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Environmental & Energy

Environmental Law

Katten Muchin Rosenman; Duane Morris; Greenberg Glusker; Barg Coffin Lewis & Trapp; SNR Denton

Allan Abshez, a partner with Katten Muchin, concentrates his practice on land use law and litigation. He has represented private and public clients in connection with major development projects across virtually every use sector, including mixed-use, shopping centers and retail, office, master-planned communities, entertainment, motion picture studios, hospitals, sports stadiums, educational facilities, redevelopment, energy, and public infrastructure. Mr. Abshez has also served as a city planning commissioner and as senior vice president, general counsel, and corporate secretary for Kaufman and Broad Home Corporation.

Tom Berliner, a partner with Duane Morris, is a water, energy, and environmental attorney with over 30 years of experience. He routinely represents public agencies, farmers and ranchers regarding water supply and water rights matters. He also represents entities in hydropower licensing and relicensing. In addition, Mr. Berliner represents parties regarding CEQA, NEPA, and endangered species matters. For 20 years he was a deputy city attorney with the city of San Francisco and has been in private practice with Duane Morris since 1998.

David Cranston chairs Greenberg Glusker's environmental department and its climate change and sustainability practice group. He has specialized in environmental law for almost 25 years. Mr. Cranston's broad-based practice ranges from litigation of complex environmental disputes to counseling on regulatory and policy matters. His clients include transportation, aerospace, and real estate companies, governmental entities and industry associations. He has been recognized in World's Leading Environment Lawyers and Southern California Super Lawyers.

Brian Haughton is a founding partner of Barg Coffin Lewis & Trapp, a San Francisco law firm specializing in environmental law and litigation. His practice focuses on environmental compliance counseling, litigation and administrative proceedings, and brownfield redevelopment. Brian has served as an adjunct professor of environmental law at Hastings College of the Law and has been repeatedly honored as a "Super Lawyer" by San Francisco Magazine in an annual survey of Northern California lawyers.

Nick Yost conducts a nationwide practice of environmental and natural resources law from SNR Denton's San Francisco office. He received the American Bar Association's award for Distinguished Achievement in Environmental Law and Policy in 2010. He focuses on permitting major projects and preparing NEPA documents and their defense in court. As general counsel of the White House Council on Environmental Quality, he drafted the federal government's NEPA regulations during the Carter Administration. He founded and was the first head of the environmental section of the California Attorney General's office.

California made history in November when it held the nation's first auction for carbon permits as part of its effort to reduce the greenhouse gas emissions that are driving climate change. It's a model that many hope will be replicated throughout the U.S. Our panel of experts from northern and southern California discussed the cap-and-trade program, as well as renewable energy permitting, a proposal for a peripheral canal, and other issues on November 5. They are Allen Abshez of Katten Muchin Rosenman; Thomas Berliner of Duane Morris; David Cranston of Greenberg Glusker; Brian S. Haughton of Barg Coffin Lewis & Trapp; and Nick Yost of SNR Denton. The roundtable was moderated by California Lawyer and reported by Krishanna DeRita of Barkley Court Reporters.

Moderator: What are some of the major issues counsel is discussing with clients regarding AB32?

Haughton: By the time this conversation reaches print, the California Air Resources Board (CARB) will have held its first greenhouse gas (GHG) allowance auction on November 14 under the California Global Warming Solutions Act (AB32). These allowances can be used to comply with GHG limits imposed under AB32. How long it will take to develop a robust market is an open question. Some clients are taking a wait-and-see approach.

Yost: AB32 and everything that it represents is very exciting. Whatever sides we are all on, I suspect that we all think that climate change is the most pervasive environmental issue we face. Since a lot is happening in the world and little has been happening in the U.S. given the failure in Congress to pass legislation, California has gone ahead. AB32 is our attempt to do something for ourselves and the world. A lot of eyes are on California, and having had a trial auction that seemed to work okay and with the real auction coming up in a few days, we are just about to get into it.

