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TOM WHEELER:

Welcome to the Econews Report. I'm your host this week, Tom Wheeler, Executive Director of EPIC, the Environmental Protection Information Center. Joining me is my friend and colleague, Matt Simmons, Climate Attorney here at EPIC.

So we are going to be talking about the California Environmental Quality Act, CEQA or CEQA. And you'll hear us use the term CEQA a lot. This is how the law is referred to. No one really says the California Environmental Quality Act, but that's what CEQA stands for. So we're going to be talking about what the law does, why it's so fundamental and important to the protection of California and its natural resources, and the threats that it's under from both friends on the left and enemies on the right. So let's talk about CEQA and the basics of what the law does. So it's very similar to NEPA, the National Environmental Policy Act, in that it is a public disclosure and public participation law. So it requires the government to tell us things about what it plans to do and the likely environmental consequences of what it wants to do. And it also provides an opportunity for the public to both participate in this information gathering. Also, it allows the public to let decision makers know, frankly, that they either approve or don't approve of the thing that is being proposed.

Matt, you are a professor as well of environmental law at Cal Poly Humboldt. What is distinctive about this law?

MATT SIMMONS:

Yeah, so people often refer to CEQA as California's bedrock environmental law. And I think that that's a good way to think about it is that it's a law that a lot of our other environmental protections are sort of built on top of. And the reason for that is that what triggers CEQA is the state of California, either proposing itself or approving any project in the state. That is a very broad list of things. It's that first trigger for the state to actually look at something and say, hey, what is the environmental impact of this going to be? And without CEQA, I think the fear is that that trigger will happen a lot less frequently and that we will miss a lot more environmental impacts because there will be no one watching to see if they're even happening.

WHEELER:

And so CEQA also dates to that period of American life, where so many of our environmental laws are from. It's the late 60s, early 70s.

SIMMONS:

It was Governor Ronald Reagan who passed CEQA into law in 1970. It was actually the framework that the National Environmental Policy Act was based on.

WHEELER:

So bring us back in time so that we can remember what life was like before we had our suite of environmental laws, right? The Cuyahoga River caught fire?

SIMMONS:

A lot of offshore oil spills that destroyed beaches and wildlife frequently.

WHEELER:

We were building roads into roadless areas. We were cutting down our forests. We were choking on smog as a state. So it, it is from a period of time in which we hadn't done an adequate job considering the environmental consequences of our actions. And so we had this inflection point where we're like, Hey, maybe we should look before we leave.

SIMMONS:

It's a law that tells you to think about what you're doing before you do it. I mean, it was signed into law by Ronald Reagan. That concept used to be very bipartisan and just common sense, right? That we should consider the impacts of what we do. But obviously over the last 50 years, the law has become quite controversial, and there have been a lot of efforts to either shrink it or repeal it entirely.

WHEELER:

So it's an information disclosure and gathering law. It also has some teeth to it, and actually more teeth than its federal counterpart. And this is interesting because most federal environmental laws are more stringent than their state equivalents. So for example, the Federal Endangered Species Act has more teeth. It is more stringent than the State Endangered Species Act. But here, CEQA is better in this sense than the Federal National Environmental Policy Act, or NEPA, in that if a project is likely to produce significant environmental impacts, then an agency, the government, has an obligation to either mitigate those impacts to a point where they are not significant, mitigate those impacts to the maximum extent feasible, and then come to some sort of determination that the public interest still outweighs those significant impacts.

So we have a way in which projects are forced to be better. And so when you think of something like maybe the Last Chance Grade Project in Del Norte County, where Caltrans is proposing to put in a significant new tunnel that is going to result in the felling of old-growth trees in a state park.

SIMMONS:

Would you consider that a significant environmental impact?

WHEELER:

I would consider that and I believe Caltrans is also considering that a significant environmental impact. So because of CEQA, Caltrans is going to have to spend a lot of money on that project. And so we're going to have compensatory mitigation. We're going to have some sort of benefits that would not occur probably, but for CEQA as a result. And I think that all of us probably would find that to be a good thing, or most of us would find that to be a good thing. All right. And so then the, the last piece of CEQA that we've talked about is the, the democratization of decision-making. So no longer is government going to be able to do things in a black hole or a black box, the public has the right to information, it has the right to provide the government with information. And there's consequences if the government ignores environmental impacts that were raised by members of the public, and it provides an opportunity for the public to, to be able to tell decision-makers either, like, we think that this is a good thing, or we think that this is a bad thing.

