In the world of California water, nothing is a sure thing. But when you’re Governor Jerry Brown, even one step forward can seem like two steps back.

The seventeen billion-dollar plan to build two tunnels under the Sacramento-San Joaquin Delta (“Delta”) in California, currently known as California WaterFix (“CA WaterFix”), has been a concern for environmentalists and Central Valley landowners since the plan was initiated in 2005. But in the past two years, the Delta plan has experienced a rollercoaster ride of successes and setbacks. Formerly known as the Bay Delta Conservation Plan, CA WaterFix made headway this summer when, after an extensive ten-year environmental study and scientific inquiry, the Delta plan received the “go ahead” from both federal agencies responsible for the protection of species under the Endangered Species Act (“ESA”) and from the state’s Department of Fish and Wildlife. The U.S. Bureau of Reclamation and the California Department of Water Resources also completed their final Environmental Impact Statement and Environmental Impact Report last year in compliance with federal and state law. Despite overcoming these legal hurdles, construction of the thirty five–mile long tunnels is unlikely to start anytime soon. Experts anticipated the project could begin construction as early as next year, but concerns over cost distribution—in conjunction with current claims alleging that the plan violates the California Environmental Quality Act (“CEQA”)—are likely to slow, if not kill, CA WaterFix’s momentum.

Governor Brown and the California Department of Water Resources proposed the plan known as CA WaterFix. The controversial plan would take water from the Sacramento River and transport it south under several Delta islands via two tunnels located 150 feet underground. The tunnels would end at Clifton Court Forebay. Near the Forebay are pumps that send water south through California’s aqueducts. Proponents hope the Delta plan would improve water flows through the Delta and allow water to flow with fewer interruptions. Roughly thirty percent of municipal water in Southern California comes from Northern California via the Sacramento-San Joaquin Delta. State officials are fearful that the Delta’s current delivery system is outdated and harms the Delta’s ecosystem. They expect the twin tunnels will stabilize the water supply for two-thirds of California in the face of climate change, since the majority of the state’s water is located in the north, but the majority of the state’s population is located in the south. Large southern water districts, like Coachella, Highland, Rialto, Indio, Palmdale and inland San Diego, are predicted to increase their water consumption in coming years. California’s largest supply of clean water is dependent on fifty year–old levees, and experts worry the current system cannot adequately capture and store water when it is available.

Although state officials for the Delta plan argue that the tunnels will improve the Delta’s ecosystem, many environmental groups and government agencies in the Delta region are opposed to the tunnels. They believe that CA WaterFix cannot comply with the ESA, despite biological opinions from the state and federal agencies that suggest otherwise. The possible extinction of Delta smelt has been of particular concern. Consistent abuse (by, for example, overfishing) of one of the continent’s largest wetlands has contributed to the decline of Delta smelt in the area. Delta smelt, Chinook salmon, and steelhead are among the Delta-inhabiting fish protected under the ESA. Current challengers to the Delta plan’s compliance with the ESA likely hope for a result similar to the one in Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978), in which the Supreme Court ordered a permanent injunction against the construction of a controversial dam and held that the ESA prohibited completion of a dam where its operation would either eradicate an endangered species or destroy its critical habitat. The dam in Hill was nearly completed when environmental groups brought suit, and Congress had already allocated large sums of public money for the project. In this case, unlike in Hill, construction of the twin tunnels has yet to begin and funding for the project is insecure.

In compliance with the 2009 Delta Reform Act and pursuant to CEQA and the National Environmental Policy Act (“NEPA”), an Environmental Impact Report and an Environmental Impact Statement were finalized last December.

CEQA has historically proven to be a powerful weapon in the courtroom. In Citizens of Goleta Valley v. Board of Supervisors, 801 P.2d 1161 (Cal. 1990), the Supreme Court of California said the courts must “scrupulously enforce all legislatively mandated CEQA requirements.” CA WaterFix may be required to redo the environmental review process if the project’s challengers can prove that the constructions and functioning of the tunnels will harm wildlife, like the Delta smelt. As of the August filing deadline, at least fifty-eight environmental groups and local governments have sued under CEQA in opposition to the Delta plan. The plaintiffs include Sacramento Valley water agencies, Sacramento County, and San Joaquin County.

