Federal court kills BLM fracking rule

By Ellen M. Gilmer | 06/22/2016 08:51 AM EDT

The Obama administration’s hydraulic fracturing rule is dead.

In a monumental ruling last night, the U.S. District Court for the District of Wyoming struck down the years-in-the-making regulation, concluding that the Bureau of Land Management has no authority over fracking.

Supporters of the rule plan to appeal the decision, calling it a stunning assault on BLM’s ability to regulate development on public lands.


The ruling came down last night from Judge Scott Skavdahl. The Obama appointee sided with the four states that last year challenged the rule as an overstep of agency authority.

According to Wyoming, Colorado, North Dakota and Utah, Congress expressly removed fracking from the federal government’s turf through the Safe Drinking Water Act and Energy Policy Act of 2005.

Skavdahl agreed, finding that Congress never delegated authority over fracking to BLM or the Interior Department.

"Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing," he wrote. "The BLM’s effort to do so through the Fracking Rule is in excess of its statutory authority and contrary to law."

The decision is a blow to the Obama administration, which crafted the rule as its marquee effort to crack down on the environmental impacts of hydraulic fracturing, the production technology that helped transform the onshore U.S. oil and gas industry. While the rule is officially scrapped, supporters are expected to appeal the decision through the 10th U.S. Circuit Court of Appeals.

Still, Interior framed the decision as a "delay" while legal battles around the rule continue.

"It’s unfortunate that implementation of the rule continues to be delayed because it prevents regulators from using 21st century standards to ensure that oil and gas operations are conducted safely and responsibly on public and tribal lands," an agency spokeswoman said in an email.

Industry rejoices

Critics of the fracking rule praised the decision.

The court focused on questions of federal authority and did not delve into oil and gas industry arguments about whether the rule was properly crafted. Industry challengers still viewed the decision as a major victory.

"Today’s decision demonstrates BLM’s efforts are not needed and that states are — and have for over 60 years been — in the best position to safely regulate hydraulic fracturing," Independent Petroleum Association of America spokesman Neal Kirby said last night.

IPAA and the Western Energy Alliance have argued that the rule placed illogical or infeasible requirements on operators and would be drastically more expensive than BLM projected.

Industry lawyer Mark Barron, of BakerHostetler, noted that those arguments will still be in play at the 10th Circuit. He also warned against "drawing broad conclusions" and argued that the ruling has a limited scope that will not hamstring the agency from performing its traditional regulatory role.

"There is no need to extrapolate this decision to any other technique," he said. "This is a pretty unique situation, one that Congress has spoken to specifically and expressly."

The Ute Tribe, another challenger of the fracking rule, also missed out on star treatment in last night’s decision. The tribe’s arguments about the legality of the rule’s application to tribal lands made only a brief appearance in Skavdahl’s ruling, though the judge slammed BLM last year for not engaging in "meaningful" consultation with tribes before issuing a rule that treats their lands no different from public lands.

‘Key tool to protect public lands’

Interior and its allies, meanwhile, decried the decision as a legally flawed ruling that will result in harm to public and tribal lands.

In an email, Interior reiterated the purpose of the rule: "ensuring adequate well control, preventing groundwater contamination, and increasing transparency about the materials used in the fracturing process."

Earthjustice attorney Mike Freeman, representing environmental groups who intervened in the case, said the ruling, if upheld, would mark a dramatic change in BLM’s ability to oversee public lands.

"It would drastically change how public lands in this country are managed and rob the federal government of a key tool to protect public lands from energy companies," he told EnergyWire.

"BLM’s updating its regulations to try and deal with the reality of oil and gas development today," he added. "To rule that the agency doesn’t have authority to address hydraulic fracturing ignores the reality of what oil and gas development involves."

The district court decision comes just a day after BLM and environmentalists finished briefing a related battle at the 10th Circuit over whether the district court was correct in freezing the rule during litigation (EnergyWire, June 21). That thread of the litigation will now either be dismissed or rolled into the broader appeal of yesterday’s decision.