ATTACHMENT A: FINDINGS

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1 ATTACHMENT A: FINDINGS 1.0 CEQA FINDINGS 1.1 CEQA Exemption The County Planning Commission finds that the proposed project is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to CEQA Section Please see Attachment C, Notice of Exemption. 2.0 ADMINISTRATIVE FINDINGS/DEVELOPMENT PLAN FINDINGS 2.1 Findings required for all Preliminary or Final Development Plans. In compliance with Subsection E.1 of the County Land Use and Development Code, prior to the approval or conditional approval of an application for a Preliminary or Final Development Plan the review authority shall first make all of the following findings, as applicable: The site for the subject project is adequate in terms of location, physical characteristics, shape, and size to accommodate the density and intensity of development proposed. The proposed project would include construction and operation of a 1.2-mile, buried crude oil pipeline and associated above-ground equipment (metering skid and pig launcher/receiver facilities). As discussed in Section 5.3 of this Staff Report dated January 6, 2016, and hereby incorporated by reference, the proposed project would not result in any change in existing utilities or service systems. The new pipeline would be an in-kind replacement of the existing pipeline with respect to diameter, length, location, and capacity. The new pipeline would be constructed within an existing pipeline corridor and adjacent to the existing pipeline, and all above-ground equipment would be constructed within previously disturbed areas (i.e. within an existing oil and gas facility and adjacent to an existing valve box). The existing pipeline corridor is adequate in terms of location, physical characteristics, shape, and size to accommodate the proposed replacement pipeline. Therefore, this finding can be made Adverse impacts will be mitigated to the maximum extent feasible. The project description and all conditions of approval (Attachment B) included in this Staff Report dated January 6, 2016, and hereby incorporated by reference, would ensure that adverse impacts will be mitigated to the maximum extent feasible. The new proposed pipeline would be equipped with an automatic shutdown system that triggers the automatic shutdown and isolates the line, if necessary, when operating parameters (flow and pressure) deviate from the normal operating range. These and other safety features of the pipeline would ensure that adverse impacts will be mitigated to the maximum extent feasible. Therefore, this finding can be made.

2 Page A Streets and highways will be adequate and properly designed to carry the type and quantity of traffic generated by the proposed use. The proposed project would be limited to installation of a buried crude oil pipeline and associated above-ground equipment (metering skid and pig launcher/receiver facilities). The project would replace an existing pipeline; no change in existing operations would result. Traffic associated with construction activities would last for approximately two to three months. Once constructed, operation and maintenance of the new pipeline would not generate additional traffic. Regional access to the project site would be provided by State Highway 1/135 and local access would be provided by Graciosa Road and existing interior agricultural roads. All streets and highways would be adequate and properly designed to carry the type and quantity of traffic generated by the proposed pipeline. Therefore, this finding can be made There will be adequate public services, including fire and police protection, sewage disposal, and water supply to serve the proposed project. As discussed in Section 6.2 of this Staff Report dated January 6, 2016, and hereby incorporated by reference, there are adequate public services to serve the proposed project. Therefore, this finding can be made The proposed project will not be detrimental to the comfort, convenience, general welfare, health, and safety of the neighborhood and will not be incompatible with the surrounding area. The proposed project would include installation of a buried pipeline and associated above-ground equipment (i.e. metering skid and pig launcher/receiver facilities), and its subsequent operations. The new pipeline would be an in-kind replacement of an existing pipeline. No change to existing operations would result. Construction activities would last approximately two to three months and would be confined to the project site and immediate surroundings. The proposed equipment would be located within previously disturbed areas and situated adjacent to existing equipment associated with oil and gas development. Operation and maintenance of the pipeline would not increase noise or traffic above existing levels. Above-ground structures would be limited to two areas: (1) the pig receiver facility where the new pipeline would connect to the existing Line 300 system near Graciosa Road; and (2) the metering skid and pig launcher facility would be installed within the footprint of an existing oil and gas production facility. The pig receiver facility would have an approximate 20x30-foot footprint with an approximate height of three feet and would be installed directly adjacent to an existing valve box. The pig receiver would be painted in tan/beige colors to match