Many of the lawsuits’ main claims are that the environmental reviews were not properly conducted. The Golden Gate Salmon Association, the Natural Resources Defense Council, the Defenders of Wildlife, and The Bay Institute filed a joint claim against Secretary of Commerce Wilbur Ross, Administrator for Fisheries at the National Oceanic and Atmospheric Administration Chris Oliver, and the National Marine Fisheries Service on June 29, 2017. The plaintiffs’ main claim is that “reliance on the uncertain future mitigation measures to conclude that [CA WaterFix] will not jeopardize the [Chinook salmon] species or adversely modify its critical habitat violates section 7(a)(2) of the ESA.” They assert that a biological opinion’s no jeopardy conclusion must be “reasonably specific, certain to occur, and capable of implementation.” The Bay Institute, the Natural Resources Defense Council, and the Defenders of Wildlife filed a similar claim against Secretary of the Interior Ryan Zinke, the U.S. Fish and Wildlife Service, and its Director Greg Sheehan, also asserting that the biological opinions backing CA WaterFix’s proposal are inadequate.

In addition to the legal challenges, CA WaterFix has also struggled to secure sufficient funding for the project. Many Delta and Westland farmers hold the view that construction of the tunnels will disrupt Delta residents’ culture and lifestyle, so it is unsurprising that they do not want to bare any of the costs associated with the tunnels’ construction—and legally, they do not have to. Brown pledged that local water districts would bear all the costs of construction; however, a recent audit by the Interior Department found the federal government improperly subsidized farmers for a portion of the tunnels’ planning costs. California water districts may have to pay back the improperly contributed $85 million in taxpayer funds.

All the while, getting approval from water districts has been a whirlwind. Westlands Water District, California’s largest irrigation district and a major water agency served by the Central Valley Project, decided not to join CA WaterFix. The Westlands’s board voted against the project in mid-September, asserting the current financial structure of the project was not feasible. The Westlands District said it could not afford to support the project because of a unique cost-allocation formula imposed by the U.S. Bureau of Reclamation on the Central Valley Project. The cost-allocation formula, originating in a 1939 deal from the Roosevelt administration, exempts a large group of water users in the district from helping fund the Delta tunnels. The deal inflates Westlands customers’ costs by several billion dollars. Until recently, Westlands’s vote appeared especially discouraging, but the project is not doomed yet. The largest water district in Southern California, Metropolitan Water District of Southern California, did approve a $4.3 billion buy-in in October to support CA WaterFix. The vote of approval does not ensure the survival of the Delta project, but it is a step in the right direction. Silicon Valley’s water district, the Santa Clara Valley Water District, voted in mid-October to provide “conditional support” for the Delta project. The district offered to contribute to a smaller and less expensive project, offering $200 million instead of the expected $600 million. Brown and his administration are still advocating for twin tunnels, but if more water districts fully supported the building a single tunnel, Brown might have to seriously consider the idea.

The original plan envisioned that the largely urban agencies supplied by the State Water Project would pay fifty-five percent of the construction costs while the largely agricultural districts of the federal Central Valley Project, like Westlands, would pay forty-five percent. One suggested alternative to this financial plan is requiring wildlife refuges and farmers with senior water rights to bear some of the construction costs. However, neither group is legally obligated to contribute to the cost of construction, despite being first in line for the Delta water. It is fair to assume that farmers would be more willing to chip in for the project if it meant more water for them, but if the farmers’ water rights are already being satisfied, they cannot legally enlarge their water use anyway. Another consideration is the farmers’ economic stability and ability to fund a project of this size.

Major water purchasers were expected to continue to vote for or against the funding of CA WaterFix in the late months of 2017, but as of January 2018, the Department of Water Resources is still considering limiting the project to one tunnel instead. A revised plan may command a new set of environmental impact studies and other permits. The one-tunnel option also needs approval from the districts previously supporting the two-tunnels plan. It has also been suggested that rather than build the two tunnels, the state can increase water storage capacity (above and below the ground), reuse and recycle water, and build more water desalination facilities. The fifty-year old system currently in place does not allow the state to capture and store large amounts of storm water in the wetter years. Some state officials believe the Delta plan is the only option for serving the nineteen million Southern Californians. Backers have tweaked the Delta plan constantly since its introduction in 2005, and the plan might see additional changes in the future. Current lawsuits are likely to slow construction plans, especially considering the first round of biological opinions took nearly ten years. If the suits are successful and the opinions must be re-evaluated, construction could be stalled for years. To comply with environmental limits, one proposal has been to build a new diversion point in the Sacramento River in a northern delta that will feed the tunnels without harming fish populations. Current lawsuits will run their course over the next few years, but these suits are by no means a guaranteed halt on the project.

Kate Mailliard

Image: Delta Smelt. Flickr user USFWS/Peter Johnsen, Creative Commons.



