverizing of coal.
Because of the brittle nature of coal, coal dust can be
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created during mining, transportation, or by mechanically
handling coal. Also, not all coal is created equally -
some types break down into dust more easily than others.
Particulate matter from the transportation of coal can impact
air quality, and severe exposure to coal dust can cause
various pulmonary diseases. In addition, questions may
arise regarding potential environmental impacts caused by
chronic, low-level input of coal dust that may result from
steady coal shipment traffic. For example, could the
transportation of coal cause pollutant emissions, noise,
potential fires, or leaching of chemicals? Could coal
dust cover the leaves of nearby vegetation and reduce its
photosynthesis capabilities or have toxic effects on
public health or wildlife?
5) Coal shipments through California.
According to the author, three ports in California export coal:
a) Levin-Richmond Terminal: A private terminal, which
exported approximately 1 million tons of coal per year for
the last four years; but currently unknown as to whether
exports are continuing in 2016.
b) Port of Stockton: Coal exports have varied from 25,000
tons to up to 1.8 million tons.
c) Port of Long Beach: Less than one million tons.
If the coal export terminal is built in West Oakland to
handle 10 million tons of coal, it would be the largest coal
export facility along the west coast.
6) West Oakland public health.
According to the author, West Oakland has been designated as a
disadvantaged community by the California Environmental
Protection Agency via CalEnviroScreen. The community of West
Oakland is impacted heavily by goods movement. West Oakland
residents breathe air containing three times the amount of
diesel particulate matter than air in other parts of the Bay
Area, which translates into 2.5 times greater risk of cancer.
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Children in West Oakland suffer from ailments like asthma at
higher rates than children in other neighborhoods. West
Oakland residents are two times as likely to go to the
emergency room with asthma as people in other parts of
Alameda County.
7) History of the Oakland Bulk and Oversize Terminal (OBOT).
a) Redevelopment of Oakland Army Base.
According to the Senate Transportation and Housing Committee,
after the Oakland Army Base closed in 1999, part of the
property reverted to the City of Oakland while another
portion went to the Port of Oakland. The following year,
the Oakland City Council designated the base and
surrounding properties, an area totaling 1,800 acres, as a
redevelopment area. In 2009, the Port of Oakland secured
Trade Corridor Improvement Fund (TCIF) funding for a
project to develop warehouse space, logistics facilities,
and a rail terminal on the site. By diverting freight
from trucks to trains, the new rail terminal complex was
expected to reduce diesel PM emissions while
simultaneously increasing the efficiency of goods movement
through the port.
Following the dissolution of the redevelopment agency in
2012, the area owned by the redevelopment agency was
transferred to the City of Oakland. The Port and the City
began working together on the site and significantly
expanded the scope of the redevelopment, including the
addition of a bulk terminal. The Port obtained a grant
under the federal Transportation Investment Generating
Economic Recovery (TIGER) program, as well as additional
TCIF funds. The expansion of the project required an
update to the EIR completed in 2002; an addendum was
prepared in 2012.
b) Funding.
According to the Senate Transportation and Housing Committee,
the Port and the City forged an agreement with two private
entities, California Capital and Investment Group (CCIG)
and Prologis, to develop the site. These two companies
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were tasked with finding additional investors and tenants
for the project. Details of what commodities would be
transported through the bulk terminal were largely
contingent upon the contracts that would be executed, and
therefore were not reviewed in the environmental
documents.
To date, the Port and the City have secured about two-thirds
of needed project funding. Of this, the majority comes
from public funding sources, specifically: the state TCIF
($242 million); the federal TIGER program ($15 million);
the Port of Oakland ($16 million); and the City of Oakland
($55 million). In addition, CCIG and Prologis have
identified funding totaling approximately $172 million.
CCIG executed a contract with Terminal Logistics Solutions
(TLS), a company headed by Jerry Bridges, a former
executive director of the Port of Oakland. It was this
company that negotiated the deal with Utah.
c) Enter Utah.
As coal-fired power plants in the United States close or
switch to natural gas, access to overseas markets is
becoming increasingly important for coal-producing states.
In spring of 2015, stories surfaced in the media
revealing that the state of Utah was in discussions with
port developers about shipping coal from Utah to China
through a proposed bulk terminal in Oakland.
