BILL ANALYSIS
SB 429
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Date of Hearing: June 24, 2004
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Hannah-Beth Jackson, Chair
SB 429 (Torlakson) - As Amended: June 22, 2004
SENATE VOTE : Not relevant
SUBJECT : Energy resources: petroleum infrastructure projects
SUMMARY : This bill requires the Governor to appoint a statewide
petroleum infrastructure facilitator (facilitator) to the State
Energy Resources and Conservation Commission (CEC) to
investigate and intervene in rulemaking, permitting, and other
proceedings by state agencies that affect petroleum
infrastructure projects in the state and to suggest best
practices and procedures for permit streamlining, requires the
State Air Resources Board (ARB) to undertake a number of permit
streamlining measures, and requires the California Energy
Commission Commissioners to investigate permit streamlining
activities relating to petroleum infrastructure facilities and
report to the Governor and Legislature by December 31, 2005.
EXISTING LAW :
1)Requires the CEC to biennially report to the Governor and
Legislature regarding the state's petroleum supply and
pricing.
2)Establishes the Air Pollution Permit Streamlining Act
(commencing with Health and Safety Code Section 42320), which
requires every air district to establish by regulation, a
program to provide for the expedited review of permits.
3)Requires individual air districts with a population of 500,000
or more to implement additional measures to assist applicants
with expedited permitting.
4)Under the California Environmental Quality Act (CEQA),
requires an environmental impact report to be completed and
certified within one year, and requires a negative declaration
to be completed and adopted within 180 days.
5)Under the Permit Streamlining Act, sets deadlines for public
agencies to determine the completeness of a development
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application, for a lead agency to approve or disapprove a
project (e.g., 180 days from the date the lead agency
certifies an environmental impact report, 60 days from the
date the lead agency adopts a negative declaration or
determines that the project is exempt from CEQA) and for a
responsible agency to approve or disapprove a development
project.
THIS BILL :
1)Requires the Governor to appoint a facilitator in the CEC to
investigate and intervene in rulemaking, permitting, and other
proceedings by state agencies that affect petroleum
infrastructure projects in the state and to suggest best
practices and procedures for permit streamlining.
a) Requires, not more than 90 days after the facilitator is
appointed, any state agencies involved in rulemaking,
permitting, and other proceedings that affect petroleum
infrastructure projects to do all of the following:
i) Identify and list all permits required by the agency
for petroleum infrastructure projects and related
facilities in the state.
ii) Describe all current procedures utilized in practice
for streamlining and expediting permitting for petroleum
infrastructure projects.
iii) Identify and list all laws, rules, regulations,
policies, guidelines, and permit conditions that inhibit
or restrain petroleum infrastructure prospects.
b) Requires the facilitator to do the following, not more
than 120 days after receiving information from state
agencies:
i) Compile and, upon request, make available to persons
proposing to modify, construct, or operate petroleum
infrastructure projects, all available guidance documents
and other information on permitting petroleum projects.
ii) Upon request of applicants, provide permitting
assistance to persons proposing to modify, construct, or
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operate petroleum infrastructure projects, including, but
not limited to, assistance in working with local
governments in ensuring that local permits, land use
authorizations, and other approvals made at the local
level are undertaken in the most expeditious manner
feasible without compromising public participation or
environmental protection.
iii) Upon request of applicants, intervene and
participate as a party in rulemaking, permitting, and
other proceedings by a state agency that affect petroleum
infrastructure projects, to streamline the process, to
preserve existing petroleum infrastructure efficiencies
and capacity, and to increase petroleum infrastructure
efficiencies and capacity.
2)Provides the Governor may authorize and direct the chair of
the CEC to designate individual members of the CEC to
investigate and intervene in agency rulemaking, permitting and
other proceedings affecting petroleum infrastructure projects
in the state and to suggest best practices and procedures for
permit streamlining.
3)Requires the facilitator to work with the Legislature to
introduce and enact legislation as expeditiously as possible
to streamline and expedite permitting for petroleum
infrastructure projects in the state.