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Alaska Wilderness League v. Jewell, 788 F.3d 1212 (9th Cir. 2015) (affirming the district court’s ruling that: (i) the Bureau of Safety and Environmental Enforcement’s approval of the challenged oil spill response plans was not arbitrary and capricious; (ii) the Endangered Species Act did not require the Bureau of Safety and Environmental Enforcement to consult with any environmental agencies before approving oil spill response plans; (iii) the Bureau of Safety and Environmental Enforcement was entitled to Chevron deference for its interpretation of the Oil Pollution Act; and (iv) the National Environmental Policy Act did not require the Bureau of Safety and Environmental Enforcement to do an environmental impact statement before approving an oil spill response plan).

The Outer Continental Shelf Lands Act (“OCSLA”) outlines the procedure for exploration and development of oil and gas resources offshore. This process has four stages. First, the Secretary of Interior creates a five-year leasing program under which operators may search and mine for oil and gas. Second, the Secretary must approve the leases under agreed upon terms and conditions. Third, the lessee must provide the Secretary with a plan of exploration and an Oil Spill Response Plan (“OSRP”) pursuant to the Clean Water Act (“CWA”). Fourth, after searching for oil and gas, and successfully finding either, the lessee has must submit a production and development plan to the Secretary for approval.

At the third stage, the Secretary of the Interior has delegated its power to the Bureau of Safety and Environmental Enforcement (“BSEE”) to approve OSRPs to prevent and respond to oil spills. The CWA requires these plans at four levels: national, regional, local, and individual. At the individual level, owners and operators must propose an OSRP for approval that outlines their response to a potential “worst case discharge” of oil or some other hazardous substance.

Shell Gulf of Mexico Inc. and Shell Offshore Inc. (collectively “Shell”) acquired three leases for offshore exploration and production—two leases in the Beaufort in 2005 and 2007, and one in the Chukchi Seas in 2008. Shell complied with all regulations at the time for intended exploration, but due to the Deepwater Horizon oil spill in 2010, the Secretary of the Interior placed a temporary moratorium on all offshore drilling. The United States Department of Interior required owners and operators to provide new information in all OSRPs after the moratorium ended. To comply with the new criteria, Shell updated its OSRPs for its three leases. BSEE approved the updated Beaufort and Chukchi Seas OSRPs.

Alaska Wilderness League, a coalition of environmental groups, sued Secretary of Interior, Sally Jewell, in her official capacity because of the approval of Shell’s three OSRPs. Shell intervened as a co-defendant. On cross-motions for summary judgment, the United States District Court for the District of Alaska (“district court”) ruled in favor of Jewell and Shell. Alaska Wilderness League appealed to the United States Court of Appeals, Ninth Circuit (“Court”). The Court reviewed the granting of summary judgment de novo and reviewed the record of the agency’s action under the arbitrary and capricious standard.

First, Alaska Wilderness League argued BSEE’s approval of the OSRPs was arbitrary and capricious because Shell assumed it would be able to recover ninety to ninety-five percent of any oil spilled in either of the seas via mechanical means. A figure that Alaska Wilderness League claimed was unrealistic and that Shell failed to support with any evidence. The Court did not agree with Alaska Wilderness League’s interpretation, finding instead that Shell could store, not recover, ninety to ninety-five percent of any spilled oil. Further, the Court found that BSEE did not rely on this information in approving Shell’s OSRPs. Therefore, the Court found that the record did not support Alaska Wilderness League’s argument. Accordingly, the Court concluded BSEE’s approval of the OSRPs was not arbitrary and capricious.

The Court next addressed Alaska Wilderness League’s argument that BSEE failed to consult with other agencies in order to comply with the Endangered Species Act (“ESA”). The Court disagreed. The Court reasoned that ESA only triggers consultation when the agency’s involvement is discretionary, and, in this case, BSEE’s approval of the OSRPs was non-discretionary. Therefore, the Court held that ESA did not require BSEE to do a consultation.

The Court then went through a two-step Chevron deference analysis to assess BSEE’s interpretation of the applicable sections of the CWA. At step one of its Chevron analysis, whether the statute in question is ambiguous, the Court found that the CWA was ambiguous in both its structure and its language. The Court found the CWA has ambiguous language because of three pertinent sections: (i) 33 U.S.C. § 1321(j)(5)(A)(i) requires an operator to “prepare and submit . . . a plan for responding, to the maximum extent practicable, to a worst case discharge;” (ii) § 1321(j)(5)(D) lists six requirements that the OSRP “shall” meet; and (iii) § 1321(j)(5)(E)(iii) states that if the OSRP meets all six requirements, then BSEE “shall” approve it.