In February 2016, the Utah Legislature passed SB 246 to
authorize and provide $53 million in Utah transportation
funding to aid construction for the new Oakland cargo
terminal. On March 22, 2016, the Utah Governor Gary
Herbert signed the bill. To fund the Oakland project,
Utah would use state tax revenue and then reimburse the
state with federal royalties from federal mineral leases.
However, federal mining royalties are required to go to
local projects such as building roads, parks, public
buildings, water and sewer systems-infrastructure to
mitigate the impact of mineral development in Utah.
Instead, Utah is putting tax revenue moneys into a newly
created, Throughput Infrastructure Fund, and then
reimbursing the state with mineral royalties.
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d) What's the plan?
The OBOT is part of the larger redevelopment project at the
former Oakland Army Base, financed with a combination of
public and private funds. The improvements for the OBOT
part of the project will cost an estimated $250 million.
The developer is CCIG and the long-term lessee of the
terminal would be TLS, which would also manage an existing
track network. TLS is looking to partner with the four
Utah counties to export commodities including coal, giving
the Utah counties four million to five million tons of
annual shipping capacity and access to overseas markets in
exchange for a $53 million investment. According to the
Los Angeles Times article, "Coal represents the polluted
past - except in the interior West," (William Yardley,
March 16, 2016), public records from March 2015 show that
at least under a plan being developed at that point, the
company that would operate the terminal, TLS, would be
controlled in part by Bowie Natural Resources, the company
whose Utah coal mines would serve the terminal. TLS has
yet to exercise its option to develop the terminal.
Comments
1) Purpose of Bill.
According to the author:
A proposed project at the former Oakland Army Base would
bring up to 10 million tons of coal to West Oakland each
year. Coal would come on railroad lines from Utah and be
transferred to cargo ships for export to China and overseas
countries. If built, it will be nearly four times larger
than any coal export terminal in the West Coast.
West Oakland would be impacted by this coal export facility
and coal dust would add to the high pollution levels in
West Oakland. West Oakland residents are already 2.5 more
likely to get cancer due to breathing air which contains
three times the amount of diesel particulate matter than
air in other parts of the Bay Area. West Oakland has also
been designated by the CalEnviroScreen as being a
disadvantaged community due to its high asthma rates,
cancer risks, and pollution levels.
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I am certainly concerned about the impact of a large coal
export terminal and the impact it would have for the
surrounding environment, including the San Francisco Bay.
It is not acceptable to have the City of Oakland build a
large new facility to export coal to places like China
where people often must cover their faces or stay inside to
avoid breathing dirty air.
The need for a legislative response has gotten even more
pronounced as a result of legislation that was just signed
into law in Utah that would direct $53 million from the
state's Community Impact Bonds to purchase ownership shares
in the Oakland project in order to guarantee port access
for Utah's coal industry. The City of Oakland has already
received over $176 million in public funds from the
California Transportation Commission via the Trade Corridor
Improvement Fund from Proposition 1B. All of which means
these efforts to prop up a dirty and antiquated energy
source are being supported through public dollars.
SB 1277 declares that the transportation of coal through
West Oakland is a clear and present danger to the health
and safety of Oakland residents as well as to the workers
that would handle the coal. It also requires, before
approving a project that is necessary for and directly
related to the use of the terminal for the shipment of
coal, a public agency with discretionary authority over the
project to prepare or cause to prepare a supplemental EIR
to consider and mitigate the environmental impacts through
the coal terminal pursuant to CEQA.
2) Why should the state be concerned?
Some contend that this bill is a district issue and should be
dealt with at the local level. However, the impacts of coal
on public health and global warming are statewide concerns.
For example, the state has policies that prohibit utilities
from renewing contracts with coal-fired power plants. Also,
coal transported from Utah would have to go through multiple
counties in the state before it reaches OBOT - would citizens
in those counties be affected by this project?