And so it brings government closer to the people. And this is, this is meaningful. A lot of what EPIC does is we try to rally folks to talk to the government to say, Hey, this, let's say solar project is a good idea. It's going to reduce our reliance on greenhouse gas emitting fracked natural gas, or we will try to get people to say, Hey, this road widening project through a state park is, is a bad thing that you shouldn't do. And so it raises consequences for decision-makers for elected officials. If they go and do a bad thing, that I think is, is also good. Right. All right. So I think on the, on the flip side of this, these are also the things that have generated a controversy with the law. Do you want to talk a little bit?

SIMMONS:

I think we can just go through everything you just said, and opponents of CEQA will point out, yes, there's a lot of mitigation that Caltrans has to spend that also makes the Last Chance Grade Project more expensive, which is going to be passed on to the California taxpayer and make the project take more time. I think the democratization, as you put it, that allows citizens to comment on and even file lawsuits against decisions.

I think the argument that opponents of CEQA would make is that this isn't democratic, that it's a small subset of people. Who is Tom Wheeler at EPIC to decide whether or not a project should be able to happen? He's just one person. No one elected you to be in charge of anything. And so as much as EPIC feels that those are positive things, I think opponents of CEQA feel that they're negative things.

WHEELER:

And the law, as we've talked about, has consequences. It forces government spending. It also provides an opportunity for legal challenge, right? So most projects under CEQA are not challenged, but there are high profile projects that are. Epic's multi-decade now litigation against the, against the Richardson Grove project is, is one good example of that. Epic, together with our friends at Friends of Del Norte and, and other groups have, have stalled this project for a very long time, have increased the costs should it ever actually get completed. So, so there, there is frustration that, that we can use the courts to protect the environment. And so historically, a lot of the criticism of CEQA has come from one side, which is the chamber of commerce.

SIMMONS:

Wanting to build something, right? I mean, if Sequest slows down or potentially even stops something from getting done or being built, then it's obviously the people wanting to build the thing that are going to be the most frustrated.

WHEELER:

But also political libertarians and, and more Republican types. This is, this has been a pretty, until this recent moment, this has been a pretty partisan issue where it was one side of the political spectrum that has been in opposition to CEQA. And then you had folks like unions and enviros, pretty typical democratic aligned groups strongly in support. And as California is a strong democratic state, the state has historically been pretty protective of CEQA, but that's changed or, or it's changing. So we have an emergent interest, the, the so-called EMBs, yes in my backyard, who are validly responding to the absolutely existing housing crisis, most extreme in places like Los Angeles and San Francisco that have set their sights on CEQA. So Matt, can you explain the YIMBY critique of CEQA?

SIMMONS:

So I think, and I'll start with housing because that's where the YIMBY movement started. I think California and a lot of cities in California have some of the longest times to permit new housing units. San Francisco is probably the most famous example of this where it was taking like three or four years to approve an apartment building. And you compare that to other cities in other states where it takes a few months and people were saying this delay is causing the housing shortage that then redounds to higher rents and more unhoused people on our streets.

And so the YIMBY movement was a response to this that was basically saying like, how do we speed this up and how do we allow more housing to be built in more places? And there's a whole zoning component to that. There's a whole funding component to that. But the part that we're talking about today is CEQA and permitting, right? Like what is happening that is making these projects take so long to get permits? So.

WHEELER:

So you have the time delay, which also is a soft cost, as what developers will call it, an increase in soft costs for a project that could potentially be avoidable. And increasing the cost of a project also changes the marketability of a project. And we also have litigation again, as a risk. So we don't have to go very far to see where CEQA litigation has potentially, or tried to impact housing projects, right?

Look at Eureka, where the Arkley-backed, or the Security National-backed, Citizens for a Better Eureka, filed numerous lawsuits attempting to stop affordable housing development in the city of Eureka, with an argument that by building housing, we're going to have to force people to walk longer distances and while they are walking longer distances, they might encounter unhoused people and that is some sort of an environmental impact.

SIMMONS:

Yeah, and so back to that democratization comment, I think this is a really good example, right, where the city council of Eureka wants this project to be built. The citizens got a chance to vote on it with Measure F, and they wanted the projects to be built. And still you just have one guy with enough money to file lawsuits deciding that the project shouldn't be built. And so I think critics have a little bit of a point here that it's not inherently democratic to be giving people the power to file lawsuits on projects.