3 Page A-3 the natural surroundings. The metering skid and pig launcher would be compatible with existing equipment located in the oil and gas facility. The new pipeline would replace an existing pipeline that is approximately 70 years old, thereby reducing operational risks associated with transporting crude oil. The new pipeline would be equipped with an automatic shutdown system that triggers the automatic shutdown and isolates the line, if necessary, when operating parameters (flow and pressure) deviate from the normal operating range. The new pipeline would be equipped with motor operated isolation valves at the start and end of the pipeline as well as a check valve at the end of the pipeline to prevent a backflow. The isolation valves would allow for pipeline shutdown in case of an emergency, isolation of leaks, and use of smart pigs to clean and maintain the entire length of the line. In case of an upset, the shipping pumps would be shut down automatically, shutting down and removing the source of crude into the pipeline. In addition, the applicant s control center would actively monitor the operating conditions of the line. The control center would receive alarms if the operating parameters would go outside the normal operating range. The control center would monitor the pipeline 24 hours a day. Under oversight by the State Fire Marshall, the pipeline, valves, and fittings would be tested per Federal and State Regulations before they are put into service as well as maintained per Federal and State regulations while they are in service. The applicant would implement the following measures to ensure the safe condition and operations of the pipeline: Cathodic protection to prevent corrosion; smart-pigging of the line to determine line integrity; a Supervisory Control and Data Acquisition (SCADA) system to actively monitor pipeline conditions; pigging operations to clear pipeline debris and detect for anomalies; and installation of a corrosion probe to monitor potential internal corrosion of the system. The applicant will maintain a computerized SCADA system that will continuously monitor the transfer of crude oil in the proposed pipeline (see Condition 11 in Attachment B). All safety documents (i.e., Emergency Response Plan, Oil Spill Contingency Plan, Safety, Inspection, Maintenance, and Quality Assurance Program) associated with the applicant s Line 300 pipeline system shall be revised to include the Cal-Coast pipeline (see Condition 10 in Attachment B) The proposed project will comply with all applicable requirements of this Development Code and the Comprehensive Plan. As discussed in Sections 6.2 and 6.3 of this Staff Report dated January 6, 2016, and hereby incorporated by reference, the proposed project is consistent with the applicable provisions of the Comprehensive Plan and the Land Use and Development Code. Therefore, this finding can be made.

4 Page A Within Rural areas as designated on the Comprehensive Plan maps, the use will be compatible with and subordinate to the agricultural, rural, and scenic character of the rural areas. As discussed in Section 6.2 of this Staff Report dated January 6, 2016, and hereby incorporated by reference, the proposed project would be compatible with and subordinate to the agricultural, rural, and scenic character of the rural area. The proposed pipeline would be buried and therefore would not affect the scenic character of surrounding areas. Above-ground equipment would include aboveground pig launcher/receiver facilities (height approximately three feet) and a metering skid (height approximately eight feet). The metering skid, related piping, and pig launcher valve would be installed within the footprint of the existing oil and gas facility and adjacent to the existing Lease Automatic Custody Transfer (LACT) unit and other existing oil and gas equipment larger in size. These structures would not be within public view sight nor would they intrude into the skyline from public viewing. The pig receiver valve would be installed adjacent to an existing valve box located along Graciosa Road. The approximate three foot height structure would not intrude into the skyline and would be painted tan/beige color to blend in with the surroundings. Following construction, the project site and all work areas would be restored to pre-construction condition with respect to natural contour and grade. Long-term operation of the new pipeline would not change the agricultural or rural nature of the pipeline corridor or surrounding areas. Therefore, this finding can be made The project will not conflict with any easements required for public access through, or public use of a portion of the subject property. There are no easements required for public access through, or public use of a portion of the subject property. Therefore, this finding can be made. 2.2 Additional findings required for oil and gas pipelines located in the Inland area outside of industry facilities. In compliance with Section of the County Land Use and Development Code, prior to the approval or conditional approval of an application for a Preliminary or Final Development Plan for an oil or gas pipeline located in the Inland area outside of industry facilities the review authority shall first make all of the following findings: Use of available or planned common carrier and multiple-user pipelines is not feasible. The proposed pipeline would replace an existing pipeline, which transports crude oil from the Cal-Coast Lease into Phillips 66 s existing Line 300 transmission pipeline. There is no common carrier or multiple-user pipeline that is available or planned between these two points. The existing pipeline transports produced oil from four existing oil and gas leases (Pinal, Diatomite, Newlove, and Cal-Coast)

