APPENDIX 4.8 - REG. REG: Greenhouse Gas Regulations

APPENDIX 4.8 - REG REG: Greenhouse Gas Regulations

APPENDIX 4.8 REG: GREENHOUSE GAS REGULATIONS Climate change has relatively recently become widely recognized as a threat to the global climate, economy, and population. As a result, the climate change regulatory setting at the international, federal, state, regional, and local levels is complex and evolving. This section identifies key legislation, executive orders, and seminal court cases related to climate change that are germane to the Modernization Project greenhouse gas (GHG) emissions. The regulatory setting is particularly relevant in evaluating (GHG) impacts for California Environmental Quality Act (CEQA) purposes because legal and regulatory requirements, as well as other policies and initiatives, restrict GHG emissions and reduce them gradually over time. This evolving regulatory regime in turn factors into the analysis of the Baseline against which Project impacts are evaluated to make a significance determination under CEQA. 1.1 INTERNATIONAL PROVISIONS The Kyoto Protocol, adopted on December 11, 1997, is an international agreement that is linked to the United Nations Framework Convention on Climate Change (UNFCCC, 1998). It sets targets and timetables for 37 industrialized countries and the European community for reducing GHG emissions. The targets amount to an average of 5% reduction against 1990 levels over the 5-year period from 2008 to 2012. Negotiations after Kyoto have continued in an attempt to address the period after the first commitment period of the Kyoto Protocol concluded at the end of 2012. In Durban, South Africa, in 2011, parties to the protocol agreed in principle to negotiate a new comprehensive and legally binding climate agreement by 2015 and to enter it into force for all parties from 2020. However, significant divisions remain in determining the parameters of any such new protocol, including its enforcement mechanisms and the degree to which developing economies will begin to be subject to binding emissions targets. 1.2 FEDERAL PROVISIONS Although the U.S. is not a party to the Kyoto Protocol, in 2002, President George W. Bush set a national policy goal of reducing the GHG emission intensity (tons of GHG emissions per million dollars of gross domestic product) of the U.S. economy by 18% by 2012 (NOAA, 2002). The goal did not establish binding reduction mandates. Rather, the U.S. Environmental Protection Agency (EPA) A4.8-REG-1

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 began to administer a variety of voluntary programs and partnerships with industries that produce and use synthetic gases to reduce emissions of particularly potent GHGs. 1.2.1 US Supreme Court Ruling in Massachusetts et al. v. Environmental Protection Agency The Bush Administration's approach to addressing climate change was challenged in Massachusetts et al. v. Environmental Protection Agency, 549 U.S. 497 (2007). In this decision, the U.S. Supreme Court held that the EPA was authorized by the Clean Air Act to regulate carbon dioxide (CO 2 ) emissions from new motor vehicles. The court did not mandate that the EPA enact regulations to reduce GHG emissions, but found that the only instances in which the EPA could avoid taking action were if it found that GHGs do not contribute to climate change or if it offered a reasonable explanation for not determining that GHGs contribute to climate change. 1.2.2 Endangerment Finding On December 7, 2009, the EPA Administrator issued an "endangerment finding" and a "cause or contribute finding" under Section 202(a) of the Clean Air Act, concluding that GHGs threaten the public health and welfare of current and future generations and that motor vehicles contribute to GHG pollution. These findings do not impose any requirements on industry or other entities. However, this action was a prerequisite to finalizing the EPA s proposed GHG emissions standards for light-duty vehicles (EPA, 2009; EPA, 2010; and DOT, 2010) and provided the basis for adopting new national regulations to mandate GHG emission reductions under the federal Clean Air Act. 1.2.3 EPA Rulemaking The following sections summarize EPA s recent regulatory activities with respect to various types of GHG sources. 1.3.1.1.1 Stationary Sources This section describes EPA s recent regulatory activities with respect to stationary sources, which are sources of pollutants that do not move from one location. The Chevron Refinery is a stationary source. Other examples of stationary sources include power plants, gas stations, incinerators, boilers, and houses. 1 1 Houses use electricity for lighting, space heating and cooling, and potable water conveyance. Greenhouse gas emissions associated with the generation and transmission of electricity are known as indirect greenhouse gas emissions. Regulatory actions to A4.8-REG-2

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR 1.3.1.1.2 Mandatory Reporting Rule Congress passed The Consolidated Appropriations Act of 2008 (HR 2764) in December 2007, requiring reporting of GHG data and other relevant information from large emission sources and suppliers in the United States. The rule is referred to as 40 CFR Part 98 Greenhouse Gas Reporting Program (GHGRP). The stated purpose of the rule is to collect accurate and timely GHG data to inform future policy decisions. Facilities that emit 25,000 metric tonnes of GHGs or more per year are required to submit annual reports to EPA. Suppliers of certain products that result in GHG emissions if released and facilities that inject CO 2 underground for geologic sequestration are also subject to the rule. This program is expected to cover approximately 85% of the nation s GHG emissions and applies to roughly 10,000 facilities, including the Chevron Richmond Facility. The EPA s new reporting system will provide a better understanding of GHG sources and will guide development of policies and programs to reduce emissions. The data also will allow the reporters to track their own emissions, compare them to similar facilities, and aid in identifying cost-effective methods to reduce GHG emissions in the future. 1.3.1.1.3 Tailoring Rule In May 2010, the EPA issued the "Tailoring Rule" establishing permitting requirements for GHG emissions under the Prevention of Significant Deterioration (PSD) and Title V Operating Permit programs. A determination of the Best Available Control Technology (BACT) for GHGs is a requirement established by the program in the same manner as it is done for any other PSD regulated pollutant. The Tailoring Rule sets thresholds for GHG emissions that define when permits under the PSD and Title V Operating Permit programs are required for new and existing industrial facilities. This rule generally establishes that first-time new construction projects that emit GHG emissions of at least 100,000 tons per year and modifications at existing facilities that increase GHG emissions by at least 75,000 tons per year are subject to PSD. The rule also establishes that facilities that emit or have the potential to emit at least 100,000 tons per year CO 2 e will be subject to Title V permitting requirements. Each new source or modified emission unit subject to PSD is required to undergo a BACT review. 1.3.1.1.4 U.S. Supreme Court Review of GHG Regulations for Stationary Sources On October 15, 2013, the U.S. Supreme Court granted certiorari to address the permissibility of the EPA s determination that its regulation of GHG emissions from new motor vehicles triggered a statutory requirement for the EPA to reduce indirect greenhouse gas emissions from electricity usage are described in more detail in Section 4.6, Energy. A4.8-REG-3

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 regulate GHG emissions from stationary sources. Petitioners assert that the trigger for the EPA to regulate GHG emissions from stationary sources should be whether the EPA has promulgated a National Ambient Air Quality Standard for GHGs, instead of whether GHGs are regulated under any provision of the Clean Air Act. If the Supreme Court determines that the proper trigger for stationary source GHG regulation has not yet occurred, it would have potentially significant implications for the EPA's current stationary source GHG permitting rules (e.g., Tailoring Rule) under the PSD and Title V programs. The Supreme Court's decision is expected by early summer of 2014. 1.3.1.1.5 Climate Action Plan and New Power Plants In June 2013, President Barack Obama issued a Climate Action Plan to reduce carbon pollution. The Climate Action Plan established a multi-faceted approach to reduce carbon pollution, ranging from calling for carbon pollution standards for new and existing power plants, to new federal funding for renewables, to directing the development of new efficiency standards for appliances and federal buildings, among other measures. In accordance with the President's Climate Action Plan, the EPA issued a new proposal on September 20, 2013 for a rule under Section 111 of the federal Clean Air Act establishing the first carbon pollution standards for new power plants. The EPA's proposed rule would set separate standards for natural gasfired stationary combustion turbines and for fossil fuel-fired utility boilers and integrated gasification combined cycle units. The standards limit CO 2 emissions to between 1,000 and 1,100 pounds CO 2 per megawatt-hour electricity generated, depending on the type and size of the unit. As proposed, the new source performance standard would not apply to currently operating power plants or permitted plants that began construction before September 20, 2013. It also would not apply to units undergoing modification or to reconstructed units, to liquid oil-fired stationary combustion turbine electric utility generating units, to low capacity factor units that sell less than one-third of their power to the grid, or to plants that do not burn fossil fuels (e.g., plants that burn only biomass). The public comment period for the proposed regulation closes 60 days after the date of publication of the proposed rule in the Federal Register (EPA, 2013a; EPA, 2013b). 1.3.1.1.6 Mobile Sources This section describes the EPA s recent regulatory activities with respect to mobile sources, which include vehicles that operate on roads and highways as well as non-road vehicles, engines, and equipment. Examples of mobile sources include cars, trucks, construction equipment, lawn mowers, railroad locomotives, ships, and airplanes. A4.8-REG-4

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR 1.3.1.1.7 Corporate Average Fuel Economy First enacted by Congress in 1975 as part of the 1975 Energy Policy Conservation Act in response to the 1973-1974 oil crises, Corporate Average Fuel Economy (CAFE) standards seek to reduce energy consumption by increasing the fuel economy of passenger cars and light-duty trucks. The CAFE regulation requires each car manufacturer to meet a standard for the salesweighted fuel economy for the entire fleet of vehicles sold in the U.S. in each model year. Fuel economy, expressed in miles per gallon (mpg), is defined as the average distance traveled by an automobile (in miles) per gallon of gasoline or equivalent amount of other fuel. The National Highway Traffic Safety Administration (NHTSA) of the U.S. Department of Transportation (DOT) administers the CAFE program, and the EPA provides the fuel economy data. NHTSA sets fuel economy standards for passenger cars and light-duty trucks sold in the U.S. while the EPA calculates the average fuel economy for each manufacturer. 1.3.1.1.8 EPA and NHTSA Joint Rulemaking for Vehicle Standards In response to a U.S. Presidential Memorandum Regarding Fuel Efficiency Standards dated May 21, 2010, the EPA and NHTSA are taking coordinated steps to enable the production of a new generation of clean vehicles, through reduced GHG emissions and improved fuel efficiency from on-road vehicles and engines. In April 2010, the EPA and NHTSA issued a Final Rulemaking establishing new federal GHG and fuel economy standards for model years 2012 to 2016 passenger cars, light-duty trucks, and medium-duty passenger vehicles. The agencies extended the national program of harmonized GHG and fuel economy standards to model years 2017 through 2025 in a joint Final Rulemaking issued on August 28, 2012. These standards are projected to achieve a fleet-wide average CO 2 emission level of 163 grams per mile in model year 2025. (This would be equivalent, on a mpg-equivalent basis, to 54.5 mpg if all of the CO 2 emissions reductions were achieved with fuel economy technology.) In addition, on August 9, 2011, the EPA and NHTSA finalized regulations to reduce GHG emissions and improve fuel efficiency of medium- and heavy-duty vehicles, including large pickup trucks and vans, semi-trucks, and all types and sizes of work trucks and buses. The regulations incorporate all on-road vehicles rated at a gross vehicle weight at or above 8,500 pounds, and the engines that power them. Under the regulations, fuel economy will be improved and GHG emissions will be reduced in model years 2014-2018. 1.2.4 Additional Federal GHG Rules and Policies In addition to the rules and regulations developed with respect to stationary and mobile sources, discussed above, various other federal developments have A4.8-REG-5