Abshez: Because California is acting first and alone, there's legitimate concern that increased fuel and energy costs will drive investment away from or out of the state. Being ahead of the pack is a worry. Why not wait for either a federal, or even North American, cap-and-trade approach?

Berliner: We've been talking about climate change in California for a long time, and the business communities have not paid a lot of attention mostly because it's beyond their horizons. They don't react to things that are 20 or 40 years away. They react to effects on the current quarter or year, and maybe five years out. But the impacts of Hurricane Sandy have been very immediate and something California is susceptible to. We had a massive flood in 1997. With all kinds of events coming together in a perfect storm - an El Nino year, a full moon, and major storm - we could have another disaster. South of San Francisco are major high-tech firms situated within the flood zone. For some companies climate change may not be on the agenda, but preparing for a flood is. And really, preparing for one is the same as preparing for the other. Either way it's a rising sea level. So there may be ways of raising these concerns in a more immediate business fashion.

But there's also the worry that California is too unfriendly a business environment and that's of concern as we have lost manufacturing here. Other than top universities, lifestyle, and a concentration of tech firms, why would you locate in California given all the challenges? If you are considering building a multibillion-dollar facility, you will probably think hard about locating it in California. If AB32 significantly increases the cost of doing business, and you start putting all of these things together, there's a compelling issue about the business environment.

Cranston: Keep in mind AB32's regulations are intended to be market driven. Regulated industries whose emissions are capped will have the opportunity to buy additional allowances from voluntary offset projects. I represent clients who are interested in developing voluntary offset projects. There are four vigorous protocols that CARB has approved. The only projects covered by protocols at this time are: livestock manure digesters, destruction of ozone depleting substances, forestry, and urban forests. So it's not a wide universe, but these could provide a very important source of credits to the regulated entities. Without them, allowances may become even more costly.

Unfortunately, there's a pending lawsuit challenging CARB's approval of the protocols, (Citizens Climate Lobby and Our Children's Earth Foundation v. CARB, San Francisco Superior Court, Case No. CGC-12-519554), claiming that the protocols do not assure that emission reductions are "additional." To be "additional" means the emissions reduction would not have occurred under a conservative "business as usual" scenario without the monetary incentive created from selling offset credits. Take livestock digesters, for example. California has thousands of dairies, most in the Central Valley. Most are family owned and it's just too expensive to put a digester on a manure lagoon to capture and destroy the methane gas. The economics don't work. But in its petition, the Citizens Climate Lobby (CCL) argues CARB can't make this "business as usual" economic determination on an industry-wide basis. Instead, CCL argues CARB has to guarantee that each individual project developer wouldn't have reduced these emissions otherwise. Doing that kind of economic analysis on a project-by-project basis is an impossible and impractical task that would bring the whole thing to a halt. We are hopeful the court will recognize that CARB has the ability and the discretion to interpret "additional" in the way that they've interpreted and applied it. If the court doesn't, it will be a huge setback not only for offset projects but the whole cap-and-trade system.

Yost: It's my understanding that the supplies of offset credits are well under what the potential demand will be, and that folks are looking to CARB to make more kinds of projects eligible as offset credits.

Cranston: The industries that can potentially develop offset projects are few. CARB is considering a few more protocols, including rice cultivation. It's hard to develop projects when the market for carbon allowances remains uncertain. As the market matures, the costs for allowances stabilize, and the legal challenges resolve, we should see a greater flow of capital for the development of new offset projects.

Haughton: I've seen recent price projections of $12 a ton, but some say that may be optimistic. CARB retains the power to revoke these allowances and for a buyer that's anxiety producing. We may need to wait for the evolution of insurance products to guard against that risk before this market really starts to flourish. Also, people's demands and efforts internally to reduce greenhouse gas production can drive down demand. It's kind of a squirrely market, but we'll know more in six months.

Berliner: That sounds optimistic given the tenuous nature of the contracts with CARB. It's very difficult to flesh out these projects on an individual basis. The Regional Water Quality Control Boards have handled a similar program in a very different way. They allowed, for example, dairy farms to form associations essentially that came together as a single unit around water issues. They do it to deal with run off of pollution in the streams, but it's the same thing with emissions and pollution to the air. Why not amalgamate a major sector of dairy farms in a San Joaquin Valley area and treat them as one. It's not an effort to consolidate the industry, but to consolidate those who want to take advantage of it.