4)Provides that the facilitator shall consult with all of the
following:
a) The Chair of the CEC;
b) The Chair of the ARB;
c) The Secretary for Environmental Protection;
d) The Secretary of the Resources Agency;
e) The Director of the Governor's Office of Planning and
Research;
f) Representatives from the United States Environmental
Protection Agency, the U.S. Department of Energy, the U.S.
Department of the Interior, and other affected federal
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agencies, as appropriate; and,
g) Representatives of local and regional agencies,
including air pollution districts and air quality
management districts.
5)Sunsets the facilitator's position January 1, 2010.
6)Requires the ARB to, on or before February 1, 2005, consult
with the California Air Pollution Control Officers
Association, the California Environmental Protection Agency,
the Resources Agency, the CEC, the U.S. Environmental
Protection Agency, other states, private and publicly
regulated entities, and other interested parties regarding
successful methods and best practices for streamlining air
quality permits and other permits that may be required for
petroleum infrastructure projects.
7)Requires the ARB, on or before June 30, 2005, to identify
streamlining practices, including, but not limited to,
successful practices implemented by air districts and may
adopt a complete list of permit streamlining techniques,
including, but not limited to all of the following:
a) Provisions for same-day permit issuance for qualified
petroleum infrastructure projects;
b) Streamlined procedures for hiring and relying on
certified permit application reviewers for petroleum
infrastructure projects;
c) Requiring that the air districts determine whether an
application for a petroleum infrastructure is complete, not
more than 15 days after receiving the application; and,
d) Review, avoidance, and deletion of involuntary
limitations on the throughput of any components of the
state petroleum infrastructure.
8)Provides that the ARB may require the air districts to adopt,
not later than May 1, 2005, and implement not later than July
1, 2005, the permit provisions and procedures identified by
the ARB.
9)Provides the ARB may continuously identify permit streamlining
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practices to preserve the efficiencies and capacity of
existing petroleum infrastructure and to increase the
efficiencies and capacity of petroleum infrastructure in the
state, and may require the air districts to adopt and
implement all other best practices identified by the ARB on an
expeditious basis.
10)Provides the ARB may waive the requirements for a district to
implement a best practice if the air district can demonstrate
both of the following:
a) That its existing district program performs at least as
effectively as a streamlining practice, as specified; and,
b) That the air district program has, in actual practice,
resulted in simplifying and expediting permitting for
petroleum infrastructure projects.
11)Requires the ARB to revise its best practices list after
holding a public meeting, and the air districts shall adopt
the revised practices at least annually.
12)Sunsets the ARB provisions on January 1, 2010.
13)Defines "petroleum infrastructure projects" as marine
terminals, port facilities, product storage facilities,
pipelines, land terminals, refinery projects, and related
kinds of facilities identified by the CEC as being necessary
to assure a consistent and reliable supply of cleaner burning
gasoline, ultra low sulfur diesel fuel, and other petroleum
products to California consumers.
14)Requires the CEC, on or before February 1, 2005, to initiate
consultations regarding successful methods and best practices
for streamlining permits, leases and other government
authorizations and entitlements that may be required by
petroleum infrastructure projects, with the following:
a) The facilitator;
b) The California Environmental Protection Agency;
c) The Resources Agency;
d) The U.S. Environmental Protection Agency; and,
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e) Other states, air districts, public and privately
regulated entities, California ports, and other interested
persons.
15)Requires the above consultations to include a complete report
of agencies' and the regulated entities' experiences with
facility siting conducted by the CEC, similar process in other
states, and similar processes in this state.
16)Requires, on or before June 30, 2004, the CEC to identify
permit streamlining practices, including successful practices
by the ARB, and shall publish for comment a complete list of
permit streamlining techniques for petroleum infrastructure
projects including all of the following:
a) Developing and implementing partially or fully
consolidated permit programs for petroleum infrastructure
projects;
b) Adopting criteria for the types of permitting actions
for petroleum infrastructure projects eligible for
streamlining and for a simplified permitting process;
c) Adopting streamlined lists and criteria for application
completeness determinations for petroleum infrastructure
projects;
d) Adopting mandatory deadlines for actions on permits for
petroleum infrastructure projects;
e) Avoiding and eliminating limitations on the throughput
of components of the California petroleum infrastructure;
and,
f) Relying on actual emissions performance standards that
allow the maximum flexibility in utilizing existing
efficiencies and capacity and increasing efficiencies and
capacity of the California petroleum infrastructure.
