3. Issues Raised by the Subsequent MND/IS

Because KH Associates has resolved its differences with LGS by entering into an Amended and Restated Gas Storage Lease and Agreement, and now states that it supports the instant application, the only issues that remain are the CEQA matters discussed in the Subsequent MND/IS.

In our decision approving the first phase of the Kirby Hills Facility, D.06-03-012, we set forth an extensive discussion of the environmental issues raised by the proposed construction of that project, including the issues relating to the construction of the 5.9-mile pipeline that connects the Project's gas storage field and compressor station in the Montezuma Hills with the interconnection facilities near PG&E's Line 400. (D.06-03-012, pp. 13-26.) In view of the fact that LGS has argued in its application here that virtually all of the potentially-significant environmental effects resulting from Phase II can be reduced to less-than-significant levels by adopting the same mitigation measures set forth in the Mitigation Monitoring Plan appearing in the Final IS/MND adopted in D.06-03-012, there is no need to recapitulate that decision's discussion of all the environmental issues.

However, as noted in footnotes 3 and 5, LGS's application here acknowledges that the Mitigation Monitoring Plan adopted in D.06-03-012 did not address the issue raised by LGS's proposal (as part of the work of reconditioning two wells) to fill in approximately 1.17 acres of wetlands lying within the SMPMA. In order to address this issue, LGS has proposed APM B-7, which would require it to minimize the placement of fill material into the wetlands and, after consultation with the Corps of Engineers, the RWQCB, and BCDC, to "compensate for the permanent loss of wetlands at a minimum 1:1 ratio (one acre for every one acre filled)." (PEA, p. 2-17.)

In addition to this new measure, the Subsequent MND/IS suggests that we require LGS to undertake several additional mitigation measures beyond those proposed in its PEA. It is to these new measures that we now turn.

Although Phase II of the Facility will entail less construction than did the first phase, the new work will nonetheless be sufficient to raise air quality issues. Phase II would create temporary construction emissions, and ongoing emissions from the proposed compressor station and glycol dehydration system. Most of the Phase II construction, and essentially all of the operating emissions resulting from Phase II, will occur in the sparsely-populated western portion of the Kirby Hills Facility, which is under the jurisdiction of the Bay Area Air Quality Management District (BAAQMD). A small amount of the Phase II construction will take place at the metering station that makes up most of the eastern portion of the project, an area that is under the jurisdiction of the Yolo-Solano Air Quality Management District (Y-SAQMD). Although neither BAAQMD nor Y-SAQMD has fugitive dust rules that specifically regulate construction, both districts have CEQA guidelines on this issue that the lead agency may impose at its discretion.

The Subsequent MND/IS points out that the western portion of the Facility near the Montezuma Hills is a windy area, and that there is a potential for fugitive dust emissions and impact events when high winds occur. (Subsequent MND/IS, p. B-55.) In addition, the Subsequent MND/IS concludes that mitigation of the oxides of nitrogen and particulate matter emissions from Phase II's construction is necessary, because the adjacent San Francisco Bay Air Basin (SFBAB) and the Sacramento Valley Air Basin (SVAB), into which the emissions will be blown, are both non-attainment areas for particulate matter and ozone. The Subsequent MND/IS therefore concludes that the additional mitigation measures set forth below should be required, in addition to those proposed by LGS. We agree that these additional measures should be included in the Mitigation Monitoring Plan for Phase II, and we will require LGS to abide by them as a condition of receiving the authority granted in this decision. The additional air quality mitigation measures are:

1. During high wind events, construction areas that have visible dust emissions must be watered hourly at the source, and activities that cause dust emissions visible 100 feet from their point of origin must either be discontinued or reduced to limit the dust plume to less than 100 feet from the point of origin. In addition, construction within one-half mile of any downwind residence that causes visible fugitive dust must be discontinued when dust plumes remain visible more than 50 feet from their point of origin.

2. All diesel-fueled construction equipment must use fuel meeting the ultra-low sulfur certification specifications of the California Air Resources Board (CARB).

3. All diesel-fueled off-road construction equipment with engines of 50 hp or larger must meet USEPA/CARB Tier 1 engine standards, except for (a) equipment permitted by the local district or certified through CARB's statewide portable equipment registration program, or (b) any single, specialized equipment item that will be used for a total of less than 5 days during construction. (Subsequent MND/IS, pp. B-56 to B-57.)

In D.06-03-012, we pointed out that because the three components of the Kirby Hills Facility all lie within seismically-active areas, and because a fault rupture could result in an uncontrolled release of flammable natural gas that could damage project facilities and threaten personnel safety, we would require, as a condition of granting the requested CPCN, that there be an independent, third-party review of LGS's construction drawings and specifications, as well as independent monitoring of the Facility's construction to ensure compliance with all applicable laws, ordinances, regulations, and standards. (D.06-03-012 at 18-19.)