WHEELER:

Yeah. And again, I'm smart enough to, or maybe I'm not smart enough, but I have a big mirror in front of me to see that Epic has stalled a project that many people were in support of, which is the Richardson Grove project. Many other people were in opposition, but many people were in support. So again, what we view as, as a benefit is sometimes viewed as a detriment.

Okay. So, so this emergent YIMBY criticism is important. And, and let me be clear as the executive director of EPIC, I, I am sympathetic. And I believe that that the claim that CEQA has impacted housing construction in the state of California is true to a point. I think that CEQA is probably not the largest barrier to housing construction. It's other things like zoning, the cost of building. There's a whole, whole number of other issues, but CEQA truly could be an issue. And so EPIC, unlike some other environment groups has supported efforts to streamline CEQA as it's called to reduce the, the bite of this law for projects that we know are likely to be an environmental benefit.

If we co-locate housing near high frequency transit stops, that's great, right? We can get people onto light rail or buses and get them into work in a way that reduces the amount of greenhouse gases that are associated with their everyday life. So Epic has supported things like this. Other environment groups haven't with a concern that any attack on CEQA or any undermining CEQA is bad or concerns about perhaps gentrification. But so again, I will say, I think that there is some point to CEQA is harmful to good things that we want to see built that are going to improve the environment. But I will disagree with my friends in the Imbi movement that these are substantial barriers to housing production.

SIMMONS:

Yeah, and so getting back to that, and I think you were building up to this, but what the Yimby movement has successfully done is sort of reframed this argument from being one made by conservatives and chambers of commerce's to being one made by progressives and by people who think we should have more of the things that people need, right? And so this is the Ezra Klein Abundance Book, right? And I think there's a tendency among pro-CEQA folks to say, oh, well, if you believe this, you're no longer a progressive. But I think on the other side, you have to look at, okay, these people who have progressive credentials are now saying we believe this. How do we respond to that?

WHEELER:

Right. You are listening to the Econews Report. And we're talking about permitting reform and threats to the California Environmental Quality Act. And I should say that we have many corresponding crises at the same time. The housing crisis is one, but CEQA has also been invoked for other things. High-speed rail. High-speed rail, renewable energy. I mean, look at Humboldt County. The Terrigen project didn't die because of CEQA, but because of a conditional use permit vote. But CEQA was major to that fight. And opponents of the Terrigen project were able to mine the CEQA documents to come up with their ammunition to attack the project at the board of supervisors.

So there's truth to this idea that CEQA can get in the way of good things. And yet, CEQA is also still so vital. And let's give an example of why CEQA is so vital. Again, let's localize this and think about the proposed fish farm, the Nordic Aquafarms fish farm out on the peninsula. So an emerging technology recirculating aquaculture systems. This is different than other aquaculture proposals in the past. This isn't a net pen. This isn't just big stock tanks. This is a new technology. And the new technology is largely unproven and would come with some potential environmental risks that needed to be evaluated. I think it was a really good thing that that project went through full environmental analysis. I believe it forced Nordic Aquafarms to come up with a better plan, to be frank. And it resulted in environmental commitments from that project.

And this is where CEQA does best, right? Is here is this new thing that has potential environmental impacts. We should force people to think about those potential environmental impacts. We should generate science to understand what are we going to be doing to our environment so that we don't end up with something that we regret down the line.

SIMMONS:

So I'll be that debbie downer and said that that fish farm still hasn't been built, and so ...

WHEELER:

Yeah, I don't think that, I think that that is market forces more so than anything else or, or other permitting that is not the California Environmental Quality Act. So again, CEQA is only one part of the difficulty of building in California. So again, maybe if I were a YIMBY group, I would set my sights differently. I would maybe try to remove zoning obstacles for housing production.

SIMMONS:

That's what SB-79 does.

WHEELER:

And that was something that EPIC supported.

All right. So, so we've covered what CEQA does. We've covered some of the controversy. And so now we can get into what's before the legislature. So this last legislative session was different, categorically different than, than previous legislative sessions. I think probably since the early nineties, there has been attacks on CEQA in every legislative session. Again, mostly these have historically come from the right, but now we see folks like Senator Scott Weiner of San Francisco introducing bills that took very big swings at, at, at the fundamentals of the California Environmental Quality Act. Matt, what did, what did Senator Weiner do in this last legislative session that has enviros very concerned?