Yost: The point that AB32 and other measures can potentially burden businesses in California has been an omnipresent issue. On the one hand, it certainly is accurate that you can have individually meritorious measures that cumulatively are onerous and that lead a business person to make a decision to go somewhere other than California. On the other hand, California has always been out in front on the environment. That same argument is made constantly about the California Environmental Quality Act (CEQA) and the about the coastal protection initiative. All the measures we adopt first are said at the time to be job killers, business deterrers, and so on. Yet somehow California manages to thrive. The attraction, some of which you laid out, overcomes the detriments associated with burdens imposed by environmental regulation. But - the balance requires sensitivity.

Abshez: There's a critical difference, however. Greenhouse gases are the same problem whether or not they're generated within the state. So if our policies drive business to lower-cost fuel and energy markets outside of California - or even overseas - we accomplish very little; the atmosphere keeps warming, global ice keeps melting, sea levels keep rising, and California loses jobs. When it comes to greenhouse gases, policies that result in "off-shoring" are not the best answer. We need a comprehensive, nationwide - and ultimately international - approach.

Haughton: California has been a leader in combating air pollution, and greenhouse gases are just one more pollutant as the Supreme Court tells us. So this could be another one of those situations like Prop 65, the Safe Drinking Water and Toxic Enforcement Act. Love it or hate it, its effects have been exported across the country. California has been exporting its environmental laws for a long time, and it's hard to know whether that has resulted in a net drag on the economy. There are probably economists who will argue that both ways.

Berliner: But we have examples of important California-based companies deciding to locate major facilities elsewhere. Intel just built an $8 billion facility in Oregon, and I believe they are about to build a second facility there. Apple just located a huge facility in Virginia. It would be nice if those things were in California, and you wonder what it would take to convince a company to not leave the state.

Cranston: CARB missed an opportunity to counterbalance the economic impact in California. CARB should have provided greater economic incentives for developing offset projects in California as opposed to giving equal treatment to offset credits generated elsewhere in the U.S.

Moderator: What has been the evolving role of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and common law claims in shifting liability for environmental contamination?

Cranston: CERCLA (also commonly known as the Superfund) is a very effective tool for recovering the costs of environmental cleanup from former owners, operators, and others. But CERCLA does not provide recovery of damages other than environmental cleanup costs. Where CERCLA may not work, private parties can look to state nuisance claims for recovery. One of the bigger issues is the dichotomy between a permanent and continuing nuisance. Whether a nuisance is continuing or permanent turns on whether the nuisance is "reasonably abatable." And the answer may have significant consequences as far as both the applicable statute of limitations and the recoverable damages. California case law has not been consistent or clear, and has resulted in decisions that can make it very difficult to recover diminution in value or increased costs of financing due to arbitrary distinctions between what is permanent or continuing; what are prospective damages and what are not. If we take the principles underlying California nuisance law and properly apply them, property owners should recover what they are entitled to. I expect that as the judiciary gets more experience with these issues, some of the ambiguity in the case law will be clarified and we will have better guidance. Every property owner should be able to recover the damages it has suffered as a result of the contamination caused by others.

Haughton: Another option is to bring a citizen suit under the Resource Conservation and Recovery Act (RCRA). Benefits include the absence of a petroleum exclusion and the availability of attorneys fees. Only injunctive relief is available, however, so if your client wants to maintain tight control over the cleanup approach and timing, then this may not be the most attractive remedy.

Cranston: Between CERCLA, RCRA, and nuisance claims, property owners have a good remedy for cleanup costs. Economic damages can be the bigger challenge.

Moderator: How is the law developing around the environmental aspects of permitting renewable energy projects in California on both federal and state lands?

