TITLE
Recommendation to adopt resolution, as a responsible agency, under the California Environmental Quality Act (CEQA), making Findings of Fact that the Final Environmental Impact Report (FEIR) certified by the City of Carson in November 2020 (State Clearinghouse No. 2020059038), has adequately analyzed all relevant CEQA topics relating to the Carson to Paramount Pipeline Conversion Project within the City of Long Beach; adopt a Statement of Overriding Considerations pursuant to Public Resources Code Section 21081; and adopt a portion of the Mitigation, Monitoring, and Reporting Program;
Determine that the conversion of subsurface and, where applicable, above ground pipeline “Line 4 and Line 12,” within the City of Long Beach municipal boundaries, from crude oil to hydrogen gas, the permitting of their continued operation and maintenance, the removal of manual valves replaced with welded pipe, and the installation of one new manual valve near the intersection of South Street and Orizaba Avenue by World Energy, LLC, dba Paramount Pipeline, LLC, within the City of Long Beach, is Categorically Exempt from the requirements of CEQA in accordance with State CEQA Guidelines Section 15301 (Existing Facilities);
Approve the assignment of existing pipeline permits P-141-83, P-210-00, P-140-83 and P-230-04 from the previous owner of the pipelines to new owner, World Energy, LLC, dba Paramount Pipeline, LLC; and
Authorize City Manager, or designee, to issue a permit to World Energy, LLC, dba Paramount Pipeline, LLC, for the conversion and operation of pipelines previously used for transporting crude oil products for the transportation of a hydrogen gas product, subject to Conditions of Approval relating to public health and safety. (Districts 8,9)
DISCUSSION
The City of Long Beach (City) regulates the placement and operation of pipelines that traverse within and through the City boundaries. Oftentimes, pipelines run through multiple cities and also through the Ports of Long Beach and Los Angeles, in which case each entity provides a separate but coordinated approval to the pipeline operator. Beginning with the first permit issuance in 1983, and the last one issued in 2004, the City has issued Delek US, operating as Paramount Petroleum, a series of pipeline permits (P-141-83, P-210-00, P-140-83 and P-230-04). Recently, Paramount Petroleum (Delek US) sold their assets of pipelines subject to the existing permits to World Energy, LLC (World Energy), the parent company of Paramount Pipeline, LLC (Paramount Pipeline). The requested approvals include a CEQA determination; the assignment of the existing permits to the new World Energy ownership; and, the conditional approval and issuance of a permit for the conversion of use and the operation of the pipelines from crude oil petroleum products to hydrogen gas.
World Energy is one of the largest sellers of biofuels for over 20 years. World Energy is undertaking efforts to convert a former oil refinery in the City of Paramount, which it purchased in 2018, to a state of the art, low-carbon fueling hub, including the ability to produce 350 million gallons of sustainable aviation fuel and renewable diesel. Hydrogen is a necessary component in the production of renewable fuels, and the requested pipeline conversion and operation permit is to facilitate the manufacture of biofuels at their Paramount plant. Once converted, these hydrogen transmission pipelines will alleviate the need for World Energy to hire multiple tanker trucks to daily deliver hydrogen gas, keeping them off the City’s rights-of-way. This decreases the risk of vehicular accidents occurring on City roadways and reduces the carbon footprint and congestion associated with diesel trucking.
To further their conversion goals, World Energy (Paramount Pipeline) has already applied to convert four of its regulated crude oil transmission pipelines and one newly constructed pipeline to service as a regulated hydrogen gas transmission pipeline system. This will enable the pipelines to transmit hydrogen gas instead of crude oil products. The conversion and operation of the pipeline is regulated by the federal Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). The California Public Utilities Commission (CPUC) is the agency that oversees the implementation of these regulations within California.
The transmission pipelines have diameter sizes ranging from 8 inches to 12 inches. The general locations of the pipelines are shown on the attached sketches (Attachment A - Long Beach Pipeline Route). The total combined lengths of the pipelines are 23,008 linear feet.