17)Requires the CEC, on or before December 31, 2005, to submit a
report to the Governor and Legislature describing the results
of the consultation along with detailed recommendations for
establishing new, streamlined processes for permitting
petroleum infrastructure projects in California.
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18)Provides the Governor, or one or more officials designated by
the Governor, may identify existing or proposed rules,
regulations, plans, policies, guidelines, permit conditions,
or other requirements affecting petroleum infrastructure
facilities and refer them to the CEC.
19)Requires the Chair of the CEC to designate a single CEC
Commissioner to review requirements and issue findings
affecting petroleum infrastructure facilities.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Background
According to the author's office, a hearing of the Senate Select
Committee on Bay Area Infrastructure was conducted in December
2003 to examine the reasons behind the rapid rise in motor
vehicle fuel in California. At that hearing, several witnesses
testified that limited gasoline production in California
contributes to price increases and that California's supply of
transportation fuel is not keeping pace with growing demand.
Because of this, California faces potentially serious
transportation fuel imbalances over the next several years,
which require immediate, statewide attention. This bill will
expedite processing of permits for gasoline production at oil
refineries in California.
2)Supply and Demand
This bill addresses the increasing need for additional
transportation fuel in California in the next several years and
provides a number of opportunities to expedite the permitting of
petroleum infrastructure facilities to accomplish that.
However, the bill does not address any alternatives to
increasing capacity and efficiencies of petroleum
infrastructure.
In a recent report by both the CEC and the ARB on reducing
California's petroleum fuel dependence, "Reducing Petroleum
Dependence" (August, 2003), the report recommended that
California adopt a policy to reduce gasoline and diesel fuel
demand to 15% below 2003 demand levels by 2020, and to maintain
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that level thereafter. A number of options are suggested in the
report for meeting the goal, including using more fuel efficient
replacement tires, improving private vehicle maintenance,
doubling the fuel efficiency of light duty vehicles, using
natural-gal derived fuels as blending agents in diesel fuel, and
implementing fuel cell-powered vehicles.
3)Air Pollution Permit Streamlining Act
Existing law establishes the Air Pollution Permit Streamlining
Act that requires every air district to establish, by
regulation, a program to provide for the expedited review of
permits in California. The regulations are required to include
the following:
a) A precertification program for equipment that is
mass-produced (to allow permit applicants who purchase that
equipment to receive permits in an expedited fashion);
b) A consolidated permitting process for any source that
requires more than one permit;
c) An expedited permit review schedule, based upon the
types and amounts of pollution emitted from sources;
d) A training and certification program for private sector
personnel, in order to establish a pool of professionals
who can certify businesses as being in compliance with
district rules and regulations;
e) The development of a standardized permit application
forms that are written in clear and understandable language
and provide applicants with adequate information to
complete and return the forms; and,
f) An expedited appeals process.
In addition, air districts with over 500,000 people must
implement additional permit streamlining measures including
applicant meetings to expedite the permit process and
flexibility measures for permit streamlining.
This bill requires the ARB to take a number of measures to
address permit streamlining at both the state and air district
level in addition to the facilitator's responsibilities of
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looking at the overall issue of permit streamlining. The
Committee may wish to consider whether this language is
necessary, given that the air districts already have permit
streamlining measures in place.
4)CEC Investigation of the State's Petroleum Infrastructure
On May 19th, the CEC opened a proceeding to investigate the
state's petroleum infrastructure, specifically looking at
increasing demand of petroleum products and decreasing supply of
petroleum in California along with what strategic improvements
can be made to the petroleum infrastructure in California. The
proceeding was preceded with several months of informal meetings
with state, regional and local agency representatives regarding
the petroleum infrastructure. The first formal meeting will be
Monday, June 28, 2004. The Committee may wish to consider
whether this bill will produce duplication of efforts for CEC
staff that are already working on investigating the state's
petroleum infrastructure.