Yost: A lot is happening in renewable energy worldwide and in California. While it's a political issue and has come up due to Hurricane Sandy, it's not solely a political issue. The Energy Policy Act of 2005 (Pub. L. No. 109-58) was enacted under President George W. Bush, which among many other things says that the Secretary of the Interior shall permit 10,000 megawatts of renewable electricity on public lands by 2015. The stimulus bill of 2009 has inducements to renewable energy. There are also DOE loan guarantees and Department of Treasury tax credit grants. Many states, including California, have enacted renewable portfolio standards whereby a utility must have "X" percentage of its electricity generated by renewable sources. That drives the utilities either to build renewable energy or to buy it from someone else, which in turn creates a market. According to BLM numbers from a year ago, there are 291 renewable energy projects under way in California. That's a big number. It excludes hydro and includes smaller sources like geothermal, but basically it's solar and wind. This has resulted in a good deal of litigation, something like 20 cases pending at federal court in California alone.

I'm counsel for a wind farm project in California's Imperial County where we went through the entire process - endangered species, NEPA, the works - but nonetheless are now in six different lawsuits, which run the gambit from NIMBYs to environmental organizations to Indian tribes.

It's an opportunity to work through the process. As far as the federal litigation, the defendants - typically the federal agency and an intervening applicant company that wants to build something - have lost only one case despite all sorts of challenges. The courts have looked at what the Congress had to say, looked at the deadlines for the projects and said, "This is the national priority. It's going first."

Abshez: The rapid emergence of these projects has pressed us into a policy collision. Renewable energy projects, which are greenhouse gas and energy independence 'friendly,' tend to consume a lot of land. For example, an 800-megawatt gas-fired plant, which compares well to renewables, requires about 150 acres, while a 400-megawatt solar project may require 4,000 acres. So solar and wind projects run into habitat and sensitive species issues where we don't have very evolved policy. Except where there are adopted Natural Community Conservation Plans, there isn't a sufficient consensus about the trade-offs involved. The acceptability of mitigation measures such as in lieu fees, translocating sensitive species, and creating replacement habitat are frequently fought out on a project-by-project basis, resulting in time-consuming and costly administrative and judicial delays.

Cranston: Do you think the designation of federal Solar Energy Zones by BLM on less environmentally sensitive land that has already gone through programmatic review will be a big part of that solution? By steering solar developments to these areas, will this help some of these projects get off the ground?

Yost: Yes, for exactly the reasons implicit in your statement.

Haughton: It's not all doom and gloom. California's executive branch has responded to these challenges with several initiatives. In 2011 CalRecycle issued a "Program EIR for Anaerobic Digestion Facilities," designed to expedite projects that take material from our waste stream and use it to generate renewable energy in the form of methane gas. In 2010, CARB issued "Air Quality Guidance for Siting Biorefineries in California," and just last February the California County Planning Director's Association issued a "Solar Energy Facility Permit Streamlining Guide," including a model ordinance. They don't sound terribly sexy, but they are all steps toward getting these projects approved more efficiently.

Abshez: Governor Schwarzenegger created a one-stop Renewable Energy Action Team to coordinate California and federal agencies. But that team is focused on the Mojave and Colorado desert regions. In other areas of the state, requirements are still decided on a project-by-project basis. What's acceptable in one circumstance is not acceptable in another, depending on who is interested and who is assigned. And, because we don't have legislative or administrative standards, the final requirements for any particular project are subject to challenge in litigation. Uncertainty is high. We should have a standards-based approach that doesn't leave things up to project-by-project review.

Berliner: The experience with hydro has been almost the opposite of wind and solar. There's a mandate to develop hydro. There are a lot of reservoirs that could generate small hydro, which essentially means below 30 megawatts. We dealt with one where the reservoir owner is not the entity developing the energy. You need permission from the Federal Energy Regulatory Commission to build these projects and the reservoir owners are saying, "I don't want the energy project interfering with my primary purpose of supplying water to a million people." Along comes an entity to develop hydro, and the federal government requires the reservoir be available to meet all federal requirements for energy, essentially threatening its primary purpose. It's a very difficult environment in which to develop these hydro projects.