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 occurred that aim to reduce GHGs from other sources, including land use activities. 1.3.1.1.9 Energy Independence and Security Act On December 19, 2007, President Bush signed the Energy Independence and Security Act (EISA) of 2007. Among other key measures, the EISA would do the following, which would aid in the reduction of national GHG emissions: 1. Increase the supply of alternative fuel sources by setting a mandatory Renewable Fuel Standard (RFS) requiring fuel producers to use at least 36 billion gallons of biofuel in 2022. 2. Set a target of 35 mpg for the combined fleet of cars and light trucks by model year 2020, and direct NHTSA to establish a fuel economy program for medium- and heavy-duty trucks and create a separate fuel economy standard for work trucks. 3. Prescribe or revise standards affecting regional efficiency for heating and cooling products, procedures for new or amended standards, energy conservation, energy efficiency labeling for consumer electronic products, residential boiler efficiency, electric motor efficiency, and home appliances. Additional provisions of the EISA address energy savings in government and public institutions, promotion of research for alternative energy, additional research in carbon capture, international energy programs, and the creation of green jobs. 1.3.1.1.10 American Recovery and Reinvestment Act On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act (ARRA) of 2009. ARRA was passed in response to the economic crisis of the late 2000s, with the primary purpose to maintain existing jobs and create new jobs. Among the secondary objectives of ARRA was investment in green energy programs, including funding the following through grants, loans, or other funding; private companies developing renewable energy technologies; local and state governments implementing energy efficiency and clean energy programs; research in renewable energy, biofuels, and carbon capture; and development of high efficiency or electric vehicles (The Recovery Act, 2009; EPA, 2009). 1.3.1.1.11 Renewable Fuel Standards (RFS1 and RFS2) Created under the Energy Policy Act of 2005, the RFS program established the first renewable fuel volume mandate in the United States. The original RFS program (RFS1) required 7.5 billion gallons of renewable fuel to be blended into gasoline by 2012. Under the EISA of 2007, the RFS program was expanded to A4.8-REG-6

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR include diesel and to increase the volume of renewable fuel required to be blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022. In addition, it requires the EPA to apply lifecycle GHG performance threshold standards to ensure that each category of renewable fuel emits fewer GHGs than the petroleum fuel it replaces. In January 2011, the EPA established the volume requirements and associated percentage standards that applied in calendar year 2011 for cellulosic biofuel, biomass-based diesel, advanced biofuel, and total renewable fuel (RFS2). The final percentage standard sets 8% of renewable fuel per total volume. The rule also announced the 2011 price for cellulosic biofuel waiver credits ($1.13 per credit) and the EPA's assessment of the aggregate compliance provision for domestic feedstocks. The regulation increased the volume of fuel required to be blended into transportation fuel from 12.2 billion gallons in 2009 to 74 billion gallons by 2022; this includes 16.0 billion gallons for cellulosic biofuel, at least 1 billion gallons for biomass-based diesel fuel, 21.0 billion gallons for advanced biofuel, and 36.0 billion gallons for renewable fuel. 1.3.1.1.12 Council on Environmental Quality National Environmental Policy Act Guidelines on GHGs On February 18, 2010, the White House Council on Environmental Quality (CEQ) published draft guidance on the consideration of GHGs and climate change for National Environmental Policy Act (NEPA) analyses (Sutley, 2010). It recommends that proposed federal actions that are reasonably expected to directly emit 25,000 metric tonnes of CO 2 e per year should prepare a quantitative and qualitative NEPA analysis of direct and indirect GHG emissions. The draft guidance provides reporting tools and instructions on how to assess the effects of climate change. The draft guidance does not apply to land and resource management actions, nor does it propose to regulate GHGs. CEQ received public comment on this guidance for 90 days. Although CEQ has not yet issued final guidance, various NEPA documents are beginning to incorporate the approach recommended in the draft guidance. 1.2.5 Voluntary Programs The following voluntary programs developed by the EPA provide opportunities for industry, the EPA, and other organizations in both the public and private sectors to work together to reduce GHG emissions (EPA, 2013d). 1.3.1.1.12.1.1.1 Center for Corporate Climate Leadership The EPA's Center for Corporate Climate Leadership serves as a resource center for all companies looking to expand their work in the area of GHG measurement and management. A4.8-REG-7

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 1.3.1.1.13 Combined Heat and Power Partnership The Combined Heat and Power (CHP) Partnership is a voluntary program to reduce the environmental impact of power generation by promoting the use of CHP, which is an efficient, clean, and reliable approach to generating power and thermal energy from a single fuel source. 1.3.1.1.14 Green Power Partnership The Green Power Partnership is a voluntary partnership between the EPA and organizations that are interested in using green power, which is electricity produced from a subset of renewable resources, such as solar, wind, geothermal, biomass, and low-impact hydropower. 1.3.1.1.15 National Clean Diesel Campaign The EPAs National Clean Diesel Campaign (NCDC) promotes diesel emission reduction strategies. The NCDC works to reduce the pollution emitted from diesel engines across the country through the implementation of varied control strategies by working with manufacturers, fleet operators, air quality professionals, environmental and community organizations, and state and local officials to reduce diesel emissions. NCDC activities include developing new emissions standards for locomotive and marine diesel engines; and promoting the reduction of emissions for existing diesel engines, including using cleaner fuels, retrofitting and repairing existing fleets, and reducing idling, among others. 1.3.1.1.16 State and Local Climate and Energy Program The EPA also administers the State and Local Climate and Energy Program, which provides technical assistance, analytic tools, and outreach support to state, local, and tribal governments (EPA, 2013c). 1.3 MULTI-STATE AREA PROVISIONS The Western Regional Climate Action Initiative (WCI) was established in 2007 by the governors of five U.S. states (Arizona, California, New Mexico, Oregon, and Washington) as a partnership to implement a regional, economy-wide cap-andtrade system to reduce global warming pollution. By the end of 2008, the partnership had expanded to include Montana, Utah, and four Canadian provinces (British Columbia, Manitoba, Ontario, and Quebec). The WCI partners set a goal of reducing the region's GHG emissions from the electricity, industrial, and transportation sectors to 15% below 2005 levels by 2020. By December 2011, California and Quebec had adopted cap-and-trade regulations based on WCI recommendations, while the rest of the partner states declined to actively implement a cap-and-trade program. The partnership was A4.8-REG-8

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR then streamlined to include only California and the four Canadian provinces actively implementing or considering cap-and-trade programs. In May 2013, CARB adopted a final rule linking California's and Quebec s cap-and-trade programs (as of January 1, 2014) for the purpose of allowing the two entities to mutually recognize each other s compliance instruments. In October 2013, California and Quebec entered into an agreement to integrate and harmonize their cap-and-trade programs. 1.4 CALIFORNIA PROVISIONS California has adopted various administrative initiatives and also enacted a variety of legislation relating to climate change, much of which sets aggressive goals for GHG emissions reductions within the state. However, none of this legislation provides definitive direction regarding the treatment of climate change in environmental review documents prepared under CEQA. In particular, the amendments to the CEQA Guidelines do not require or suggest specific methodologies for performing an assessment or thresholds of significance, and do not specify GHG reduction mitigation measures. Instead, the CEQA Guidelines amendments continue to rely on lead agencies to choose methodologies and make significance determinations based on substantial evidence, as discussed in further detail below (CNRA, 2009c). Consequently, no State agency has promulgated binding regulations for analyzing GHG emissions, determining their significance, or mitigating any significant effects in CEQA documents. The discussion below provides a brief overview of CARB and Office of Planning and Research (OPR) documents and of the primary legislation that relates to climate change and that may affect the emissions associated with the Project. It begins with an overview of the primary regulatory acts that have driven GHG regulation in California, which underlie many of the GHG rules and regulations that have been developed. 1.4.1 Executive Order S-3-05 (State-Wide GHG Targets) California Executive Order S-03-05 (June 1, 2005) establishes the goal of reducing GHG emissions to 2000 levels by 2010, to 1990 levels by 2020, and to 80% below 1990 levels by 2050. Although the 2020 target is the core of AB 32 and has effectively been incorporated into AB 32, the 2050 target remains the goal of the Executive Order only. 2 2 On November 6, 2013, the BAAQMD Board passed a resolution adopting the 2050 target of 80 percent below 1990 levels. Details of this resolution are described in the Regional Provisions section of this Regulatory Setting section. A4.8-REG-9