The conversion of pipelines to hydrogen gas is a newer technology. World Energy (Paramount Pipeline) has partnered with a leader in the operation and maintenance of hydrogen gas pipelines, Air Products and Chemicals, Inc., to specifically operate and maintain the subject pipeline, which traverses through Long Beach. To facilitate the change in service, numerous studies of the existing pipeline have been prepared and preparatory work has been completed to support the conversion of the line. On March 25, 2021, a Conversion to Service Plan was completed that includes an assessment of the condition of the pipes based on their maintenance history, and outlines the extensive testing and other measures that have been or will be taken to ensure safe operation of the pipelines, including ongoing monitoring and testing that will be conducted (Attachment B - Conversion to Service Plan, 2018-Present). The following list highlights the range of testing, improvements that have already been undertaken, and ongoing practices to ensure the safe conversion of the line (these actions are documented, and reports are prepared for the governing regulatory agencies):
(1) The pipelines were drained, chemically cleaned, and hydrotested to a pressure of 555 pound-force per square inch (PSI), which is more than three times the normal operating pressure, pursuant to the Conversion of Service documentation (January 2020 to March 2021).
(2) Vintage flanges on the pipeline system were removed and replaced with either fully-welded joints or new flanges. [Flanges are collars or rings attached to pipes to increase strength or connect with another pipe or object.] A remote terminal unit (RTU) gas monitor that will monitor and sound an alarm if any hydrogen is detected and an Automatic Shut Off Valve skid was installed at the Dominguez Pump station to shut the line down if an issue is detected (August 2020).
(3) A leak detection system will be installed on the pipeline. The system will alarm the operators if a leak situation exists on the pipeline, once the leak exceeds predetermined levels. On a leak alarm, the controller will act to close the appropriate valves and the leaking section will be discharged to flare at the Carson plant (August 2020 to October 2020).
(4) Pipelines will be patrolled bi-weekly to detect potential unauthorized excavation activity in the vicinity of the pipeline and for any changes along the pipeline route that require action to ensure pipeline safety.
(5) Completed the following assessments:
(a) Threat Risk Analysis for the Pipeline (June 2020);
(b) High consequence analysis (HCA) of the area the pipeline runs (June 2020); and,
(c) Automatic shutoff valve analysis (June 2020).
(6) Annual pipeline surveys for potential leaks.
Aside from the technical measures taken to ensure safety, the conversion and operations plans include public education and awareness actions including the installation of pipeline markers along the alignment that indicate the approximate location of underground pipelines along the pipeline rights-of-way and whenever a pipeline intersects a street, highway, or waterway. Each pipeline marker will display the pipeline operator’s name, product being transported, and the emergency contact number. The applicant will also be notifying more than 8,000 properties along the alignment of the nearby pipeline and will be providing pipeline safety brochures in both English and Spanish that advise on how to ensure pipeline safety and provide resources and information on what do in the event of a problem (Attachment C - Pipeline Safety in Your Community Brochure).
As part of, and subsequent to, the environmental review process, the applicant prepared risk assessment studies to ensure the converted hydrogen pipelines can be operated at appropriate low risk levels; those studies have determined that by operating at the proposed pressure of 160 PSI they can operate in a safe manner, with minimal risk, in adherence with established low-risk thresholds. This determination is based on the specific proposed operations requirements, pipe design, and equipment ratings of the subject pipelines and the proposed project. The Environmental Impact Report (EIR) prepared by the City of Carson, as the lead agency for the project, further limits the project to this operational constraint as a mitigation measure. Additionally, an emergency plan has also been prepared to outline the measures that will be taken in the event of an emergency.
Due to the specialized technical nature of the studies, Rincon Consultants and GHD were commissioned to conduct a technical review on the City’s behalf of the documentation provided by Paramount Pipeline. The review of the reports is especially prudent for the protection of public safety since it involves the change of use to existing infrastructure much of which is subsurface. Based on this technical review, it is recommended that Conditions of Approval be placed upon the permit. These conditions would be separate from compliance with any mitigation measures required as a part of the Final Environmental Impact Report (FEIR) (Attachment D - Final Environmental Impact Report). These conditions of approval will include, but not be limited to, the following:
• Provision to the City of copies of all reports and documentation submitted to federal and State regulatory agencies on an annual basis, including copies of audit findings filed with PHMSA;
• Specific notification to the City in the event of a pipeline emergency, including any that require pipeline shutoffs, such as an unplanned release of gas or third-party damage to the pipeline;
• Specific notification to the City if there is a change to operational conditions related to the operating pressure (any exceedance above 160 PSI), the type of fluid transported, or the route of the pipeline;
• Specific notification to both the Public Works and Fire Departments of the City in advance of street or lane closures associated with pipeline operation or maintenance;
• The provision of first responder training to the Fire Department and other City emergency personnel in the event of an emergency associated with pipeline operations, including an unplanned release; and,
• Other conditions, as may be reasonable and necessary, to ensure the ongoing safe operation of the proposed project.