Haughton: The regulatory structure also prefers some types of renewables over others. Some sources don't have to deal with the Federal Energy Regulatory Commission. It's a shame to see relative costs go up, presumably those associated with hydro, because it happens to fall within FERC's net.

Berliner: It's a regulatory scheme that does not recognize two competing interests. Clearly there's an incumbent owner. So let's put the hydro on the facility, but we will make it the subservient use of the particular installation, and that solves the problem. Both parties are happy. But that will require either a change in policy or more likely some legislation.

Yost: It's important that lawyers get involved very early in the process. We did a survey of Ninth Circuit reported decisions under the National Environmental Policy Act (NEPA), and two out of every three cases involving environmental assessments were reversed. Two out of every three involving environmental impact statements (EIS) were upheld, which is counterintuitive because the EIS deals with bigger environmental issues, but at the same time from a judge's perspective the most complete document possible has been produced.

There's significant litigation risk, but by working with the environmental staff and consultants, lawyers have an extremely important role to play in seeing that the laws are fully implemented such that you "bulletproof" the EIS or the Environmental Impact Report (EIR), ensuring everything that ought to be done is done. If you do it right, it will probably be upheld. It's important that lawyers not wait until there is litigation, but get involved early and in creating the administrative record, which in turn will be the primary determinants of the outcome of the litigation later.

Haughton: The process favors more capital-intensive projects. There's not enough money at stake with, for example, decentralized solar - where you put little solar units in every neighborhood. Say we pull out all the stops and hire Nick [Yost] to bulletproof the EIR. There's not enough money involved to include that in your pro forma for a small project. This process tends to tilt the playing field in favor of centralized power solutions.

Berliner: I've just finished a successful NEPA/CEQA - and hopefully a successful Endangered Species Act (ESA) - process where I represented parties that were going to be adversely impacted by the restoration of the San Joaquin River. Our NEPA comment letter was 135 pages. We raised a lot of issues and hired experts to provide comments and studies. Obviously it was a very expensive project with very high stakes. The end result is no NEPA or CEQA litigation because we got a document that addressed our issues. We've worked on this since 2006 and literally two weeks ago resolved major issues. Lawyers were involved from day one on both sides, and we reached a point where all the parties are saying, "We can live with this."

Yost: Well done and congratulations. In reference to the project I mentioned - during the course of the NEPA/CEQA process, because of the involvement of 15 different tribes and cultural resources associated with those tribes, as well as environmental resources, almost 100 wind turbines were dropped and many others were moved. Each action was highly site specific. The project remains economically viable and promising even with the smaller number of turbines. That is the system working the way that it's supposed to.

Moderator: Is it time to rethink the California Environmental Quality Act (CEQA)?

Abshez: We've been nibbling around the edges of CEQA for years. There's been an absence of thought leadership about reform because we're not asking the right questions, which to my mind should be: Does CEQA give us planning and environmental outcomes that are commensurate with the enormous investment California makes in the process? Are they measurably better outcomes than the approximately 35 states that don't use the process at all? Are they measurably better than the 15 states with less burdensome, but similar, processes? If we ask these types of questions, the answers guide us in new and interesting directions.

Haughton: CEQA reform is much talked about - Governor Brown recently called it "the Lord's work" - but has proved elusive, to put it kindly. None of the reforms that come to mind have been earthshaking. SB 226, which streamlines the CEQA process for certain renewable energy projects, has never been used. There are as yet no decisions under AB 900, which allows lawsuits to go straight to the Court of Appeal without stopping at the trial court. We are not seeing any action out of SB 375, which is designed to promote sustainable planning efforts to limit greenhouse gas emissions. I could go on. It's become a topic that has proved too divisive. Sacramento is where reform has to happen if it's going to happen.