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 1.4.2 Assembly Bill 32 (Statewide GHG Reductions) The California Global Warming Solutions Act of 2006 (Assembly Bill (AB) 32) was signed into law in September 2006 after considerable study and expert testimony before the Legislature (State of California, 2006a). The law instructed CARB to develop and enforce regulations for the reporting and verification of state-wide GHG emissions. The bill directed CARB to set a state-wide GHG emission limit based on 1990 levels, to be achieved by 2020. The bill set a timeline for adopting a scoping plan for achieving GHG reductions in a technologically and economically feasible manner. The heart of the bill is the requirement that state-wide GHG emissions be reduced to 1990 levels by 2020. Based on CARB s calculation of 1990 baseline emissions levels, California must reduce GHG emissions by approximately 28.5% below business-as-usual (BAU) predictions of year 2020 GHG emissions to achieve this goal. In July 2011, CARB revised its BAU GHG emission estimate for 2020 in order to account for the recent economic downturn in its emission projections (CARB, 2011c). The estimate presented in the Scoping Plan (596 million metric tonnes CO 2 e (MMT CO2e) was based on pre-recession, 2007 data from the Integrated Energy Policy Report. CARB has updated the projected BAU 2020 GHG emissions to 545 MMT CO2e. AB 32 requires CARB to adopt rules and regulations in an open public process to achieve the maximum technologically feasible and cost-effective GHG reductions. Key AB 32 milestones for CARB s actions include the following: June 30, 2007: Identification of discrete early action GHG emissions reduction measures. On June 21, 2007, CARB satisfied this requirement by approving three early action measures (CARB, 2007b). These were later supplemented by adding six other discrete early action measures (CARB, 2007c). January 1, 2008: Identification of the 1990 baseline GHG emissions level and approval of a state-wide limit equivalent to that level and adoption of reporting and verification requirements concerning GHG emissions. On December 6, 2007, CARB approved a state-wide limit on GHG emissions levels for the year 2020 consistent with the determined 1990 baseline (CARB, 2007a). January 1, 2009: Adoption of a scoping plan for achieving GHG emission reductions. On December 11, 2008, CARB adopted Climate Change Scoping Plan: A Framework for Change (Scoping Plan), discussed in more detail below (CARB, 2008). A4.8-REG-10

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR January 1, 2010: Adoption and enforcement of regulations to implement the discrete actions. Several early action measures have been adopted and became effective on January 1, 2010 (CARB, 2007b; CARB, 2007c). January 1, 2011: Adoption of GHG emissions limits and reduction measures by regulation. On October 28, 2010, CARB released its proposed cap-andtrade regulations, which would cover sources of approximately 85% of California s GHG emissions (CARB, 2010d). CARB s Board ordered CARB s Executive Director to prepare a final regulatory package for cap-and-trade on December 16, 2010 (CARB, 2010a). January 1, 2012. GHG emissions limits and reduction measures adopted in 2011 become enforceable. 1.3.1.1.17 Scoping Plan As noted above, on December 11, 2008, CARB adopted the Scoping Plan to establish an overall framework for the measures that will be adopted to reduce California s GHG emissions. CARB determined that achieving the 1990 emission level would require a reduction of GHG emissions of approximately 28.5% below what would otherwise occur in 2020 in the absence of new laws and regulations (referred to as business as usual [BAU] ). The Scoping Plan evaluates opportunities for sector-specific reductions, integrates all CARB and CAT early actions and additional GHG reduction measures by both entities, identifies additional measures to be pursued as regulations, and outlines the role of a capand-trade program. Many of these measures and regulations have become effective on January 1, 2012. The key elements of the Scoping Plan (CARB, 2008) include: Expanding and strengthening existing energy efficiency programs as well as building and appliance standards; Achieving a state-wide renewables energy mix of 33%; Developing a California cap-and-trade program that links with other Western Climate Initiative partner programs to create a regional market system and caps sources contributing 85% of California s GHG emissions; Establishing targets for transportation-related GHG emissions for regions throughout California, and pursuing policies and incentives to achieve those targets; Adopting and implementing measures pursuant to existing state laws and policies, including California s clean car standards, goods movement measures, and the Low Carbon Fuel Standard; and Creating targeted fees, including a public goods charge on water use, fees on high global warming potential gases, and a fee to fund the administrative A4.8-REG-11

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 costs of the State of California s long-term commitment to AB 32 implementation. In 2009, a coalition of environmental groups brought a challenge to the Scoping Plan alleging that it violated AB 32 and that the environmental review document (called a "Functional Equivalent Document") violated CEQA by failing to appropriately analyze alternatives to the proposed cap-and-trade program. On May 20, 2011, the San Francisco Superior Court entered a final judgment ordering that CARB take no further action with respect to cap-and-trade rulemaking until it complies with CEQA (California Air Resources Board, et al., v. Association of Irritated Residents, et al., 2011). CARB appealed the decision on May 23, 2011. The portions of the Scoping Plan that do not relate to cap and trade remained valid during the litigation. While the appeal was pending, CARB prepared a supplement to the Functional Equivalent Document that included the analysis that the trial court had determined was inadequate under CEQA. CARB certified the supplement to the Functional Equivalent document and readopted the Scoping Plan on August 24, 2011 (CARB, 2011b). On June 19, 2012, the California First District Court of Appeal upheld the Scoping Plan and affirmed CARB's approval of the Scoping Plan as in compliance with AB 32 (Association of Irritated Residents, et al., v. California Air Resources Board, et al., 2012). In connection with the preparation of the supplement to the Functional Equivalent Document, CARB released revised estimates of the expected 2020 emissions reductions in consideration of the economic recession and the availability of updated information from development of measure-specific regulations. Incorporation of revised estimates in consideration of the economic recession reduced the projected 2020 emissions from 596 MMT CO2e to 545 MMT CO2e (CARB, 2011c). Under this scenario, achieving the 1990 emissions level would require a reduction of GHG emissions of 118 MMT CO2e, or 21.7% (down from 28.5%), to achieve in 2020 emissions levels in the "BAU" condition. The 2020 AB 32 baseline was also updated to account for measures incorporated into the inventory, including Pavley (vehicle model years 2009-2016) and the Renewables Portfolio Standard (RPS) (12% to 20%). Inclusion of these measures further reduced the 2020 baseline to 507 MMT CO2e. As a result, based on both the economic recession and the availability of updated information from the development of measure-specific regulations, achieving the 1990 emission level would now require a reduction of GHG emissions of 80 MMT CO2e or a reduction by approximately 16% (down from 28.5%) to achieve in 2020 emissions levels in the "BAU" or No Action Taken (NAT) condition (CARB, 2011b, CARB, 2011c). On October 1, 2013, CARB released a discussion draft first update to the Scoping Plan. The discussion draft recalculates 1990 GHG emissions using the IPCC Fourth Assessment Report (AR4) released in 2007. The first draft update to the A4.8-REG-12

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR Scoping Plan states that, based on the AR4 global warming potentials, the 427 MMT CO2e 1990 emissions level and the 2020 GHG emissions limit would be slightly higher than identified in the Scoping Plan, at 431 MMT CO2e (CARB, 2013b). Based on (1) the revised estimates of expected 2020 emissions identified in the 2011 supplement to the Functional Equivalent Document, and (2) updated 1990 emissions levels identified in the draft first update to the Scoping Plan, achieving the 1990 emission level would require a reduction of 76 MMT CO2e (down from 80 MMT CO2e) or a reduction by approximately 15% (down from 28.5%) to achieve in 2020 emissions levels in the "BAU" or No Action Taken (NAT) condition. The Scoping Plan identifies over 70 measures for reducing GHG emissions in sectors including transportation, electricity and natural gas, water, green buildings, industry, recycling and waste, and agriculture. Many of these measures incorporate laws, policies, and measures that are not solely driven by the AB 32 directive, including ship electrification (shorepower), high speed rail, RPS, and the Goods Movement Emission Reduction Plan. Regulatory development for other measures is ongoing. Of these measures, 44 were identified as Early Action Measures, which were adopted by CARB and made enforceable in 2010. These measures included regulations affecting landfills, motor vehicle fuels, refrigerant in cars, port operations, and many other sources. Specific measures discussed in the Scoping Plan that are relevant to the Project include: Cap and Trade Renewable Portfolio Standard Low Carbon Fuel Standard Advanced Clean Cars Heavy Duty Truck Greenhouse Gas Regulation (SmartWay) Goods Movement Vessel Speed Reduction Freight Transport Efficiency Energy Efficiency and Co-Benefits Assessment for Large Industrial Sources Refinery Flare Recovery Process Improvements Removal of Methane Exemption from Existing Refinery Regulations These are further discussed in following sections. The Scoping Plan notes that local governments are essential partners in the effort to reduce GHG emissions, and that they have broad influence and, in some cases, exclusive jurisdiction over activities that contribute to GHG emissions. The Scoping Plan encourages local governments to adopt goals for reducing municipal GHG emissions and move toward adoption of a goal for A4.8-REG-13

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 reducing community emissions. These targets should parallel the State s commitment to reduce GHG emissions by approximately 15% of current levels by 2020. The Scoping Plan also observes that [l]ocal governments have the ability to directly influence both the siting and design of new residential and commercial developments in a way that reduces GHGs associated with vehicle travel, as well as energy, water, and waste (CARB, 2008) and that [i]ncreasing low-carbon travel choices (public transit, carpooling, walking and biking) combined with land use patterns and infrastructure that support these lowcarbon modes of travel, can decrease average vehicle trip lengths by bringing more people closer to more destinations. (CARB, 2008) It also notes that regional targets would be set and achieved on a regional basis through the Senate Bill (SB) 375 implementation process, which maintains regions flexibility. SB 375 is discussed below. 1.3.1.1.18 Energy and Co-Benefits Assessment of Large Industrial Facilities In May 2011, CARB adopted the Regulation for Energy Efficiency and Co-Benefits Assessment of Large Industrial Facilities (CCR Title 17, Subchapter 10, Article 4, Subarticle 9). Stationary sources that emitted greater than 0.5 MMT CO2e in 2009 and transportation fuel refineries and cement plants that emitted greater than 0.25 MMT CO2e in 2009 are subject to this regulation. The regulation required these facilities to conduct a one-time assessment of the facility s fuel and energy consumption and emissions of GHGs, criteria pollutants, and toxic air contaminants. As part of the assessment, facilities were required to identify potential energy efficiency improvement projects for equipment, processes, or systems the cumulatively account for at least 95% of the facility s total GHG emissions. Assessment reports were due to CARB by December 15, 2011 (CARB, 2013f). The Chevron Facility is subject to this regulation (CARB, 2013d) and submitted the assessment report in accordance with the requirements of the regulation. On June 6, 2013, CARB published the Refinery Sector Public Report summarizing the information received from the assessment reports for all refinery facilities in California (CARB, 2013c). In the report, a total of 76 potential energy efficiency improvement projects were identified for the Facility. These efficiency measures targeted boilers, electrical equipment, engines, and thermal equipment. Of those 76 measures, Chevron has completed or has started implementing 57 measures. Two of the projects were completed in 1992 and 1995, while the remaining projects were implemented between 2006 and 2011. Ten measures have been identified to be scheduled for the future and 9 projects are currently under investigation. In total, GHG emission reductions are estimated to range between 322,300 608,600 MT CO 2 e, reflecting an increase A4.8-REG-14