The Public Works Department has received and reviewed the proposed pipeline conversion permit application and found it to be compatible with the proposed use and not an obstacle to any street use nor any known or proposed developments. This permit is also in compliance with Long Beach Municipal Code Section 15.44.070, Conditions for Use of City Property. There will be no excavations involved with this action.
A Certificate of Liability Insurance is approved by the Department of Human Resources, Risk Management along with the City Attorney’s Office and is on file with the Public Works Department. A bond of $250,000 has also been approved and is on file with the Public Works Department.
Environmental Review/CEQA Determination
The project before the City Council is part of a larger project knows as the “Air Products Hydrogen Pipeline Project.” The larger project consists of the construction of a new 0.5-mile pipeline segment to an existing 11.5-mile long series of pipelines from Air Products’ existing hydrogen facility in the City of Carson to the World Energy Paramount Refinery in the City of Paramount. The City of Carson, as lead agency, certified the FEIR in November 2020. The City of Carson acted as the lead agency under CEQA. The City of Carson was the appropriate lead agency since it had the primary responsibility for approving the Conditional Use Permit for the expansion of the facility in its jurisdiction. The FEIR assesses the change of use of the approximately 4.3 miles of pipeline, the removal of the valves, and the installation of a new manual valve all located within Long Beach. The City and Port of Long Beach are two of the responsible agencies identified. Responsible agencies are entities that have some discretionary approval over a part of the project. In this instance, the City Council is issuing permits for the conversion of the lines to hydrogen gas, which qualifies as discretionary. In its role as a responsible agency, the City relies upon the CEQA documents prepared by the lead agency, in this case the City of Carson. However, the City must still exercise its own independent judgement with regards to those aspects of the project within its jurisdiction. In February 2021, the Port of Long Beach approved the portion of the project within its jurisdiction.
Based on a review of the FEIR certified by the City of Carson in November 2020 (State Clearinghouse No. 2020059038), the City of Long Beach as a responsible agency, has made certain findings (Attachment B - Conversion to Service Plan, 2018 to Present, and Attachment C - Pipeline Safety in Your Community Brochure) pursuant to Public Resources Code section 21081 and Title 14 California Code of Regulations Section 15091, and makes certain findings regarding the Statement of Overriding Considerations pursuant to Public Resources Code Section 21081 and Title 14 California Code of Regulations Section 15093, and sets forth and adopts a Mitigation Monitoring and Reporting Plan (MMRP) that pertains to the change in use from petroleum products to hydrogen gas products and operation for the existing subsurface pipeline and aboveground “Line 4 and Line 12” within Long Beach, referred to on Figure 2-5 through Figure 2-9 of the FEIR pursuant to Public Resources Code Section 21081 and Title 14 California Code of Regulations Section 15097.
This matter was reviewed by Deputy City Attorney Erin Weesner-McKinley on April 5, 2021 and by Budget Management Officer Rhutu Amin Gharib on April 8, 2021.
TIMING CONSIDERATIONS
City Council action is requested on April 20, 2021, to ensure the new permit for the operation of the converted pipeline for transportation of hydrogen products is in place expeditiously.
FISCAL IMPACT
The annual hazardous pipeline fee revenue is $29,385, which will be adjusted annually based on the Consumer Price Index (CPI) and will continue to be deposited in the General Fund Group in the Public Works Department. There is no local job impact associated with this recommendation. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
ERIC LOPEZ
DIRECTOR OF PUBLIC WORKS
APPROVED:
THOMAS B. MODICA
CITY MANAGER