For the first time since a federal court froze the Obama administration’s landmark hydraulic fracturing rule last fall, the Interior Department and environmental allies unleashed their full counterattack.
In opening briefs before the 10th U.S. Circuit Court of Appeals, government and environmental lawyers railed against the Wyoming district court’s preliminary injunction of the fracking rule, calling it a legal error that ignored federal law and precedent. The rule — which regulates well construction, wastewater management and chemical disclosure for fracking on public and tribal lands — has been tied up in litigation since its release a year ago.
The 10th Circuit appeal comes after the district court last September not only enjoined the fracking rule but also questioned whether Interior’s Bureau of Land Management had authority to regulate fracking at all. In his ruling, Judge Scott Skavdahl found that industry and state opponents to the fracking rule were likely to succeed in their underlying arguments against the administration because "the Court does not believe Congress has granted or delegated to the BLM authority to regulate fracking" (EnergyWire, Oct. 1, 2015).
Justice Department lawyers representing BLM took aim at the judge’s reasoning in an opening brief yesterday, arguing that the Mineral Leasing Act, the Federal Land Policy and Management Act and other statutes give Interior broad authority over development on public and American Indian lands.
"In those statutes, Congress expressly delegated BLM broad authority to regulate oil and gas operations on federal and Indian lands, and hydraulic fracturing is one such operation," the lawyers told the court. "BLM and its predecessors have regulated well-stimulation techniques similar to hydraulic fracturing since 1936 and have regulated hydraulic fracturing since 1982. … Through such regulations, BLM fulfills its statutory duty to act as guardian of the public interest in the development of resources owned or held in trust by the federal government."
The administration also criticized the states’ argument — accepted by the lower court — that the Safe Drinking Water Act and Energy Policy Act of 2005 were intended to exempt fracking from federal oversight. In the district court opinion, Skavdahl cited a 2009 law review article on federal regulation of oil and gas. But, the lawyers noted in yesterday’s brief, the author herself has since disputed the judge’s interpretation, clarifying that her article addressed only a narrow exemption for hydraulic fracturing from the Safe Drinking Water Act — not a broad exemption from public lands laws.
Further, BLM’s lawyers argued, the preliminary injunction of the fracking rule was based on the erroneous conclusion that the agency crafted the rule without a good reason — as industry has called it "a solution in search of a problem." Industry and states have repeatedly asked BLM to justify the rule by citing examples of groundwater contamination from fracking. BLM argues that it doesn’t need to supply clear evidence; the incomplete science is enough to justify the rule.
"BLM candidly acknowledged that ‘efforts to trace contaminants in groundwater to specific hydraulic fracturing operations have been controversial, in light of the technical difficulties and scientific uncertainties,’" the brief says, citing the text of the rule. "However, given its statutory duty to be ‘proactive in the protection of resources on Federal and Indian lands,’ BLM was reluctant ‘to wait for a significant pollution event before promulgating common-sense preventative regulations.’"
Finally, DOJ lawyers took issue with the district court’s conclusions that the agency had violated its own tribal consultation policy and that the rule did not adequately consider the costs imposed on industry.
Environmental groups supporting the rule also assailed the lower court’s preliminary injunction, arguing that the court failed to properly defer to BLM’s judgment on the issue.
"We respectfully disagree with the district court on BLM’s authority to issue the rule," Earthjustice attorney Michael Freeman told EnergyWire. "The statute and case law on that issue are, we think, very clear.
"The district court improperly substituted its own policy judgment," he added.
Under a legal standard known as Chevron deference, courts typically defer to an agency’s judgment when it is interpreting an ambiguous statute, so long as that interpretation is reasonable.
"BLM’s interpretation of FLPMA and the MLA as providing authority to issue the Rule prevails under both Chevron steps," lawyers for Earthjustice and the Sierra Club wrote in their brief. "The Court should afford BLM particular deference because the Rule reflects a long-standing agency interpretation of those statutes."
The environmental groups also argued that the district court incorrectly determined that industry and states would face irreparable harm — part of the legal standard for an injunction — if the rule moved forward.
"The district court’s approach ignores black-letter law that only ‘great’ and ‘substantial’ harm justifies injunctive relief and that an injunction is an ‘extraordinary’ remedy not normally available for economic harms," the groups wrote, noting that the fracking rule would impose only "modest regulatory compliance costs" that are not sufficient to support an injunction.
Industry, the Ute Indian Tribe and the states opposed to the rule — Wyoming, Colorado, North Dakota and Utah — are set to file their own briefs in late April. The appeal and the underlying district court case are moving forward at the same time (EnergyWire, March 11).