BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1277 (Hancock) - California Environmental Quality Act:
supplemental environmental impact report: City of Oakland:
coal shipment
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: April 4, 2016 |Policy Vote: T. & H. 7 - 3, |
| | E.Q. 5 - 2 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: No |Mandate: Yes |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: May 16, 2016 |Consultant: Mark McKenzie |
| | |
-----------------------------------------------------------------
This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1277 would require a public agency with
discretionary authority over a proposed project that is
necessary for the shipment of coal at a proposed Oakland port
facility to prepare a supplemental environmental impact report
(EIR) to consider and mitigate the environmental impacts of coal
shipments.
Fiscal
Impact: Unknown significant costs, which could be state or
local costs depending on which public agency would have the next
discretionary authority over approving a project. These costs
would be recovered by fees charged to the project proponent for
the cost of preparing the supplemental EIR. See staff comments.
SB 1277 (Hancock) Page 1 of
?
Background:
California Environmental Quality Act (CEQA)
Existing CEQA law generally 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 EIR for this
action. 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. 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.
Lead agencies and other responsible agencies are required to
prepare a subsequent or supplemental EIR only if specified
events occur, 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. If the project was approved by the lead agency
before the conditions that trigger a supplemental EIR occurred,
then the supplemental EIR must be prepared by the public agency
that grants the next discretionary approval for the project.
Existing law authorizes a lead agency to charge and collect a
reasonable fee from a project proponent to recover the estimated
costs incurred by the lead agency in preparing a negative
declaration or an EIR, as specified.
The Oakland Bulk and Oversized Terminal (OBOT) and coal
After the Oakland Army Base was closed in 1999, part of the
property reverted to the City of Oakland, while another portion
was transferred to the Port of Oakland. The following year, the
SB 1277 (Hancock) Page 2 of
?
Oakland City Council designated the base and surrounding
properties as a redevelopment project area, and the City of
Oakland prepared an EIR in 2002 related to proposed development
in the project area. In 2009, the Port of Oakland secured state
transportation bond funding for a project to develop warehouse
space, logistics facilities, and a rail terminal on the site.
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 (OBOT).
The expansion required an update to the original EIR that was
completed in 2002, and the City prepared an addendum in 2012.
The City entered into an agreement with two private entities,
California Capital and Investment Group (CCIG) and Prologis, to
develop the site and find 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 original and addendum environmental documents
for the project. CCIG subsequently executed a contract with
Terminal Logistics Solutions (TLS) as a long-term lessee that
would also manage an existing track network.
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 the proposed bulk
terminal in Oakland. Utah currently exports about 1 million
tons of coal each year, mainly through the ports of Richmond,
Stockton, and Long Beach. As coal-fired power plants in the
U.S. close or switch to natural gas, access to overseas markets
is becoming increasingly important for coal-producing states.
In early 2016, Utah Governor Gary Herbert signed legislation
that would contribute $53 million in Utah transportation funds
towards the construction of the new Oakland cargo terminal. To
fund the Oakland project, Utah would use state tax revenue and
then reimburse the state with federal royalties from mineral
leases. TLS is looking to partner with four Utah counties to
export commodities including coal, providing four to five
million tons of annual shipping capacity and access to overseas
markets in exchange for a $53 million investment in the OBOT.
SB 1277 (Hancock) Page 3 of
?
TLS has yet to exercise its option to develop the terminal.
According to the Senate Environmental Quality Committee's
analysis of this bill:
"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
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?"
Proposed Law:
SB 1277 would require a public agency with discretionary
authority over a project that is necessary for, and directly
related to, the use of the OBOT for the shipment of coal, to
prepare or cause to be prepared a supplemental EIR to consider
and mitigate the environmental impacts of coal shipment through
the terminal, prior to approving the project.
The bill also includes extensive findings and declarations.
Among these is a statement that coal was not considered as a
commodity that would be shipped through the terminal when the
City of Oakland prepared the 2012 EIR, but that there is a
current proposal to export coal from the OBOT. There is also a
finding that this constitutes a change in the proposed project
that is new information that was not known and could not have
been known at the time the EIR was certified as complete.
SB 1277 (Hancock) Page 4 of
?
Related
Legislation: SB 1279 (Hancock), which is also scheduled for
hearing in this Committee, would prohibit the California
Transportation Commission (CTC) from programming or allocating
state funds for proposed projects at certain port facilities
that are involved in the handling, storage, or transportation of
coal. The bill would also require the CTC to evaluate every
project it considers to determine whether it will increase the
state's capacity to facilitate the transportation of coal.
Staff
Comments: Since there has been no action on the local level to
consider the environmental impacts related to the transportation
and shipment of coal through the proposed OBOT, this bill
requires the next public agency with discretionary authority
over a project related to the terminal to prepare a supplemental
EIR that would consider and mitigate those impacts. This duty
could fall to any one of several public entities that may have
permitting authority over a project, including the City of
Oakland, the Bay Area Air Quality Management District (BAAQMD),
the San Francisco Bay Conservation and Development Commission
(BCDC), or other public agency. To the extent the
responsibility is placed upon a local agency, any costs related
to the preparation of a supplemental EIR would not be
reimbursable from the state because existing law provides fee
authority to offset those costs. To the extent the
responsibility falls to a state entity, there would be
significant state costs, and potentially peripheral impacts if
the agency has no expertise in considering environmental issues
that fall outside of its purview. These costs would eventually
be recovered by fees charged to the project proponent for the
cost of preparing the supplemental EIR, but the responsible
agency could experience significant workload disruptions and
incur secondary fiscal impacts.
-- END --
SB 1277 (Hancock) Page 5 of
?