SIMMONS:

So Senator Wiener and then Assemblymember Wicks on the Assembly side introduced a pair of CEQA reform bills, AB609 and SB607, that would have really fundamentally changed the way CEQA works. SB607, we talked a little bit about how one of the tools that CEQA gives is the ability to file a lawsuit. Well, in order to get into court, you have to make a certain level of argument for a judge to even hear the case. SB607 would have raised the standard for that argument for everyone, for every project in California, making it much harder to file CEQA lawsuits on all projects, not just housing. Thankfully, that change was rejected, and those

WHEELER:

And I want to give a shout out to Senator McGuire on that, because this was sailing through the California Senate. It seemed like it was going to pass and as far as we understand, Senator McGuire used his weight as pro tem of the Senate to, to force more negotiation and consideration on, on sequel reforms. So kudos to Senator McGuire. If you are a frequent listener of this show, that we have high opinions of our good Senator from the North Coast.

SIMMONS:

Yeah. So instead of that broad change that would have affected all projects in California, what we got instead was sort of a grab bag of project types that the legislature has decided to exempt from the California Environmental Quality Act. And so the CEQA is a state law, and so the legislature has the power to decide X project won't have to go through CEQA anymore. And so this list is very long, and we're not going to get through all of them.

WHEELER:

and

SIMMONS:

It's a-

WHEELER:

There's some things that we would support in that list, like infill housing exemptions. Like if you're going to be building within an already urbanized area, like densification is a, is an inherent good thing. We like that here at Epic. Sorry if that's not your environmentalism, but welcome to 2025.

SIMMONS:

Frankly, when you look at climate change and you look at what tools do we have at our disposal to fight climate change, electrify your car, build solar panels, all these things, build dense housing where people are already trying to go is by far the most effective tool we have. It just, it just, it reduces all of these emissions, even just the density itself reduces emissions because you use a lot less per person in a big apartment building than you do building single family homes for all of those people.

WHEELER:

So this exemption would allow for most infill development, most infill housing development to go through without having to do more full-blown CEQA. Makes sense. It's already a low-risk activity. We've just codified that it's a low-risk activity, and there are still ways that projects that are unique, that might present different—

SIMMONS:

If it impacts habitat, if it impacts a wetland, if it is on a contaminated site, all those things still trigger CEQA. What will sail through are projects like the affordable housing projects in Eureka that are being built on a parking lot. There's not some environmental, some habitat or something that we need to protect on this parking lot in downtown Eureka.

WHEELER:

So there it makes sense. Housing makes sense. This is something that was responding directly to the YIMBY demand and is responding to the crisis that exists. But here's a frustration of mine, is that the legislature went beyond the housing crisis. I think it is legitimate for us to consider public policy responses to the housing crisis and to do things that ordinarily should be off limits, like touching the most important California environmental law. Here, I feel like they use the language of the housing crisis. They use the cause of the housing crisis as a way to do a broader effort of reform. So included in SB 131, which is one of the CEQA reform bills that passed at the direction of the governor. The governor put a lot of weight on the legislature to pass this. There was a carve out for something called advanced manufacturing. So advanced manufacturing will now no longer have to go through CEQA. Matt, I'm not familiar with what advanced manufacturing is. What is advanced manufacturing?

SIMMONS:

Who knows, Tom?

WHEELER:

That was a joke, that was a joke you.

SIMMONS:

Right. So actually, the legislation cites to a section of its tax code, essentially. It was, you used to be able to get a tax credit for building one of these advanced manufacturing facilities. And so this list of potential projects, it's like semiconductors, it's things for renewable energy, but then it also uses this incredibly vague language that says something like, any manufacturing facility that improves on a previous process. I don't know. I feel like any new advanced manufacturing facility built in 2025 is going to improve on some process from like 1980. So are all manufacturing facilities now advanced manufacturing facilities and therefore exempt from CEQA? No one can really give a straight answer because this is not. And so examples of projects that have had this happen before, semiconductor facilities, it was one mine that used a more effective mining technique. It's really an incredibly broad definition that they've used here.

WHEELER:

And so unlike the infill housing example, these are not low risk activities by any stretch of the imagination.

SIMMONS:

Yeah, so in Santa Clara County, there are actually a whole bunch of former semiconductor industry facilities that are now superfund sites that need to be cleaned up because chemicals from these sites leaked into the groundwater and are polluting the community. And so the idea that we are now saying, this is passing the law. We should clarify this. This is currently the law of California. These semiconductor facilities that have caused superfund sites in the past are exempt from all of CEQA. Infill apartment buildings don't cause superfund sites. And so they are in a different category in the mind of EPIC from these like mechanical manufacturing facilities.