The Subsequent MND/IS raises the same seismic concerns with respect to Phase II of the Kirby Hills Facility. The Subsequent MND/IS notes that while "modern buried welded steel pipelines . . . have generally performed well" during seismic events, "pipeline ruptures have occurred where the pipeline has been placed in compression" at fault crossings, and that even in the absence of ruptures, "significant displacements have been experienced." (Subsequent MND/IS at B-89.) Because of these possibilities, the Subsequent MND/IS recommends that we require LGS to submit all of its construction drawings and specifications for an independent, third-party review and approval. The Subsequent MND/IS concludes that such a requirement will ensure there is "proper pipeline design at any fault crossings, areas subject to liquefaction, and adequate pipe wall design to withstand the combined pipe stresses, including those caused by ground shaking." (Id.)

The Subsequent MND/IS also points out that when LGS applied to build the first phase of the Kirby Hills Facility, an independent engineering analysis was performed to evaluate system safety and the risk of upset. This study was included as Appendix 4 to the Final IS/MND adopted in D.06-03-012. The study concluded that as long as all of the components of the first phase of the Kirby Hills Facility were designed and constructed in accordance with applicable laws, ordinances, regulations and standards, the first phase would have a less-than-significant effect upon the environment. However, the Subsequent MND/IS notes that the primary regulations applicable to Phase II, those set forth in 49 C.F.R. Part 192,8 do not require an independent, third-party review of either the design or construction of project components. Significantly, LGS did not include independent, third-party review of construction drawings and specifications as one of its APMs.

An additional factor to consider is that, as the Subsequent MND/IS points out, the resources of county authorities may not be sufficient to perform these tasks:

"Although the Solano County Public Works and Resource Management Departments may conduct a plan check and inspection of some project components (e.g., compressor building), they may not have the expertise to oversee the engineering and construction of the process facilities and pipeline components. The CPUC has the responsibility for enforcing the requirements of 49 CFR [Part] 192 for these intrastate pipeline facilities. To ensure that these regulations are complied with during the design and construction of the proposed facilities[,] and thus potential impacts are less than significant, [third-party design review and approval should be] required." (Id. at B-96.)

The independent, third-party review of construction drawings and specifications is addressed in Mitigation Measure HZ-1, which provides as follows:

"The applicant shall submit to the CPUC its construction drawings and specifications for independent, third party design review and CPUC review and approval. Project construction shall also be independently monitored to ensure compliance with all applicable laws, ordinances, regulations and standards. The applicant shall make payments to the CPUC for these design review, plan check and construction inspection services. These design review and construction observation services shall not in any way relieve the applicant of its responsibility and liability for the design, construction, operation, maintenance, and emergency response for these facilities." (Id.)

This mitigation measure is very similar to one, also designated HZ-1, that was included in the Final IS/MND adopted in D.06-03-012. (Final IS/MND, pp. B-103 to B-104.) In view of the concerns about seismic risks to pipelines and other factors discussed above, we will include Mitigation Measure HZ-1 in the Mitigation and Monitoring Plan for Phase II.

In D.06-03-012, we pointed out that although the local roadways in the area of the Kirby Hills Facility had low traffic volumes, construction of the Facility had the potential to increase congestion with respect to roads that provided regional access, such as State Route (SR) 12. To alleviate this impact and reduce it to less-than-significant levels, the Final IS/MND adopted in D.06-03-012 included Mitigation Measure TRA-1, which required LGS and its construction contractor to schedule all construction traffic to avoid peak commute hours along SR 12, and to encourage carpooling among construction workers. (D.06-03-012 at 20-21.)

The Subsequent MND/IS concludes that construction of Phase II of the Facility would raise the same traffic issues as did the construction of the first phase. As with the first phase, a maximum of 90 workers can be expected in the Phase II project area during peak periods of construction. Although LGS included a traffic mitigation measure among its APMs (APM T-1), it did not include TRA-1.

Because of concerns about potential congestion on SR 12, the Subsequent MND/IS recommends that we include in the Phase II Mitigation and Monitoring Plan the same Mitigation Measure TRA-1 that was adopted in D.06-03-012. We will accept this recommendation.

As pointed out in the Final IS/MND that we adopted in D.06-03-012, the portion of the Kirby Hills Facility that is west of Shiloh Road in Solano County lies within the Secondary Management Area (SMA) for the Suisun Marsh. The SMA is intended to serve as a buffer between the Primary Management Area (PMA) for Suisun Marsh and developed land. The Suisun Marsh Protection Plan permits natural gas production, storage and transportation within the SMA provided facilities are designed and constructed to avoid impacts to the PMA. (D.06-03-012 at 21.)

The Subsequent MND/IS points out that to implement the Suisun Marsh Protection Plan, Solano County requires a Marsh Development Permit for proposed uses within the SMA. As noted above, because Phase II will require LGS to fill in some wetlands in the PMA that may be considered waters of the United States, LGS will be required to obtain a permit from the U.S. Army Corps of Engineers pursuant to CWA § 404, as well as a water quality certification from RWQCB pursuant to § 401. These permits (as to the advisability of which we express no opinion), combined with any other conditions imposed in the required Marsh Development Permit, will ensure that any potential effects upon the environment are reduced to less-than-significant levels.

Similarly, implementation of the APMs that LGS has proposed in connection with Cultural Resources (which are set forth at pages B-33 to B-34 of the Subsequent MND/IS) will ensure that any impacts related to archaeological resources are less-than-significant.

8 Part 192 of 49 C.F.R. is entitled "Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards."

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