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR in energy efficiency at the facility. CARB intends to prepare a final report with its conclusions and recommendations, based on the sector reports, in 2013. 3 1.3.1.1.19 California Mandatory Reporting Rule CARB adopted the California Mandatory Reporting Rule in December 2007 (CCR Title 17, Subchapter 10, Article 2). In December 2010, CARB adopted proposed revisions to support a California GHG cap-and-trade program and to harmonize with the Federal Rule. The revised rule, in effect starting January 1, 2012, eliminates many of the differences between the federal and California rules, though some remain. Additional modifications and clarifications were made to the rule in 2012 rulemaking and took effect starting January 1, 2013. The California Mandatory Reporting Rule requires the reporting of GHG emissions from essentially the same source categories specified in the EPA Mandatory Reporting Rule, but with some differences. Most of the differences in the rules are related to ensuring that all sources subject to the California capand-trade regulations will also be subject to the California rule, and that GHG emissions reporting for those sources will meet the requirements of the cap-andtrade program. Additionally, California requires that emission reports be verified by a third party, and that sources emitting less than the federal reporting threshold but more than the California reporting threshold are subject to abbreviated reporting requirements. 1.3.1.1.20 Cap-and-Trade Program The California Global Warming Solutions Act of 2006 (AB 32) allowed, but did not require, CARB to include among the mechanisms intended to reduce GHG emissions a system of market-based declining annual aggregate emission limits. The legislation required CARB to develop a Scoping Plan to describe the various mechanisms that would be used. In turn, the Scoping Plan, approved by CARB on December 11, 2008, directed CARB staff to develop, among other programs, a cap-and-trade mechanism that would apply a declining aggregate cap on GHG emissions 4 and provide a flexible compliance system using tradable instruments. On October 20, 2011, CARB adopted the final cap-and-trade regulation (CCR Title 17, Subchapter 10, Article 5). The program started on January 1, 2012, and will proceed in compliance phases, the first of which began on January 1, 2013. In the first phase, the program will apply to electric utilities, importers of electricity, and specified industries, including refineries. Approximately 350 electric utilities 3 The CARB report has not been issued as of the publication date of this report. 4 The cap-and-trade regulation applies to the following GHGs: carbon dioxide (CO 2 ), methane (CH 4 ), nitrous oxide (N 2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF 6 ), and nitrogen trifluoride (NF 3 ). A4.8-REG-15

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 and approximately 600 industrial facilities were included in the initial phase of the program. In 2015, importers and distributors of fossil fuels will be added to the program in the second phase. The program will impose a cap on the total GHG emissions from covered entities in the state, and the quantity of emissions allowed under the cap will decrease each year, ultimately reaching the goal of returning state-wide GHG emissions to 1990 levels by 2020. (The quantity of allowed emissions actually increases between 2014 and 2015, but that is to account for the addition of the fuel importers and distributors and additional electricity importers to the program; the net effect is to reduce overall GHG emissions.) To encourage emission sources to emit less as the cap decreases, allowances, or permission to emit GHGs, will be made available in decreasing quantities. Allowances will be both freely allocated and auctioned off. The amount of freely given allowances will decrease over time, and the severity of the decrease will vary by industrial sector, with those thought to be less vulnerable to out-of-state competition receiving fewer allowances more quickly. Similarly, the amount of allowances available for purchase at auction will decrease. The intent is to make reducing GHG emissions more financially attractive as the number of available allowances decreases, making each allowance more costly. In May 2012, CARB considered proposed amendments to the California GHG emissions cap-and-trade program to (1) add security to the market system and help staff implement the cap-and-trade program, and (2) link the California capand-trade program with that of the Canadian province Quebec. The first set of amendments proposed additional information-gathering requirements during registration for the cap-and-trade program, rules and intermediate deadlines for participation in the first auction in November 2012, and provisions for implementing the allowance and offset registry and market monitoring. These amendments were approved in June 2012 and became effective in September 2012. The second set of amendments allows acceptance of Quebec compliance instruments for compliance with California s cap-and-trade regulation, and establishes requirements for linked compliance instrument registries and auctions. In June 2012, the California legislature passed SB 1018, which prohibits CARB from adopting any linkage programs until the Governor has reviewed the program and made four specific findings with the advice of the Attorney General. In January 2013, CARB issued revised amendments and supplementary documentation for public review. On April 8, 2013, Governor Brown issued a letter to CARB making the required findings under SB 1018 (Brown, 2013). On May 10, 2013, CARB adopted final regulatory amendments to provide for linkage of the Quebec and California cap-and-trade programs (CARB, 2013a). A4.8-REG-16

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR 1.3.1.1.20.1 Co-Pollutant Benefits Implementation of the cap-and-trade program will also reduce state-wide emissions of criteria and toxic air pollutants. Because GHG emissions are largely the result of fuel combustion, as the cap decreases and state-wide combustion decreases, criteria and toxic air pollutants associated with combustion will also decrease state-wide. CARB also evaluated the potential for localized impacts from short-term increases in construction and operational emissions at facilities modifying operations in response to cap-and-trade compliance obligations. CARB s analysis indicated that localized impacts are unlikely due to existing local and state air quality regulations; however, where there is potential for significant impact from a proposed project, it would be addressed by local permitting agencies and CEQA lead agencies through the permitting and CEQA processes in which mitigation measures are evaluated. 1.3.1.1.20.2 Refinery Efficiency Metrics The refinery industry uses efficiency metrics to identify industry performance standards and evaluate the operational efficiency of refineries in terms of energy usage and associated greenhouse gas emissions. More recently, the CARB capand-trade regulation used efficiency metrics to determine the allowance allocation for a given refinery, where more efficient refineries are rewarded with more directly allocated allowances. Efficiency metrics are intended to allow an equitable comparison across refineries, normalizing for differences in crude feed, products, and associated processing energy intensity. Different definitions of efficiency metrics exist, including the Simple Barrel method, the Solomon Energy Intensity Index (EII) method, and the Complexity Weighted Barrel (CWB) method. The more sophisticated efficiency metrics allow comparison of refineries of differing complexity without automatically penalizing the more complex refineries that fundamentally require more energy input to create more processed and higher-value products (e.g., gasoline, distillates), as compared to less complex refineries (e.g., topping refineries) that fundamentally require less energy input to create less processed and lower-value products (e.g., naphtha, asphalt). More detailed descriptions of the Simple Barrel, Solomon EII, and CWB methods are as follows: Solomon EII Method. The Solomon EII is a proprietary method developed by Solomon Associates that compares a refinery s actual energy usage to the standard energy usage of a refinery of similar size and configuration. Here, energy efficiency is used as a proxy for GHG emissions efficiency. The standard energy usage value is calculated by Solomon Associates based on information reported by refineries that account for approximately 85% of global refining capacity and 90% of California s refining capacity (CARB, 2011a). Established in 1980, the Solomon EII method is considered the industry standard for comparing energy efficiency across refineries, and is A4.8-REG-17

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 used by industry and government entities alike, including the Western States Petroleum Association (WSPA), EPA Energy Star, and CARB. CARB adopted the Solomon EII method for calculating allowances in the cap-and-trade regulation first compliance period (2013-2014) for all refineries with an EII value. Refineries without an EII value are typically smaller and simpler; for these refineries, the cap-and-trade regulation uses the Simple Barrel method, as described below, to calculate allowances. CWB Method. The CWB method was initially developed during an Emissions Allocation Study for the Western States Petroleum Association. CARB has adopted a CWB method for calculating allowances for all refineries in the capand-trade regulation second compliance period (2015-2017) and onward. The CWB method is directly based on GHG intensity rather than an energy intensity proxy. The CWB method evaluates the GHG efficiency of each refinery process (e.g., vacuum distillation, fluid catalytic cracking, alkylation) and determines the refinery s overall efficiency from the sum of these processes. In this way, the CWB method accounts for differences in GHG emissions due to differences in refinery configurations, inputs, and outputs. The CWB method is more transparent than the Solomon EII method in that it is not based on a proprietary index; the California Mandatory Reporting Rule requires refineries to report all input and output information needed to perform the cap-and-trade CWB evaluation. Simple Barrel Method. The Simple Barrel method evaluates refinery efficiency based on total GHG emissions per barrel of product produced. Here, total barrels of product includes all products the refinery produces (e.g., gasoline, diesel, jet fuel, residual fuel oil, asphalt), regardless of the energy intensity needed to produce more sophisticated and higher-value products. CARB adopted the Simple Barrel method for calculating allowances in the cap-and-trade regulation first compliance period (2013-2014) for all refineries without a Solomon EII value. The refinery s total GHG emissions are obtained from reports required by the EPA and California Mandatory Reporting Rule, and the total barrels of product produced are obtained from information reported to the EPA and the California Energy Commission (CEC). While the Simple Barrel method is indeed simple and relatively transparent, CARB noted that the method may disadvantage more complex refineries that produce more complex and higher-value products when compared to simpler refineries that produce simpler and lower-value products (CARB, 2010b). A related efficiency metric is one that evaluates refinery efficiency based on total GHG emissions per barrel of crude oil refined. A recent study (Karras, 2011) by Communities for a Better Environment (CBE) commissioned by the Union of Concerned Scientists reported that California refineries on average emit 19 to 33% more GHGs per barrel of crude oil refined than refineries in any other major U.S. refining region. Proponents of this efficiency metric argue that California s A4.8-REG-18