WHEELER:

So SB 130, SB 131, two of the CEQA reform bills passed the legislature, signed into law by the governor. Now the legislature is, so and having regrets, I would say, right?

SIMMONS:

Let's talk about it. So there's something called a budget trailer bill where basically the governor says if you don't pass this bill, I won't sign the budget and therefore California will stop functioning as a government.

WHEELER:

So Gavin Newsom said, I'm going to take my ball and I'm going to go home, if you don't...

SIMMONS:

It's literally putting like a ticking time bomb on your piece of legislation that you like. And so Gavin Newsom said, I like this EMB stuff. And he likes advanced manufacturing in particular, apparently. And he said, I am going to attach a ticking time bomb to this, and if you don't pass it, the state of California is going to stop functioning.

WHEELER:

So these bills were introduced on a Friday afternoon.

SIMMONS:

and then voted on on a Monday. Yeah.

WHEELER:

So we had.

SIMMONS:

Or Tuesday I think

WHEELER:

Like 75 hours

SIMMONS:

Yeah, the minimum bylaw is 72, and I think they did it in 75. Yeah.

WHEELER:

So I don't think a lot of legislators knew what they were voting on, if I'm to be not very generous, knew what they were voting on when they voted passes. The governor was putting an extreme amount of pressure on the legislature and saying, you gotta do this. I'm the governor of the state of California, I'm not gonna pass a budget unless you vote for this.

SIMMONS:

Even as they were voting yes on this, they made statements to the effect of, we are going to need to fix some of this. This is not done. We need to come back and fix this. And so we are now, the legislature is back in session, and we are pushing for them to fix these bills. And the two most egregious things that happened, obviously there are people who are upset about a whole bunch of things, but the two most egregious things that happened are that advanced manufacturing exception that we just talked about, which Epic and our allies across the state are advocating be totally removed from the language. The other big change that we need is, I said earlier that there was an exemption from the exception when habitat is impacted for any of these CEQA processes. That definition of habitat is not broad enough, and it doesn't include things like habitat that is being worked into a plan to conserve certain species and things like that.

And so that definition needs to be made broader so that that trigger of, oh, this project will impact habitat, is triggered more easily. And so those are the two big asks that EPIC and a whole extremely large, like 300 organization coalition wrote a letter asking the legislature to change. We put out an action alert last week asking you to do this. If you haven't done that, you can still do it. Go bother your state senator and assembly member and also Governor Newsom, because these are really, really significant changes that will impact communities all across the state.

WHEELER:

All right, so sequel is under threat, long live sequel.

SIMMONS:

Well, and so I want to, I want to talk a little bit more about this too, because Gavin Newsom is not done with his attacks on CEQA.

WHEELER:

And the Abundance agenda, to go back to Ezra Klein's book, appears to be ascendant in some form. A lot of people have bought into this idea that we've overregulated in the state of California. And so the thing that enviros have long held dear, regulations, are now a threat under some idea that they're getting in the way of necessary progress.

SIMMONS:

Yeah. And so another proposal, and this is currently getting, I think they actually had the hearing on Wednesday, August 20th. Gavin Newsom is concerned that California is not drilling enough oil. In Kern County, there has been a proposal to increase oil drilling for years that a coalition of environmental groups and environmental justice groups have been fighting off through litigation and CEQA. Gavin Newsom has introduced legislation that would basically exempt certain oil wells from CEQA moving forward. This is just nakedly a anti-environment. I mean, at least with like solar panels or something, you can claim that it's in order to fight climate change, but exempting oil wells is the opposite of fighting climate change.

And so it's literally just an argument about affordability and keeping gas prices low. And so just, I have written letters to Assemblymember Rogers and Senator McGuire asking them to oppose anything like this. I think the climate crisis demands that California take leadership, especially now that Donald Trump is taking a wrecking ball to all of our federal climate action. And so the idea that we would follow suit by exempting oil wells from CEQA is just so, I don't think I can capture how angry I am about this. It's, it's such a betrayal.

WHEELER:

Matt is complaining a lot in the office about this. I will, I will confirm the passion in his feelings. I just am tired of Governor Newsom running for president while governor of California. I think he should knock it off and continue to be a progressive leader of a progressive state instead of whatever this new schtick is pretending to be Donald Trump on Twitter and cozying up to oil and gas companies. No thanks.

All right. Well, this has been another episode of the Econews Report. Join us again next week on this time and channel for more environmental news from the north coast of California.