Abshez: We should recognize that CEQA is a poor urban planning tool because "studying" urban area projects typically yields little in the way of truly useful information. For example, most urban CEQA fights revolve around localized project traffic studies. But project-by-project traffic studies are not a smart way to do urban transportation planning. Instead, we should use the example of the School Facilities Act (Cal. Gov't Code §§ 65995-65997, Educ. Code §§ 17620-17626), which replaced endless CEQA fights over "school impacts" with a straightforward development impact fee structure. The state could pass preemptive legislation requiring local jurisdictions to adopt transportation mitigation fees that fund improvement plans to serve growth. Everyone adding net square footage would pay at the building permit stage, not just projects subject to CEQA. There'd be more money for transportation improvements. The fee would constitute exclusive and complete mitigation of off-site impacts. Local jurisdictions would decide when, how, and where the money gets spent based on their local priorities and preferences. Maybe that priority is better transit, bike lanes, or pedestrian amenities instead of more capacity for the good old automobile. The point is: Let planners and elected officials set the priorities, and get them more dollars to deliver actual improvements. Stop diverting massive resources towards studies weighted primarily towards maintaining the status quo. The status quo isn't always environmentally positive. If we moved to this approach for transportation planning alone, a major-league source of CEQA conflicts would go away - and the public would get a better bang for its buck.

Haughton: There are examples in other areas of environmental law where that has worked. For example, the East Contra Costa County habitat conservation plan allows a project applicant to put money into a kitty that takes care of a habitat program for endangered species that encompasses the entire eastern county. But in the CEQA world, there are often project opponents for whom no carrot is big enough. The only answer they will accept is "no project." Those people will sue, and unless we have a really profound change in CEQA, we won't get rid of that, which concerns a lot of people that I represent.

Yost: I was the lead lawyer on the California Attorney General's amicus brief in Friends of Mammoth (Friends of Mammoth v. Bd. of Supervisors, 8 Cal. 3d 247 (1972)). The California Supreme Court picked up the argument and quoted from our brief, which made CEQA applicable to governmental permission of private activity. Later I drafted the federal government's NEPA regulations. So I've been extraordinarily closely involved in environmental impact assessments (EIA) generally. NEPA has been the most imitated American law in history on a worldwide basis. Over a hundred different countries have picked up environmental impact assessment. Almost everybody will agree with the generality of it: It's a good idea to look before you leap environmentally, to try and analyze something before you do it, and to try and do things right rather than clean up later. We have developed a very public-friendly process in which the governmental agency has an obligation to respond to a comment made on an EIR or EIS either by changing something or explaining why it's not being changed. There are very few places where government has to explain itself to the public. The public is familiar with their rights and generally there is very wide support for EIAs. But a lot of the work we do is for applicants, and I am acutely aware there are ways in which the process could and should be streamlined. Time is really the critical issue, but generally the statutes work. They do underscore the environmental problems and provide the occasion for addressing them.

Abshez: But for all that familiarity, I would venture that most Californians don't think our costly and time-consuming process gets measurably better outcomes than other states, and those in other states would probably agree. CEQA might have been a healthy innovation in 1969, but today it's got hardening of the arteries. We ought to focus on getting better - or at least more efficiently reached - outcomes. Another needed reform is correcting the fact that under CEQA there's no such thing as "harmless error." Any but the most trivial error is grounds for invalidating a decision. That's why so much money is spent on producing ever more elaborate MNDs and EIRs, with lawyers parsing every word trying to "bulletproof" them or find a "Gotcha." Let's correct course and require that parties suing under CEQA demonstrate that the alleged error was brought to the lead agency's attention before certification, and the error was material because it concealed an impact or precluded consideration of a mitigation measure. Let's end the "Gotcha" game and only reward CEQA attacks that help us to better outcomes.

Cranston: We represent proponents, opponents, and governmental agencies, so we see the benefits and the challenges of CEQA from all sides. Fundamentally it works. But what we want is a process that doesn't result in the gamesmanship we see from all sides. Often with last-minute comments or last-minute data thrown into the EIR, it's a game of "Gotcha," and it's not getting us to where we want to go. A lot of the recent reform bills are only Band-Aids, with limited effect and some of it smacks of special interest legislation for special projects. That doesn't create a sense of fairness or satisfaction with the process. To avoid the combative gamesmanship we often see requires a multi-step disclosure and comment process, but with safeguards against abuse including stricter requirements regarding stakeholder participation throughout the process.