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR greater GHG emissions can be attributed to California refineries processing denser crude of higher sulfur content, which require more energy input per barrel in order to refine into desirable products (Karras, 2010; Karras, 2011). The study notes that the declining availability of cleaner California and Alaska crude oils has resulted in California refineries importing lower quality foreign crude. Similar to the Simple Barrel method, this method disadvantages more complex refineries as compared to simpler refineries. 1.4.3 Regulation of Energy-Related Sources 1.3.1.1.21 Renewables Portfolio Standard (SB 1078, SB 107, and SB X1-2) Established in 2002 under SB 1078 (State of California, 2002b), and accelerated in 2006 under SB 107 (State of California, 2006b ) and again in 2011 under SB X1-2 (State of California, 2011), California s RPS requires retail sellers of electric services to increase procurement from eligible renewable energy resources to 33% of total retail sales by 2020. The 33-percent standard is consistent with the RPS goal established in the Scoping Plan (CARB, 2008). As interim measures, RPS requires 20% of retail sales to be sourced from renewable energy by 2013, and 25% by 2016. Initially, the RPS provisions applied to investor-owned utilities, community choice aggregators, and electric service providers. Senate Bill (SB) X1-2 added, for the first time, publicly owned utilities to the entities subject to RPS (State of California, 2011). The expected growth in RPS to meet the standards in effect in 2008 is not reflected in the "BAU" calculation in the AB 32 Scoping Plan, discussed above. In other words, the Scoping Plan's BAU 2020 does not take credit for implementation of RPS that occurred after its adoption (CARB, 2008). 1.3.1.1.22 GHG Emissions Standard for Baseload Generation (SB 1368) SB 1368 (September 29, 2006) prohibits any retail seller of electricity in California from entering into a long-term financial commitment for baseload generation if the GHG emissions are higher than those from a combined-cycle natural gas power plant (State of California, 2006b). This performance standard applies to electricity generated out-of-state as well as in the state, and to publicly owned as well as investor-owned electric utilities. 1.4.4 Regulation of Mobile Sources 1.3.1.1.23 Senate Bill 375 (Land Use Planning) SB 375 provides for a new planning process to coordinate land use planning, regional transportation plans, and funding priorities in order to help California meet the GHG reduction goals established in AB 32 (State of California, 2008). SB 375 will be implemented over the next several years. SB 375 requires Metropolitan Planning Organizations (MPOs) relevant to the project area (including the Association of Bay Area Governments [ABAG]) to incorporate a sustainable communities strategy (SCS) in their regional transportation plans A4.8-REG-19

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 (RTPs) that will achieve GHG emission reduction targets set by CARB, primarily by reducing vehicle miles traveled (VMT) from light-duty vehicles through development of more compact, complete, and efficient communities. SB 375 also required CARB to appoint a Regional Targets Advisory Committee (RTAC) to recommend factors for CARB to consider and methodologies for it to use in setting GHG emission reduction targets (Regional Targets) for each region. On September 29, 2009, the RTAC released its recommendations to CARB, who, on September 23, 2010, adopted Regional Targets applying to the years 2020 and 2035 (CARB, 2010c). In 2011, CARB adopted Regional Targets of 7% for 2020 and 15% for 2035 for the area under ABAG s jurisdiction, which includes the Chevron Refinery. On July 18, 2013, the Metropolitan Transportation Commission and ABAG approved the final Plan Bay Area, which includes the Bay Area region's first SCS as well as a new 2040 RTP and establishes the strategies for meeting the Bay Area's Regional Targets (MTC, 2013). The SCS is relevant to the Project only in that the Project is an employer. The SCS for the San Francisco Bay Area is discussed in the Regional Provisions section below. 1.3.1.1.24 Mobile Source Reductions (Pavley) (AB 1493) AB 1493 required CARB to adopt regulations by January 1, 2005, to reduce GHG emissions from non-commercial passenger vehicles and light-duty trucks of model years 2009 through 2016 (State of California, 2002a). The bill required the California Climate Action Registry (CCAR) to develop and adopt protocols for the reporting and certification of GHG emissions reductions from mobile sources for use by CARB in granting emission reduction credits. The bill authorizes CARB to grant emission reduction credits for reductions of GHG emissions prior to the date of the enforcement of regulations, using model year 2000 as the baseline for reduction. In 2004, CARB applied to the EPA for a waiver under the federal Clean Air Act to authorize implementation of these regulations. The waiver request was formally denied by the EPA in December 2007 after California filed suit to prompt federal action. In January 2008, the State Attorney General filed a new lawsuit against the EPA for denying California s request for a waiver to regulate and limit GHG emissions from these vehicles. In January 2009, President Obama issued a directive to the EPA to reconsider California s request for a waiver. On June 30, 2009, the EPA granted the waiver to California for its GHG emission standards for motor vehicles. As part of this waiver, the EPA specified the following provision: CARB may not hold a manufacturer liable or responsible for any noncompliance caused by emission debits generated by a manufacturer for the 2009 model year. CARB has adopted a new approach to passenger vehicles cars and light trucks by combining the control of smog-causing pollutants and GHG A4.8-REG-20

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR emissions into a single coordinated package of standards. The new approach also includes efforts to support and accelerate the numbers of plug-in hybrids and zero-emission vehicles in California. These standards will apply to all passenger and light-duty trucks used by employees of and deliveries to the Project. 1.3.1.1.25 Low Carbon Fuel Standard Executive Order S-01-07 (January 18, 2007) requires a 10% or greater reduction in the average fuel carbon intensity for transportation fuels in California regulated by CARB. CARB identified the Low Carbon Fuel Standard (LCFS) as a Discrete Early Action item under AB 32, and the final resolution (09-31) was issued on April 23, 2009. In 2009, CARB approved for adoption the LCFS regulation, which became fully effective in April 2010 and is codified in Title 17, California Code of Regulations, Sections 95480-95490. The LCFS will reduce GHG emissions by reducing the carbon intensity of transportation fuels used in California by at least 10% by 2020. Carbon intensity (CI) is a measure of the GHG emissions associated with the various production, distribution, and use steps in the lifecycle of a transportation fuel. The LCFS applies to fuel producers, importers, and distributers, including refineries like the Chevron Facility. To comply with the LCFS, refineries could consider measures to reduce GHG impacts along the full lifecycle of the transportation fuel, for example choosing to purchase crude oils and feeds of lower carbon content, improving the energy efficiency of refinery processes and equipment, and/or producing fuels of lower carbon content, such as ethanol-blended gasoline products. A recent study reported that in response to increased worldwide demand and oil prices, the number of types of crude oils being traded worldwide is growing, with the current 160 crude oil types varying widely in terms of geographic source, carbon content, and energy intensity associated with extraction and processing (Gordeon, 2012). On December 29, 2011, the U.S. District Court for the Eastern District of California issued several rulings in the federal lawsuits challenging the LCFS. Opponents argued that the LCFS violates the Supremacy Clause (US Constitution, Article VI, Clause 2) 5 and Commerce Clause (US Constitution, Article 1, Section 8, Clause 3) 6 of the U.S. Constitution by discriminating against fuel produced out- 5 The Supremacy Clause establishes the U.S. Constitution, federal statues, and the U.S. Treaties as the supreme law of the land, establishing that federal laws take precedence over state laws. 6 The Commerce Clause grants the federal government the authority To regulate Commerce within foreign Nations, and among the several States and with the Indian Tribes. Case law has determined that pollution and hazardous materials can be considered commerce because they can be produced in one state but dispersed or transported to other states. A4.8-REG-21

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 of-state. One of the district court s rulings preliminarily enjoined CARB from enforcing the regulation. In January 2012, CARB appealed that decision to the Ninth Circuit Court of Appeals (Ninth Circuit), and then moved to stay the injunction pending resolution of the appeal. On April 23, 2012, the Ninth Circuit granted CARB s motion for a stay of the injunction while it continued to consider CARB s appeal of the lower court s decision. On September 18, 2013, the Ninth Circuit issued its decision affirming the district court's conclusion that LCFS ethanol and initial crude-oil provisions are not facially discriminatory, but remanded to the district court to determine whether the LCFS ethanol provisions are discriminatory in purpose and effect. Additionally, the Ninth Circuit remanded to the district court with instructions to vacate the preliminary injunction against CARB's enforcement of the regulation (Rocky Mountain Farmers Union v. CARB, 2013). CARB staff is developing proposed amendments for consideration by the CARB Board. 7 Amendments under consideration specifically concerning refineries include allowing individual refiners a one-time opportunity to opt out of using the California average to calculate LCFS credits or deficits and instead use a refinery-specific or hybrid approach, and accounting for lifecycle carbon intensity associated with low-energy refineries. Additional amendments under consideration include updating the Indirect Land Use Change (iluc) values, allowing electricity credits for electric rail and electric forklifts, adding a provision to address cost containment, incorporating additional fuel pathways for alternative fuels including biodiesel, and developing sustainability provisions for awarding carbon intensity credits (e.g., for biofuel facilities) (CARB, 2013g). 1.3.1.1.26 Clean Cars In January 2012, CARB approved the Advanced Clean Cars Program, which established an emissions control program for cars and light-duty trucks (such as SUVs, pickup trucks, and minivans) of model years 2017-2025. When the program is fully implemented, new vehicles will emit 75% less smog-forming pollutants than the average new car sold today, and GHG emissions will be reduced by nearly 35%. The program also requires car manufacturers to offer for sale an increasing number of zero-emission vehicles (ZEVs) each year, including battery electric, fuel cell, and plug-in hybrid electric vehicles. In December 2012, CARB adopted regulations allowing car manufacturers to comply with California s GHG emissions requirements for model years 2017-7 According to the CARB LCFS website (http://www.arb.ca.gov/fuels/lcfs/regamend13/regamend13.htm), these amendments were scheduled for consideration at the October 2013 Board hearing. As of the date of the publication of this DEIR, CARB has not taken action to finalize or implement these amendments. A4.8-REG-22