5 Page A-5 and has the capacity to transport up to 15,000 barrels of oil per day. There are no other oil and gas development projects in the area that are currently proposed or reasonably anticipated in the future. Despite the lack of need of other users, the proposed 6-inch diameter pipeline is appropriately sized for current and, if needed, potential future crude oil production in the area. Consistent with County policy, the pipeline would be available for any other users in the future. The replacement pipeline would tie into Line 300 while the existing pipeline ties into Line 353. This will allow Line 353 to be idled and allow Line 300 to consolidate and transport all crude oil heading to the Orcutt Pump Station. Therefore, this finding can be made Pipelines shall be constructed, operated, and maintained as common carrier or multiple-user pipelines unless the applicable review authority determines it is not feasible. Applicants have taken into account the reasonable, foreseeable needs of other potential shippers in the design of their common carrier and multiple-user pipelines. Multiple-user pipelines provide equitable access to shippers with physically compatible stock on a nondiscriminatory basis. As discussed in Finding of this Staff Report, dated January 6, 2016, and hereby incorporated by reference, no common carrier or multiple-user transmission line currently exists to provide the connection between the Cal-Coast Lease and Phillips66 Line 300. In addition, there is no present, anticipated, or reasonably foreseeable need for additional pipelines in the area. However, the proposed pipeline would be constructed, operated, and maintained as a common carrier or multiple-user pipeline consistent with County policy. The replacement pipeline would tie into Line 300 while the existing pipeline ties into Line 353. This will allow Line 353 to be idled and allow Line 300 to consolidate and transport all crude oil heading to the Orcutt Pump Station. Therefore, this finding can be made New pipelines are routed in approved corridors that have undergone comprehensive environmental review unless the applicable review authority determines that the corridors are not available, safe, technically feasible, or the environmentally preferred route for the proposed new pipeline. The proposed pipeline route would allow Phillips 66 to utilize an existing pipeline corridor to replace an existing line between the Cal-Coast Lease and the existing Phillips 66 Line 300 transmission line located adjacent to Graciosa Road. There is currently an existing 6-inch pipeline between these points. Use of the existing pipeline corridor for the proposed project would limit development primarily to previously disturbed areas and avoid environmental impacts associated with construction of a new pipeline corridor. There was no need to analyze alternative pipeline routes since the proposed pipeline route would be within the existing pipeline corridor. Use of the existing pipeline corridor is the environmentally

6 Page A-6 preferred route because any other alternative route would require construction of a new pipeline corridor and environmental impacts associated with expanding development into previously undisturbed areas. Therefore, this finding can be made When a new pipeline route is proposed, it is environmentally preferable to other feasible alternative routes. As discussed above in Finding of this Staff Report, dated January 6, 2016, and hereby incorporated by reference, the proposed pipeline would be buried within an existing pipeline corridor extending between the Cal-Coast Lease and Graciosa Road. There was no need to analyze alternative pipeline routes since the proposed pipeline would be within the existing pipeline corridor. Use of the existing pipeline corridor is environmentally preferable to any other feasible alternative route because it would confine project activities to previously disturbed areas and avoid environmental impacts associated with construction of a new pipeline corridor into previously undisturbed areas. Therefore, this finding can be made When a new pipeline is proposed, the project s environmental review has analyzed the cumulative impacts that might result from locating additional pipelines in that corridor in the future. The proposed pipeline would be an in-kind replacement of an existing pipeline with respect to size, location, and operational capacity. In order to preemptively reduce project impacts to the maximum extent feasible, the applicant has included specific measures in the project description. Additionally, staff has recommended conditions for the project to comply with County policies that protect natural resources (Attachment B). There is no present, anticipated, or reasonably foreseeable need for additional pipelines extending from the Cal-Coast Lease as there are no other potential shippers in the area. Despite the lack of need of other users, the proposed 6-inch diameter pipeline is appropriately sized for current and, if needed, potential future crude oil production in the area. Consistent with County policy, the pipeline would be available for any other users in the future. Therefore, no additional pipelines would be located in the corridor in the future and thus no cumulative impacts would result. Therefore, this finding can be made Concurrent or "shadow" construction has been coordinated with other pipeline projects that are expected to be located in the same corridor where practical. PCEC owns and operates all oil and gas development on the four leases that feed into the Cal-Coast pipeline. There are no current or anticipated future oil and gas development projects in the project vicinity; thus, no other pipeline projects are expected to be located in the same corridor. Therefore, this finding can be made.