Moderator: How might Governor Brown's proposed peripheral canals impact the future of water policy in California?

Berliner: There's a proposal to build a peripheral canal, which amounts to big, underground tunnels that move water from the northern part of the Sacramento/San Joaquin Delta under the Delta to serve parts of the Bay Area, San Joaquin Valley, and Southern California. The ESA is a major driver behind this, but so is the Delta's susceptibility to earthquake damage. In its current incarnation, we've been debating this since roughly 1987. It's hard to make definitive progress on these things, and the Delta is a great example of a regulatory scheme trying to preserve a reliable water supply for the seventh largest economy in the world that literally is susceptible to closure because of a small fish or an earthquake that breaks levees. One of the big challenges for lawyers is how do you get a result that your constituents can actually live with regardless of who you are representing. The regulatory scheme doesn't lend itself to an iterative process that leads to a reasoned result, and the California water problem is a great example of that, where it's constantly warring factions arguing over every little nuance. It's "Gotcha" litigation, whether it's the ESA, CEQA or something else.

Abshez: High-speed rail is another example of a major public works project encountering the same types of difficulties. When I lived there in 1980, Japan had only a single high-speed rail line. I looked forward to seeing a comparable system in California that would provide alternatives to automobile and air travel. Since then Japan has networked its nation with high-speed rail. Here, we don't have a single line close to opening. Instead, we're at the beginning of what is likely to be a decade or more of litigation.

Berliner: Some folks would like to exempt the Bay Delta projects, but that's not going happen. And at the other extreme, some want to kill the project or slow it down for a lifetime. In terms of high-speed rail, it's arguably still in its regulatory infancy.

Haughton: Pumping roughly 9,000 cubic feet of water per second out of the Delta is a lot. Environmentalists are dubious that the habitat restoration components of the proposed project will be sufficient. And there are certainly environmentalists who feel that if you take that much water out of the river, you will do irreparable harm. The governor has done a good job of bringing farming interests to the table, and in trying to emphasize looking at science to determine the best planning and conservation alternatives. But how will the commitment to science-based decisions be kept? Will taxpayers pay for habitat restoration? And if they say the cost is too great and demand that it be shifted to the water users, what if the users say, "That's the straw that broke the camel's back. We are out of here." The process has started in a good and healthy way, but the prognosis is very uncertain.

Yost: Allan [Abshez], you favor both the peripheral canal and high-speed rail and say the process has taken too long to get to an ultimate resolution. But what about those of us who don't know whether they are good ideas or not? My mind is open to persuasion about the peripheral canal, and I look forward to the process informing me on it. Rather than just getting to the end of the process, I think the timing of the process is important and part of its purpose is to inform people so they can make up their minds.

Abshez: That argument would hold more weight if we were dealing with purely academic issues. But, there's little disagreement that the Delta is in ecological crisis and that our water infrastructure could fail on a statewide basis in the event of a single Sandy-like storm or earthquake. We need a process that reasonably balances those types of problems and risks with the value of informing the public. Our environmental review and planning processes are not geared to addressing the challenges of these types of projects. Instead, they tend to paralyze us.

Cranston: It seems like for the last 30 years, the discussion about California water policy has largely been about the Delta. The Delta must be fixed. But I'd like to see a discussion of a more integrated state water policy. We have issues with the use and overdraft of unadjudicated groundwater basins in the San Joaquin Valley. As long as California is taking on the challenge of investing billions of dollars for the peripheral canal to better move water to the south, we should also deal with related groundwater management issues. We need to manage surface and groundwater efficiently, conjunctively and avoid permanently damaging over-drafted basins.

Berliner: A theme of today's conversation is handling issues based on crisis management. Nobody cares about NEPA or CEQA until somebody proposes a project that impacts them. But maybe we ought to have a forum that let's us debate the application of CEQA, but at the end we've got a decision. It's better than using a project like high-speed rail to be the driver for a CEQA reform debate. n



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