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR 2025 through compliance with the EPA GHG requirements for those same model years (CARB, 2012). 1.3.1.1.27 SmartWay Truck Efficiency Regulation The SmartWay Truck Efficiency Regulation, approved by CARB in December 2008, requires heavy-duty long-haul tractors and box-type trailers to be equipped with technologies that reduce GHG emissions by improving fuel economy. These technologies include fuel-efficient and rolling-resistant tires and devices to improve truck aerodynamics. To comply with the regulation, fleet operators must either use EPA SmartWay-certified tractors and trailers or retrofit their existing fleet with SmartWay-verified technologies. All tractors and trailers must comply with the regulation when operated on California highways, regardless of where the vehicle is registered (CCR Title 17, Sections 95300 to 95312). 1.3.1.1.28 Regulation of Ships 1.3.1.1.28.1 CARB Measures to Reduce Emissions from Goods Movement Activities The Goods Movement Emission Reduction Program (CARB, 2013e) and the 2006 Emission Reduction Plan for Ports and Goods Movement (Plan) in California (CARB, 2006) establish measures that reduce emissions (NOx, PM, and GHGs) from the main sources associated with port cargo handling activities, including ships, harbor craft, terminal equipment, trucks, and locomotives. These measures reduce emissions, including GHG emissions, by requiring cleaner technologies and upgrades, low-carbon fuels, and/or programs that reduce fuel consumption through reduction of vehicle use or vehicle miles traveled. The Goods Movement Emission Reduction Program is a partnership among CARB, local air districts, and local seaports to reduce emissions and health risks from freight movement. This program does not apply to oil loading and unloading that occurs via pipeline. In addition, the California Environmental Protection Agency (Cal/EPA) (CARB s parent agency) has partnered with the California Business, Transportation and Housing Agency to prepare the Goods Movement Action Plan (GMAP) (CA DOT, 2007). The GMAP guides state-wide policy and planning for freight transport, trade corridors, and related air quality issues, as well as guides project selection for the allocation of funds under the Trade Corridors Improvement Fund (TCIF) Program, a state-wide fund used for infrastructure improvements along federally designated trade corridors of national significance (State of California, 2007). The GMAP was issued in two phases in 2005 and 2007. The Phase I report described the goods movement industry and its growth potential, the four priority regions and corridors (Los Angeles/Inland Empire, San Diego/Border, Central Valley, and Bay Area), the environmental and community impacts and preliminary mitigation approaches, and public safety and security issues. The A4.8-REG-23

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 Phase II report presents guidelines for integrating state-wide efforts to improve the goods movement system while mitigating environmental impacts (BTH and Cal/EPA, 2007). 1.3.1.1.28.2 CARB Vessel Speed Reduction for Ocean-Going Vessels CARB is in the process of evaluating a state-wide vessel speed reduction program for ocean-going vessels. This program would require vessels within a certain distance of a port to slow to a specified speed. Reducing vessel speeds to an optimal value that minimizes fuel consumption on a per-distance basis translates into reduced GHG emissions (CARB, 2009b). Voluntary vessel speed reduction programs are already in place at several ports including the Port of Long Beach, the Port of Los Angeles, and the Port of San Diego. 1.3.1.1.29 Regulation of Trains In response to the goals of AB 32, Measure T-6 Freight Transport Efficiency of CARB s Scoping Plan is intended to address GHG emissions from the freight transport sector by achieving at least a 3.5 MMT CO2e reduction in GHG emissions from the sector by 2020. In May 2009, CARB held a workshop (CARB, 2009a) to outline objectives and research topics for further investigation; as of October 2013, however, CARB has not yet implemented any regulations or issued any formal regulatory documents for this measure. 1.4.5 CEQA Guidelines Amendments (SB 97) The 2009 CEQA Guidelines amendments adopted pursuant to SB 97 state in Section 15064.4(a) that lead agencies should make a good faith effort, to the extent possible on scientific and factual data, to describe, calculate or estimate GHG emissions. The CEQA Guidelines amendments note that an agency may identify emissions either by selecting a model or methodology to quantify the emissions or by relying on qualitative analysis or other performance based standards. (CNRA, 2009c) Section 15064.4(b) provides that the lead agency should consider the following when assessing the significance of impacts from GHG emissions on the environment: The extent a project may increase or reduce GHG emissions as compared to the environmental setting. Whether the project emissions exceed a threshold of significance that the lead agency determines applies to the project. The extent to which the project complies with regulations or requirements adopted to implement a state-wide, regional, or local plan for the reduction or mitigation of GHG emissions (CNRA, 2009c). A4.8-REG-24

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR In addition, Section 15064.7(c) of the CEQA Guidelines amendments specifies [w]hen adopting thresholds of significance, a lead agency may consider thresholds of significance previously adopted or recommended by other public agencies, or recommended by experts, provided the decision of the lead agency to adopt such thresholds is supported by substantial evidence (CNRA, 2009c). Similarly, the revision to Appendix G, Environmental Checklist Form, which is often used as a basis for lead agencies' selection of significance thresholds, does not prescribe specific thresholds. Rather, Appendix G asks whether the project would: 1. Generate GHG emissions, either directly or indirectly, that may have a significant impact on the environment? or 2. Conflict with an applicable plan, policy or regulation adopted for the purpose of reducing the emissions of GHGs? This indicates that the determination of what is a significant effect on the environment should be left to the lead agency. Accordingly, the CEQA Guidelines amendments do not prescribe specific methodologies for performing an assessment, do not establish specific thresholds of significance, and do not mandate specific mitigation measures. Rather, the CEQA Amendments emphasize the lead agency s discretion to determine the appropriate methodologies and thresholds of significance consistent with the manner in which other impact areas are handled in CEQA (CNRA, 2009c). The CEQA Guidelines amendments indicate that lead agencies should consider all feasible means, supported by substantial evidence and subject to monitoring and reporting, of mitigating the significant effects of GHG emissions. As pertinent to the Project, these potential mitigation measures, set forth in Section 15126.4(c), may include (1) measures in an existing plan or mitigation program for the reduction of GHG emissions that are required as part of the lead agency s decision; (2) reductions in GHG emissions resulting from a project through implementation of project design features; (3) off-site measures, including offsets, to mitigate a project s emissions; and (4) carbon sequestration measures (CNRA, 2009c). Among other things, the CNRA noted in its Public Notice for these changes that impacts of GHG emissions should focus on the cumulative impact on climate change. The Public Notice states: While the Proposed Amendments do not foreclose the possibility that a single project may result in greenhouse gas emissions with a direct impact on the environment, the evidence before [CNRA] indicates that in most cases, the A4.8-REG-25

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 impact will be cumulative. Therefore, the Proposed Amendments emphasize that the analysis of greenhouse gas emissions should center on whether a project s incremental contribution of greenhouse gas emissions is cumulatively considerable (CNRA, 2009b). Thus the CEQA Guidelines amendments continue to make clear that the significance of GHG emissions is most appropriately considered on a cumulative level. As described in the Final Statement of Reasoning (CNRA, 2009a) for the 2009 CEQA Guidelines amendments, the CEQA Guidelines specifically do not address lifecycle emission for two reasons. First, there are different interpretations of the meaning of lifecycle amongst lead agencies, which could lead to confusion on how to evaluate the contribution of lifecycle emissions to a project. Furthermore, requiring an analysis of lifecycle emissions may be inconsistent with CEQA, as the emissions may be outside the scope of the indirect emissions that are evaluated with a project. Lead agencies must evaluate substantial evidence to determine which emissions are indirect effects of a project and which emissions are outside the scope of CEQA. 1.4.6 Other State GHG Regulatory Activities 1.3.1.1.30 CARB Executive Order S-13-08 On November 14, 2008, Governor Arnold Schwarzenegger signed Executive Order S-13-08, which called on State agencies to develop a strategy for identification of and preparation for expected climate change impacts in California. The resulting 2009 California Climate Adaptation Strategy (CAS) report was developed by the CNRA in coordination with the CAT. The report presents the best available science relevant to climate impacts in California and proposes a set of recommendations for California decision-makers to assess vulnerability and promote resiliency in order to reduce California s vulnerability to climate change. Guidance regarding adaptation strategies is general in nature and emphasizes incorporation of strategies into existing planning policies and processes. An update to the CAS report is planned for release as a draft for public comment by the end of 2013 (State of California, 2013b). In addition to requiring the CAT to create a Climate Adaptation Strategy, Executive Order S-13-08 ordered the creation of a comprehensive Sea Level Rise Assessment Report. The report, published in June 2012, indicates that the sea level along most of California s coast is expected to rise about 1 meter over the next century and is likely to increase the risk of damage in the form of flooding, coastal erosion, and wetland loss due to storm surges and high waves. The sea level increase is slightly higher than projected for global sea levels (NRC, 2012; ONPI, 2012). A4.8-REG-26

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR Executive Order S-13-08 also called for the California Ocean Protection Council (OPC) to work with the other CAT State agencies to develop interim guidance for assessing the potential impacts of sea level rise due to climate change in California. In coordination with National Academy of Sciences (NAS) efforts, the OPC drafted interim guidance recommending that State agencies consider a range of sea level rise scenarios for the years 2050 and 2100 in order to assess project vulnerability, reduce expected risks, and increase resiliency to sea level rise. The draft resolution and interim guidance document is consistent with the Ocean Protection Act (Division 26.5, Public Resource Code Section 35615(a)(1)), which specifically directs the OPC to coordinate activities of State agencies to improve the effectiveness of State efforts to protect ocean resources (State of California, 2013c; CO-CAT, 2010). 1.3.1.1.31 Other Potentially Applicable Regulations or Policies 1.3.1.1.31.1 Assembly Bill 1613 (Waste Heat and Carbon Emissions Reduction Act) AB 1613 directed the CEC, the CPUC, and CARB to implement the Waste Heat and Carbon Emissions Reduction Act. The Act is designed to encourage the development of new combined heat and power (CHP) systems in California with a generating capacity of not more than 20 megawatts. In June 2010, the CEC published modified final guidelines establishing technical criteria for eligibility of CHP systems for programs to be developed by the CPUC and publicly owned utilities (CEC, 2010). Section 2843 of the Act provides that the CEC's guidelines require that CHP systems: Be designed to reduce waste energy; Have a minimum efficiency of 60%; Have NO x emissions of no more than 0.07 pounds per megawatt-hour; Be sized to meet the eligible customer generation thermal load; Operate continuously in a manner that meets the expected thermal load and optimizes the efficient use of waste heat; and Be cost-effective, technologically feasible, and environmentally beneficial. As directed by AB 1613, the CPUC also established (1) a standard tariff for the sale of electricity to electricity corporations for delivery to the electrical grid (State of California, 2013a); and (2) a "pay as you save" pilot program requiring electricity corporations to finance the installation of qualifying CHP systems by non-profit and government entities. A January 2011 decision by an administrative law judge determined that the pilot program will not be established due to lack of customer interest and difficulties in instituting a program that meets A4.8-REG-27

