The Kern County Superior Court issued a critical ruling in favor of San Joaquin Facilities Management, Inc. (SJFM) regarding CalGEM’s handling of a Project Approval Letter (PAL) for the Fruitvale Oil Field. This ruling has significant implications for California’s oil and gas industry, particularly concerning CalGEM’s interpretation of the California Environmental Quality Act (CEQA) exemptions.
Ongoing Project Exemption Applied:
The Court determined that SJFM’s underground injection control (UIC) project qualifies for the "ongoing project exemption" under CEQA.
The ruling recognizes injection operations at the Fruitvale Oil Field, which began in 1959, as a normal and intrinsic part of pre-CEQA activities. The replacement of wells for continued operations does not constitute a new or expanded project.
Abuse of Discretion by CalGEM:
CalGEM was found to have abused its discretion by requiring the project to undergo an initial study process instead of recognizing it as exempt.
The agency improperly justified its decision based on the project being "controversial," which the Court ruled is not a valid basis under CEQA.
Implications for Industry:
Forcing Exemptions: The ruling underscores that CalGEM must apply CEQA exemptions where applicable, even in cases where the agency is reluctant to do so.
Ongoing Project Precedent: This decision reaffirms the applicability of the ongoing project exemption to fields with continuous injection activities, countering CalGEM’s hesitation to apply this exemption since the 2020 ruling in Association of Irritated Residents (AIR) v. DOGGR.
The Court directed CalGEM to approve the PAL and deemed SJFM to have exhausted all administrative remedies after six years of delays.
This ruling is key for operators dealing with delayed approvals and unwarranted CEQA reviews. It limits CalGEM’s discretion and reinforces protections for long-standing oil and gas operations. Our industry members can use this case to oppose arbitrary denials of CEQA exemptions and demand timely approvals for projects that qualify under the ongoing project exemption.