Agriculture, California Environmental Quality Act (CEQA), Central Valley Project, Drought, Groundwater, Sacramento River, State Water Project, Water Transfers

Drought Water Bank Is Not Exempt From CEQA, After All

Last week brought some interesting news relating to the 2009 Drought Water Bank (DWB).  In early 2009, the DWB had been fast-tracked by Governor Schwarzenegger and the Dept. of Water Resources, to use water transfers as a means of supplying additional water to users experiencing drought shortages.  On February 27, 2009, the Governor issued a proclamation, declaring a state of emergency in California because of the drought.  The Governor also directed DWR and the State Board to expedite water transfers, stating that quick action was justified because the DWB would be exempt from the California Environmental Quality Act (CEQA), under certain emergency exemptions provided in the statute.  Then, in March 2009, right on the heels of that proclamation, DWR finalized an addendum to the environmental document for the Environmental Water Account, announcing that the one-year DWB program would not result in significant effects to the environment, and was exempt from CEQA, consistent with the Governor’s proclamation.

Even in 2008, DWR had decided to skip full CEQA review of the Drought Water Bank.  How?  By simply adding that “addendum” (then in draft form), mentioned above.  At that time, comments were submitted disputing the claim that the DWB could have no significant effects on the environment.  There is a real question here, because the DWB does not simply call for water to be moved around the state differently.  Rather, it is fully expected that sellers would use groundwater to replace some of the water that they transfer.  In any case, if significant environmental effects were possible, a full environmental impact report would be necessary — something with more meat on the bones than an addendum, which is generally appropriate only for minor modifications to a project.  Still, as indicated above, DWR went forward with the addendum strategy.

The Butte Environmental Council, among others, challenged the fast-tracking of the DWB.  Their efforts have now been rewarded by Judge Alice Vilardi of Alameda County Superior Court, who decided that DWR actually did have to follow through with CEQA.

The premise of the Drought Water Bank is to use the state and federal project facilities to execute transfers of water in times of shortage, from willing sellers to interested buyers.  Surface water, which would have been put to consumptive use absent the transfer, would instead be conserved and made available for transfer.  The surface water would in part be substituted by pumped groundwater, and would also be made available by idling rice lands, given that rice is a low-value crop with a good water yield per acre of crop idled.  The water made available by sellers north of the Delta would then be conveyed to buyers south of the Delta when the capacity to do so is available at the Jones and Banks pumping plants.

Water transfers, if executed with care, can be a very useful tool for distributing water efficiently.  It may prove valuable to have the flexibility to transfer water throughout California to resolve emergencies.  Indeed, CEQA exemptions are allowed in emergency situations — for example, projects carried out to “maintain, repair, restore, demolish, or replace” property damaged or destroyed in a disaster are exempted (PRC § 21080(b)(3)) when the Governor has declared a state of emergency, as he did here.  Also, an exemption is available to expedite other actions needed to mitigate general emergencies (PRC § 21080(b)(4)), even without a declaration from the Governor.

But did the circumstances leading up to the 2009 DWB and the Governor’s proclamation really count as an emergency?  Judge Vilardi didn’t think so — at least, not enough of an emergency to justify an exemption from environmental review.  First, even though the Governor did declare an emergency, Vilardi was not convinced that farmers having to put some acreage out of production counted as “damaged or destroyed” property; that exemption seems to contemplate something more extreme.  Second, there was not a direct connection between the drought and the water bank.  The goal of the DWB was to connect willing sellers and interested buyers, but without a clear commitment that any transfers would specifically target the property that was most damaged by the drought, or the water users that were hit the hardest.

Meanwhile, CEQA is fairly demanding as to what counts as an emergency that may be exempted.  An emergency must be “sudden” and “unexpected”; it must involve a “clear and imminent danger”; and it must demand “immediate action” (PRC § 21060.3).

CEQA does not include drought in its list of examples for what counts as an emergency.  Fires, floods, and earthquakes? Sure.  Riots, accidents, and sabotage?  Yes.  But drought is not listed.  The list is not complete, and these are just the examples the Legislature decided to list.  Drought is not excluded — so, in theory, a drought could be an emergency.  But in California, droughts occur relatively frequently.  Even in a wet year, every Californian knows that a dry year is around the corner.  So it is difficult to argue that any but the most severe droughts would count as “sudden” or “unexpected.”  Indeed, the Governor’s own state-of-emergency declaration undermines the claim that the drought was sudden or unexpected.  For example, consider the following excerpt:

WHEREAS in the time since the state’s last major drought in 1991, California added 9 million new residents, experienced a significant increase in the planting of permanent, high-value crops not subject to fallowing, and was subjected to new biological opinions that reduced the flexibility of water operations throughout the year …

Population increase since 1991?  A trend over time of increased planting of permanent and high-value crops?  Reduced operational flexibility?  These are not sudden, unexpected changes in weather leading to a drought.  Rather, the negative effects of the drought were especially highlighted by conditions that have evolved over time — which means that those negative effects can be lessened with better long-term planning, provided that the drought is not especially severe or sudden.  And what’s more, many of the negative effects highlighted by the Governor were primarily concerned with restoring the state’s declining agricultural economy, characterized by lost revenue, lost jobs, abandoned acreage, and increased food prices.  These, in Vilardi’s view, go beyond what was intended by the CEQA exemption.

In any case, Vilardi was not convinced that the drought was enough of an emergency to fast-track the Drought Water Bank and avoid CEQA review.  This decision of course comes after water transfers had already been executed as part of the 2009 DWB program.  But there is ongoing planning to continue water transfers in 2010 as a means of lessening the effects of water shortages in the upcoming year.  Vilardi’s decision suggests that CEQA review will be necessary for those transfers.



2 thoughts on “Drought Water Bank Is Not Exempt From CEQA, After All

  1. Thanks for a very useful update on an exceedingly complex question. Are there other posts or resources about controversy over other exemptions from CEQA that you could recommend?

    Posted by Kit Stolz | 22 March 2010, 10:32 pm
  2. Hello Kit,

    Thanks for writing in. CEQA exemptions are kind of a thorny issue. They are regularly sought by both sides of the political aisle, and they have played a role in the ongoing State budget negotiations. In some cases, exemptions make a good deal of sense, but in other cases, exemptions are sought, and sometimes granted, for projects where it would be legitimately useful for both the public and the lead agency to have on hand the detailed information that would be supplied in an Environmental Impact Report.

    To complicate things, while there’s a lot to like about CEQA, there is also need to execute some CEQA reform, because it sometimes has the counterproductive effect of actually deterring good projects. Part of this process is actually underway now, as CEQA Guidelines have been revised to help implement AB 32, California’s climate change law.

    My personal views on this have evolved over time by watching the CEQA dynamic play out in a variety of contexts, so I personally don’t know any good resources on exemptions. I imagine there are some good books on CEQA that at least lay out the basics. Another good place to start might be with CEQA itself, and with the Guidelines, both of which discuss exemptions. It’s hard to generalize, because they pop up in a wide variety of contexts. If there are particular exemptions that interest you, I might be of more help at that point.

    Posted by Eric | 22 March 2010, 11:11 pm

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