It seems appropriate for the state to have some concern about a
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project, which the state has provided $176 million in general
obligation funds. As noted above, the Port of Oakland
secured TCIF funding in 2009. Prop. 1B mandates, among other
things, that when allocating TCIF, emphasis must be placed on
projects that improve corridor mobility while reducing
emissions of diesel particulate and other pollutant
emissions. Coal, which can have significant air quality
impacts, was not considered in 2009 as a potential commodity
to use in the facility; and, now the export terminal may be
built to handle up to 10 million tons of coal annually.
It seems reasonable that when no action has occurred at the
local level for almost a year to address this issue that the
state may wish to ensure that the law is adhered to and state
funds are used as intended.
3) How much was known when?
The developer, CCIG, explicitly stated in a December 2013
newsletter that CCIG "has no interest or involvement in the
pursuit of coal-related operations at the former Oakland Army
Base."
According to the Los Angeles Times article, "How Utah quietly
made plans to ship coal through California," [W]hen state and
county officials in southern Utah came up with an unusual
plan to invest $53 million in public money to help build an
export terminal in San Francisco Bay, they decided to tell as
few people as possible what commodity they planned to export.
'The script,' according to Jeffrey Holt, the [former]
chairman of the Utah Transportation Commission and a central
figure in arranging the $53-million loan, writing in an email
last spring, 'was to downplay coal.'" (William Yardley,
December 11, 2015).
Over the past several years, with the environmental reviews,
contract negotiations, and public funding processes, Oakland
City officials claim that they were never advised that coal
would be part of the product mix. CCIG did not formally
confirm that coal would be one of the exports from the OBOT
until a July 2015 letter to the Oakland Mayor.
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4) Need for a supplemental EIR.
CEQA provides that a public agency must prepare a subsequent or
supplemental EIR for a project if the lead agency determines
that new information of substantial importance has come to
light since the EIR was certified. CCIG states that it has
already complied with CEQA. However, neither the original
EIR, which was certified 13 years ago, nor the CEQA addendum
in 2012, included any mention of coal as a commodity that
would pass through OBOT - there was no reason to analyze the
impacts of coal if coal was not even considered a potential
commodity to go through the facility. As noted above, even
as late as December 2013, people were under the belief that
coal was not a commodity being deliberated.
The developer's July 2015 letter confirming coal to the Oakland
mayor and Utah's recent approval to help fund the facility
with $53 million show a commitment that coal is intended to
be shipped through the facility. Both of these show a change
in the project requiring supplementation to the environmental
review. However, there has been no action at the local level
to consider this new development that coal is a commodity
that will be shipped through OBOT.
A question that arises is - in what stage of the development
process is this facility and what is the next discretionary
permitting/action required? Because of the new information
regarding coal, the next public agency with discretionary
action cannot fully rely on the certified EIR. Thus, the
next public agency will become the lead agency that must
prepare, or cause to be prepared, a supplemental EIR to
analyze and mitigate the environmental impacts related to the
shipment of coal.
The original discretionary action by the City of Oakland and
for which the EIR was certified is done. Unless Oakland has
another discretionary action regarding the facility, the city
is no longer the lead agency. For example, if the city
reopens the development agreement, then the city could be the
lead agency to prepare the supplemental EIR.
Because there has been no movement by a local agency, for
almost a year now, that seeks to put on record that this is
new information that should be analyzed and to ensure that
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this does not slip through the cracks, this bill is intended
to clarify and make certain that this issue gets addressed.
DOUBLE REFERRAL:
This measure was heard in Senate Committee on Transportation &
Housing on April 12, 2016, and passed out of committee with a
vote of 7-3.
SOURCE: Author
SUPPORT:
350 Bay Area
Berkeley Climate Action Coalition
City of Richmond
East Bay Young Democrats
Ecology Center
Environment California
Fossil Free California
Northern California District Council of the International
Longshore and
Warehouse Union (ILWU)
Physicians for Social Responsibility San Francisco Bay Area
Chapter
Public Advocates
San Francisco Baykeeper
Save the Bay
Sierra Club California
The Peace, Earthcare and Social Witness Committee
West Oakland Environmental Indicators Project
1 Individual
OPPOSITION:
American Planning Association, California Chapter
California Building Industry Association
California Business Properties Association
California Chamber of Commerce
California Manufacturers & Technology Association
California Railroad Industry
California Teamsters Public Affairs Council
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