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 California Department of Corporations requirements (Decision 11-01-010 Before the Public Utilities Commission of the State of California, 2011). 1.3.1.1.31.2 Senate Bill X7 7 (Water Conservation Act of 2009) The Water Conservation Act of 2009 sets an overall goal of reducing per-capita urban water use by 20% by December 31, 2020. The state is required to make incremental progress toward this goal by reducing per-capita water use by at least 10% by December 31, 2015. Reduction in water consumption directly reduces the energy necessary and the associated emissions to convene, treat, and distribute the water; it also reduces emissions from wastewater treatment. The Department of Water Resources adopted a regulation on February 16, 2011 that sets forth criteria and methods for exclusion of industrial process water from the calculation of gross water use for purposes of urban water management planning. The regulation would apply to all urban retail water suppliers required to submit an Urban Water Management Plan, as set forth in the Water Code, Division 6, Part 2.6, Sections 10617 and 10620. 1.5 REGIONAL PROVISIONS 1.5.1 BAAQMD Regional Climate Protection Strategy Resolution On November 6, 2013, the BAAQMD Board passed a resolution adopting a regional target of achieving 80% below 1990 levels of GHG emissions by 2050. This reduction goal matches that of Executive Order S-3-05, described earlier. In addition, the resolution commits the BAAQMD to develop a regional climate protection strategy, including a Bay Area climate protection work program that will be included as an element of the BAAQMD s 2014 Clean Air Plan (BAAQMD, 2013). 1.5.2 ABAG/MTC Sustainable Communities Strategy (SB 375) As discussed above, SB 375 is intended to help achieve AB 32's goals by coordinating land use and transportation planning, along with funding priorities. SB 375 requires each Metropolitan Planning Organization (MPO) in California to develop an Sustainable Communities Strategy (SCS) as part of its Regional Transportation Plan (RTP) that will achieve the GHG reduction targets required by AB 32. As described above, the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG) developed an SCS for the San Francisco Bay Area and incorporated it and a new RTP into a Plan Bay Area. Plan Bay Area includes the Chevron Facility as a job center. Plan Bay Area developed under SB 375 included the Facility as an industrial source in its employment analysis. The Project will preserve this industrial source employment status, and is thus consistent with Plan Bay Area. A4.8-REG-28

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR 1.5.3 San Francisco Bay Plan The San Francisco Bay Conservation and Development Commission (BCDC) was first established as a temporary state agency by the McAteer-Petris Act. BCDC was charged with preparing a plan for the long-term use of the bay and regulating development in and around the bay while the plan was being prepared. The San Francisco Bay Plan, which was completed in January 1969, includes policies on issues critical to the wise use of the bay ranging from ports and public access to design and transportation. The Bay Plan also contains maps of the entire bay that designate shoreline areas that should be reserved for water-related purposes like ports, industry, public recreation, airports, and wildlife refuges. In August 1969, the McAteer-Petris Act was amended to make BCDC a permanent agency and to incorporate the policies of the Bay Plan into State law. In 1977, BCDC s authority was expanded to provide special protection of the Suisun Marsh. BCDC is also the federally designated State coastal management agency for the San Francisco Bay segment of the California coastal zone. This designation empowers BCDC to use the authority of the federal Coastal Zone Management Act to ensure that federal projects and activities are consistent with the policies of the Bay Plan and State law. On October 6, 2011, BCDC approved amendments to the Bay Plan (BCDC, 2011a; BCDC, 2011b). The amendments address climate change by updating several sections of the Bay Plan (including Safety of Fills, Tidal Marshes and Tidal Flats, Shoreline Protection, and Public Access) and by adding a new climate change section with new findings and policies. There are five policy goals for the approved amendments: 1. Update language on sea level rise. This current policy language recommends that new development not be approved in low-lying areas that are in danger of flooding now or in the future unless the development is elevated above possible flood levels. The amended policies allow protection from flooding, encourage innovative means of dealing with flood danger, and make it clear that local governments will determine how best to deal with development proposals inland of BCDC s jurisdiction. 2. Encourage a variety of types of projects that have regional benefits. Proposed new development will continue to be evaluated by BCDC on a case-by-case basis to determine if the benefits of a project outweigh the risk from flooding and to ensure steps are taken to deal with the flooding danger. 3. Continue to protect the bay and other valuable natural resources within BCDC s jurisdiction. A4.8-REG-29

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 4. Continue to protect existing tidal wetlands and, where appropriate, expand them. To accomplish this, resource protection and habitat enhancement in undeveloped low-lying areas will be encouraged, but development will not be absolutely prohibited in these areas. 5. Work with its regional partners, local governments, businesses, labor, environmentalists, investors, insurers, and the general public to develop a comprehensive regional strategy that deals with all the impacts of climate change. 1.6 REFERENCES Association of Irritated Residents, et al., v. California Air Resources Board, et al, 2012. 206 Cal. App. 4th 1487. Bay Area Air Quality Management District (BAAQMD). 2013. Air District Board passes climate protection resolution. November 6. Accessed November 12, 2013. http://www.baaqmd.gov/~/media/files/communications%20and%20outrea ch/publications/news%20releases/2013/climateres_131106.ashx?la=en. Brown, E.G. 2013. Letter from Governor Brown to Mary Nichols, CARB, April 8, 2013 Re: Request for Findings Under SB 1018. Accessed October 14, 2013. http://gov.ca.gov/docs/request_for_sb_1018_findings.pdf. Business, Transportation and Housing Agency (BTH) and California Environmental Protection Agency (Cal/EPA). 2007. Goods Movement Action Plan. January. Accessed on November 12, 2013. http://www.arb.ca.gov/gmp/docs/gmap- 1-11-07.pdf. California Air Resources Board (CARB). 2006. Emission Reduction Plan for Ports and Goods Movement in California. Resolution 06-14, April. Accessed March 1, 2013. http://www.arb.ca.gov/planning/gmerp/march21plan/docs/resolution_06-14.pdf. California Air Resources Board (CARB). 2007a. California Greenhouse Gas Inventory (millions of metric tonnes of CO2 equivalent) by IPCC Category. Sacramento, CA, November. Accessed March 1, 2013. http://www.arb.ca.gov/cc/inventory/archive/tables/ ghg_inventory_ipcc_90-04_all_2007-11-19.pdf. California Air Resources Board (CARB). 2007b. Summary of Board Meeting: Consideration of Recommendations for Discrete Early Actions for Climate Change Mitigation in California. Sacramento, CA, June 21. A4.8-REG-30

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR California Air Resources Board (CARB). 2007c. Summary of Board Meeting: Public Meeting to Consider Approval of Additions to Reduce Greenhouse Gas Emissions under the California Global Warming Solutions Act of 2006 and to Discuss Concepts for Promoting and Recognizing Voluntary Early Actions. Sacramento, CA, October 25. California Air Resources Board (CARB). 2008. Climate Change Scoping Plan. Sacramento, CA, December. Accessed March 1, 2013. http://www.arb.ca. gov/cc/scopingplan/document/adopted_scoping_plan.pdf. California Air Resources Board (CARB). 2009a. Freight Transport Efficiency. Accessed March 1, 2013. http://www.arb.ca.gov/cc/freight/freight.htm. California Air Resources Board (CARB). 2009b. Vessel Speed Reduction for Oceangoing Vessels. Accessed October 14, 2013. http://www.arb.ca.gov/ports/ marinevess/vsr/vsr.htm. California Air Resources Board (CARB). 2010a. California Cap-and-Trade Program. Final Resolution. Sacramento, CA. Accessed March 1, 2013. http://www.arb.ca.gov/ regact/2010/capandtrade10/res1042.pdf. California Air Resources Board (CARB). 2010b. Cap and Trade Regulation, Initial Statement of Reasons, Appendix J: Allowance Allocation, page J-42, October. Accessed March 1, 2013. http://www.arb.ca.gov/regact/2010/ capandtrade10/capv4appj.pdf. California Air Resources Board (CARB). 2010c. Notice of Decision: Regional Greenhouse Gas Emissions Reduction Targets for Automobiles and Light Trucks Pursuant to Senate Bill 375. Sacramento, CA. Accessed March 1, 2013. http://www.arb.ca.gov/cc/sb375/notice%20of%20decision.pdf. California Air Resources Board (CARB). 2010d. Proposed Regulation to Implement the California Cap-and-Trade Program. Sacramento, CA. Accessed March 1, 2013. http://www.arb.ca.gov/regact/2010/capandtrade10/ capandtrade10.htm. California Air Resources Board (CARB). 2011a. Appendix A to 2 nd 15-day Cap-and- Trade Regulatory Text: Refinery Allocation Method, September. Accessed March 1, 2013. http://www.arb.ca.gov/regact/2010/capandtrade10/ 2nd15dayappa.pdf. California Air Resources Board (CARB). 2011b. Final Supplement to the AB 32 Scoping Plan Functional Equivalent Document. Accessed September 16, A4.8-REG-31

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 2013. http://www.arb.ca.gov/cc/scopingplan/document/final_supplement_ to_sp_fed.pdf. California Air Resources Board (CARB). 2011c. Status of Scoping Plan Recommended Measures. July. Accessed March 1, 2013. http://www.arb.ca. gov/cc/scopingplan/status_of_scoping_plan_measures.pdf. California Air Resources Board (CARB). 2011d. Supplement to the AB 32 Scoping Plan Functional Equivalent Document, approved by Resolution 11-27, August 24. Accessed September 28, 2013. http://www.arb.ca.gov/cc/ scoping plan/fed.htm. California Air Resources Board (CARB). 2012. Lev III and ZEV Regulation Amendments For Federal Compliance Option, December 31. Accessed October 14, 2013. http://www.arb.ca.gov/regact/2012/leviiidtc12/ leviiidtc12.htm. California Air Resources Board (CARB). 2013a. Cap and Trade Linkage. Accessed October 14, 2013. http://www.arb.ca.gov/cc/capandtrade/linkage/ linkage.htm. California Air Resources Board (CARB). 2013b. Climate Change Scoping Plan First Update, Discussion Draft for Public Review and Comment, October. Accessed October 2, 2013. http://www.arb.ca.gov/cc/scopingplan/ 2013_update/discussion_draft.pdf. California Air Resources Board (CARB). 2013c. Energy Efficiency and Co-Benefits Assessment of Large Industrial Sources: Refinery Sector Public Report, June 6. Accessed October 14, 2013. http://www.arb.ca.gov/cc/energyaudits/ eeareports/refinery.pdf. California Air Resources Board (CARB). 2013d. Forty-Five Industrial Facilities Subject to Energy and Co-Benefits Assessment of Large Industrial Facilities Regulation, February. Accessed March 1, 2013. http://www.arb.ca.gov/cc/ energyaudits/eeafacilitylist.pdf. California Air Resources Board (CARB). 2013e. Goods Movement Emission Reduction Program. Accessed March 1, 2013. http://www.arb.ca.gov/ bonds/gmbond/gmbond.htm. California Air Resources Board (CARB). 2013f. Letter to facilities subject to the Energy Efficiency and Co-Benefits Assessment Regulation, February. Accessed March 1, 2013. http://www.arb.ca.gov/cc/energyaudits/ letter.pdf. A4.8-REG-32