5)Office of Permit Assistance
In 1977, when the state enacted the Permit Streamlining Act, it
also created an entity within the Governor's Office of Planning
and Research known as the Office of Permit Assistance (OPA).
That office, though not focused on the petroleum industry, was
primarily charged with assisting applicants and state agencies
permitting processes in California. Typically, OPA would meet
very early on with project applicants to talk through the
project, what permits were going to be needed, by which
agencies, and what mitigation might also be needed.
In 1994, OPA was transferred to the Technology, Trade and
Commerce Agency (TTCA) where it sat until last year when the
TTCA was abolished, along with OPA. While this bill requires a
number of people to look at how to assist with permitting and
streamlining permitting in California, the Committee may wish to
consider whether it should also be looking at the type of work
OPA did and whether it should be incorporated into this bill.
6)Duplication of Responsibilities in the Bill
This bill requires the facilitator to consult with a wide
variety of government agencies, private entities and others
while addressing permit streamlining in California. However,
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the bill also has the CEC Commissioners meeting with many of the
same people to also address permit streamlining for petroleum
infrastructure. In addition, the bill has a third party, The
Governor or a person designated by the Governor, to address
permit streamlining. The Committee may wish to consider whether
to delete the overlapping responsibilities in the bill by
eliminating the roles of the CEC Commissioners and the Governor
and/or his designee.
7)Who Gets to be the Facilitator ?
This bill requires the Governor to appoint a statewide petroleum
infrastructure facilitator (facilitator) within the CEC to
intervene in rulemaking, permitting, and other proceedings by
state agencies that affect petroleum infrastructure projects in
the state and to suggest, actively push legislation on, and
report to the Governor and Legislature on best practices and
procedures for permit streamlining. The position sunsets under
the bill January 1, 2010. However, the bill does not set out
any standards for what experience the facilitator needs or
should have, nor does the position have to be accountable to the
CEC, the Governor or the Legislature. Finally, the appointment
of the facilitator does not need Senate confirmation, which
would be a typical balance on the part of the Legislature. The
Committee may wish to consider whether this position should be
better defined, (i.e., a staff person, CEC Commissioner, or
designee of the Governor or define what type of qualifications
the person should have) and whether the appointment should have
Senate confirmation.
8)Timeline for Agency Response
The bill requires state agencies involved in rulemaking,
permitting, and other proceedings that affect petroleum
infrastructure projects to provide the facilitator with
information on permits, streamlining practices, and laws, rules,
regulations policies and permit conditions that inhibit or
restrain petroleum infrastructure prospects. However, there is
no guidance in the bill as to how soon that information needs to
be to the facilitator. The Committee may wish to add an
appropriate timeline for state agencies to respond to the
facilitator in the bill.
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9)Is the Facilitator an Intervenor ?
Under the bill, the facilitator can intervene any rulemaking,
permitting, or other proceeding by state agencies that affect
petroleum infrastructure projects in the state. Generally, an
intervenor, in a rulemaking proceeding by a state agency
represents an interested party via comments and is compensated
for their activities. In this case, the facilitator would
represent the applicant in the rulemaking process and be able to
comment on behalf of the applicant. The Committee may wish to
consider whether this is an appropriate role of the facilitator
and whether the facilitator should have the role of the
participant on behalf of the applicant at all.
10)Does This Bill Apply to Offshore Oil ?
As written, it is unclear whether or not this bill would apply
to permitting and rulemaking of related offshore oil pipelines
and facilities. Because of this, the Committee may wish to
consider language to explicitly exempt any offshore oil
facilities, pipelines, and related facilities from this bill.
REGISTERED SUPPORT / OPPOSITION :
Support
Western States Petroleum Association
Opposition
American Lung Association
California Environmental Rights Alliance
California League of Conservation Voters
California State Pipe Trades Council
California State Association of Electrical Workers
Coalition for Clean Air
Coastal Commission
Environment California
Planning and Conservation League
Sierra Club California
South Coast Air District
Western States Council of Sheet Metal Workers
Analysis Prepared by : Kyra Emanuels Ross / NAT. RES. / (916)
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