Specifically, the Court found the text ambiguous as to whether BSEE has the discretion to consider any additional environmental factors in making its determination of an OSRP. The Court found that the “maximum extent practicable” language in § 1321(j)(5)(A)(i) suggested the agency had discretion in its approval of an OSRP. However, the Court also found §§ 1321(j)(5)(D) and 1321(j)(5)(E)(iii) to be a laundry list of requirements that an OSRP must meet. If an OSRP meets those requirements, then BSEE must approve the plan; removing any agency discretion. Additionally, the Court found the statute’s structure ambiguous because of the discretionary language in one section, and the rigid language in the one following it. The Court found this difference created “a statute whose halves do not correspond to each other – giving rise to ambiguity that calls for Chevron deference.” Under this finding of ambiguity, the Court found it must defer to BSEE’s interpretation of the statute as long as its interpretation is reasonable.

The Court then underwent the second step of the Chevron analysis to determine whether BSEE’s interpretation was reasonable. Courts must defer to an agency’s interpretation of an ambiguous statute as long as that interpretation is reasonable. The Court found that BSEE’s interpretation of the statute was reasonable. BSEE argued that § 1321(j)(5)(A)(i) mandated it to promulgate regulations that help operators follow the OSRP requirements listed in § 1321(j)(5)(D). Then, separately, § 1321(j)(5)(D)-(E) lists exactly what the OSRP shall include and the agency shall approve. The Court agreed with BSEE’s interpretation that the statute mandated the agency to publish regulations to outline how operators can comply with the list. The Court also agreed with BSEE’s interpretation that it could not consider anything more than the list when granting an OSRP. The Court, having found BSEE’s interpretation to be reasonable, deferred to the agency’s interpretation.

The Court also found that BSEE’s interpretation was consistent with longstanding agency policy. The Court explained how BSEE has a history of regulating in conformity with the goals of the Oil Pollution Act that amended the CWA. The legislative history of the Oil Pollution Act suggests that Congress meant to create specific requirements of OSRPs, not guidelines open to interpretation by the courts or agencies.

Lastly, the Court addressed Alaska Wilderness League’s four additional arguments. First, Alaska Wilderness League argued that the similarity in language between the requirements listed in § 1321(j)(5)(E) and the section of the statute governing federal response plans to spills subjected the approval of OSRPs to ESA consultation. However, the Court disagreed with this interpretation. Under the sections of the statute governing federal response plans, an ESA recommendation may prompt agency action, but the plan “shall include, but not be limited to” a number of factors. This federal response plan requirement, unlike that in § 1321(j)(5)(E), does not limit the factors to those listed.

Second, Alaska Wilderness League argued that the regulations contain no language to support approval of the OSRPs just because they address the clean up plan to some degree. The Court quickly dismissed this argument. The Court found that the statute states that the purpose of the OSRP is to prepare a response plan for an accident at sea resulting in release of oil, and that Congress ordered these plans be in compliance with “the Oil Pollution Act’s amendments to the Clean Water Act.” The Court deferred to BSEE’s interpretation that the OSRPs were sufficient and justly approved, despite any explicit language governing BSEE’s decision.

Third, Alaska Wilderness League argued that BSEE had discretion over whether OSRPs met the criteria in § 1321(j)(5)(E), thus triggering ESA consultation. The Court found this argument to be at odds with previous Supreme Court’s rulings. The Supreme Court previously held that “ESA cannot defeat an agency’s nondiscretionary statutory directive.” The Court held that BSEE’s act of granting OSRPs was nondiscretionary, and so it did not trigger any interagency review under ESA.

Lastly, Alaska Wilderness League claimed that BSEE violated the National Environmental Policy Act (“NEPA”) by failing to do an environmental impact statement (“EIS”) before approving the OSRPs. Under NEPA, all federal agencies must conduct an EIS before conducting any “major Federal action” that significantly affects the environment. However, the Court noted that there is an exception to this requirement when the environmental impact is the result of a decision over which the agency had no discretion. The Court ruled that because BSEE had no discretion over the approval of the OSRPs under the statute, it also had no discretion over the environmental impacts, making BSEE exempt from performing an EIS.

Accordingly, the Court affirmed the district court’s ruling.

D.W. Nelson, Senior Circuit Judge, dissenting.

Senior Circuit Judge Nelson agreed with the majority’s ruling that BSEE acted appropriately when it approved the OSRPs in question, but dissented to all other aspects of the majority opinion. Specifically, the dissent agreed with Alaska Wilderness League’s contention that BSEE’s action was discretionary, triggering an ESA consultation.

The dissent also disagreed with the majority’s finding that BSEE was exempt from performing a NEPA analysis. The dissent did not agree with the majority’s interpretation of the NEPA exception. The dissent argued that as a regulator of environmental consequences “the [BSEE] did in fact possess the kind of discretion that necessitated NEPA review.”

William James Tilton

Image: Deepwater Horizon oil spill, Gulf of Mexico. Flickr user Green Fire Productions, Creative Commons.