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR California Air Resources Board (CARB). 2013g. Low Carbon Fuel Standard Proposed Amendments, March. Accessed March 8, 2013. http://www.arb.ca.gov/fuels/lcfs/regamend13/030513presentation.pdf. California Air Resources Board, et al., v. Association of Irritated Residents, et al., 2011. Accessed August 22, 2013. http://www.crpe-ej.org/crpe/images/ stories/7.25.11_petition_for_review_final_with_exhibits_smaller_ version.pdf. California Code of Regulations (CCR), Title 17, Sections 95300 to 95312. California Code of Regulations (CCR), Title 17, Subchapter 10, Article 4, Subarticle 9. California Code of Regulations (CCR), Title 17, Subchapter 10, Article 2. California Code of Regulations (CCR), Title 17, Subchapter 10, Article 5, California Cap on Greenhouse Gas Emissions and Market-Based Compliance Mechanisms. Accessed March 1, 2013. http://www.arb.ca.gov/cc/capandtrade/finalregorder.pdf. California Department of Transportation (CA DOT). 2007. Goods Movement Action Plan. Accessed November 12, 2013. http://www.dot.ca.gov/hq/tpp/offices/ogm/gmap.html. California Energy Commission (CEC). 2010. Guidelines for Certification of Combined Heat and Power Systems Pursuant to the Waste Heat and Carbon Emissions Reduction Act, Public Utilties Code, Section 2840 et seq.: Commission Modified Final Guidelines, May. Accessed March 1, 2013. http://www.energy.ca.gov/2009publications/cec-200-2009-016/cec-200-2009-016-cmf-rev2.pdf. California Natural Resources Agency (CNRA). 2009a. Final Statement of Reasons for Regulatory Action: Amendments to the State CEQA Guidelines Addressing Analysis and Mitigation of Greenhouse Gas Emissions Pursuant to SB97. Accessed March 8, 2013. http://ceres.ca.gov/ceqa/docs/ Final_Statement_of_Reasons.pdf. California Natural Resources Agency (CNRA). 2009b. Notice of Public Hearings and Notice of Proposed Amendment of Regulations Implementing the California Environmental Quality Act. Accessed March 1, 2013. http://www.ceres.ca.gov/ceqa/docs/notice_of_proposed_action.pdf. A4.8-REG-33

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 California Natural Resources Agency (CNRA). 2009c. Revised Text of Proposed Guideline Amendments. Sacramento, CA. Accessed March 1, 2013. http://ceres.ca.gov/ceqa/docs/text_of_proposed_changes.pdf. Decision 11-01-010 Before the Public Utilities Commission of the State of California. 2011. Order Instituting Rulemaking on the Commission s Own Motion into combined heat and power pursuant to Assembly Bill (AB) 1613. Accessed March 1, 2013. http://docs.cpuc.ca.gov/word_pdf/ FINAL_DECISION/129669.pdf. Gordeon, D. 2012. Carnegie Endowment for International Peace. The Carbon Contained in Global Oils, December. Accessed March 15, 2013. http://www.carnegieendowment.org/2012/12/18/carbon-contained-inglobal-oils/euzi. Karras, G. 2010. Communities for a Better Environment. Combustion Emissions from Refining Lower Quality Oil: What is the Global Warming Potential. Environmental Science and Technology, Vol. 44, No. 24, p. 9584-9589, November. Accessed March 1, 2013. http://pubs.acs.org/doi/pdfplus/ 10.1021/es1019965. Karras, G. 2011. Communities for a Better Environment. Oil Refinery CO 2 Performance Measurement, Prepared for the Union of Concerned Scientists, September. Accessed March 1, 2013. http://www.ucsusa.org/assets/ documents/global_warming/oil-refinery-co2-performance.pdf. Massachusetts et al. vs. Environmental Protection Agency. 2007. 549 U.S. 497. Metropolitan Transportation Commission (MTC). 2013. Plan Bay Area. Accessed October 14, 2013. http://www.mtc.ca.gov/planning/plant_bay_area/. National Oceanic and Atmospheric Administration (NOAA). 2002. President Announces Clear Skies and Global Climate Change Initiative, February. Accessed March 1, 2013. http://georgewbushwhitehouse.archives.gov/news/releases/2002/02/20020214-5.html. National Research Council (NRC). 2012. National Research Council of the National Academies: Committee on Sea Level Rise in California, Oregon, and Washington; Board on Earth Sciences and Resources and Ocean Studies Board; Division of Earth and Life Studies. Sea-Level Rise for the Coasts of California, Oregon, and Washington: Past, Present, and Future, June. Accessed March 1, 2013. http://www.nap.edu/openbook.php?record_id= 13389&page=R1. A4.8-REG-34

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR Office of News and Public Information (ONPI). 2012. Office of News and Public Information of the National Academies. California Sea Level Projected to Rise a Higher Rate than Global Average; Slower Rate for Oregon, Washington, But Major Earthquake Could Cause Sudden Rise, June 22. Accessed March 1, 2013. http://www8.nationalacademies.org/ onpinews/newsitem.aspx?recordid=13389. Rocky Mountain Farmers Union v. CARB. 2013. U.S. Court of Appeals for the Ninth Circuit, No. 12-15131. Accessed October 2, 2013. http://cdn.ca9.uscourts.gov/datastore/opinions/2013/09/18/12-15131.pdf. San Francisco Bay Conservation and Development Commission (BCDC). 2011a. Commission Meeting Summary, October 6. Accessed March 1, 2013. http://www.bcdc.ca.gov/meetings/commission/2011/10-06summary.shtml. San Francisco Bay Conservation and Development Commission (BCDC). 2011b. Revised Staff Report and Staff Recommendation for Proposed Bay Plan Amendment 1-08 Concerning Climate Change, September 23. Accessed March 1, 2013. http://www.bcdc.ca.gov/proposed_bay_plan/10-01recom.pdf. Sea-Level Rise Task Force of the Coastal and Ocean Working Group of the California Climate Action Team (CO-CAT). 2010. State of California Sea- Level Rise Interim Guidance Document, October. Accessed March 1, 2013. http://www.opc.ca.gov/webmaster/ftp/project_pages/climate/slr_guidan ce_document.pdf. State of California. 2002a. Assembly Bill 1493 (2001-2002 Reg. Session) Stats. 2002, ch. 200. State of California. 2002b. Senate Bill 1078 (2001-2002 Reg. Session) Stats. 2002, ch 516. State of California. 2006a. Assembly Bill 32 (2005-2006 Reg. Session) Stats. 2005, ch. 488. State of California. 2006b. Senate Bill 1368 (2005-2006 Reg. Session) Stats. 2006, ch. 598. State of California. 2007. Strategic Growth Plan Bond Accountability: Trade Corridors Improvement Fund. Accessed November 12, 2013. http://www.bondaccountability.dot.ca.gov/bondacc/mainmenuaction.do?% 3E&page=1000017. A4.8-REG-35

CHEVRON REFINERY MODERNIZATION PROJECT EIR MARCH 2014 State of California. 2008. Senate Bill 375 (2007-2008 Reg. Session) Stats. 2008, ch. 728. State of California. 2011. Ass n of Irritated Residents v. California Air Resources Board (Super. Ct. San Francisco County, March 18, 2011, No. CPF-09-509562). State of California. 2013a. CHP Feed-in Tariff. August. Accessed November 26, 2013. http://www.cpuc.ca.gov/puc/energy/chp/feed-in+tariff.htm. State of California. 2013b. Climate Change Portal: California Climate Adaptation Strategy. Accessed October 14, 2013. http://www.climatechange.ca.gov/adaptation/strategy/index.html. State of California. 2013c. The Coastal and Ocean Resources Working Group for the Climate Action Team (CO-CAT). Accessed March 1, 2013. http://www.opc.ca.gov/2010/07/coastal-and-ocean-climate-action-team-cocat/. Sutley, N.H. Council on Environmental Quality. 2010. Memorandum for Heads of Federal Departments and Agencies: Draft NEPA Guidance on Consideration of the Effects of Climate Change and Greenhouse Gas Emissions, February. Accessed March 1, 2013. http://www.whitehouse.gov/sites/default/ files/microsites/ceq/20100218-nepa-consideration-effects-ghg-draftguidance.pdf. The Recovery Act. 2009. Accessed March 1, 2013. http://www.recovery.gov/ About/Pages/The_Act.aspx. United Nations Framework Convention on Climate Change (UNFCCC). 1998. Kyoto Protocol to the United Nations Framework Convention on Climate Change. Accessed March 1, 2013. http://unfccc.int/kyoto_protocol/ items/2830.php. United States Environmental Protection Agency (EPA) and Department of Transportation (DOT). 2010. Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards. Final Rule. 75 Fed. Reg. 25324-25728. United States Environmental Protection Agency (EPA). 2009. Recovery: EPA Gets Involved. Accessed November 25, 2013. http://www.epa.gov/recovery. United States Environmental Protection Agency (EPA). 2013a. EPA FACT SHEET: Reducing Carbon Pollution from Power Plants. Accessed October 13, 2013. A4.8-REG-36

MARCH 2014 CHEVRON REFINERY MODERNIZATION PROJECT EIR http://www2.epa.gov/sites/production/files/2013-09/documents/ 20130920technicalfactsheet.pdf United States Environmental Protection Agency (EPA). 2013b. Proposed Carbon Pollution Standard for New Power Plants. Accessed October 13, 2013. http://www2.epa.gov/carbon-pollution-standards. United States Environmental Protection Agency (EPA). 2013c. State and Local Climate and Energy Program. November. Accessed October 13, 2013. http://www.epa.gov/statelocalclimate/index.html. United States Environmental Protection Agency (EPA). 2013d. Voluntary Energy and Climate Programs. Accessed October 13, 2013. http://www.epa.gov/ climatechange/epaactivities/voluntaryprograms.html. A4.8-REG-37

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