On September 30, 2015, the U.S. District Court for the District of Wyoming granted a motion for a preliminary injunction preventing enforcement of the U.S. Bureau of Land Management's (BLM) recently issued hydraulic fracturing rule. BLM issued the rule in March, attempting to exert jurisdiction over hydraulic fracturing on federal and Indian lands. But the district court's decision prohibits the BLM from implementing the new rule while litigation over the rule's legality is pending.
The lawsuit, filed shortly after BLM issued the hydraulic fracturing rule, was originally brought by the Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (the Alliance) in the U.S. District Court for the District of Wyoming. The lawsuit now includes challenges from four states—Wyoming, North Dakota, Colorado, and Utah—and the Ute Indian Tribe.
In the initial motion for preliminary injunction, IPAA and the Alliance argued that the BLM's rule was a remedy in search of a harm, as BLM failed to identify any proven environmental risk or regulatory gap that the rule addressed. The states and tribe contended that the BLM's rule infringed on their respective sovereignty. All challengers argued that the implementation of the final hydraulic fracturing rule would cause irreparable harm and requested that the court enter an order preventing BLM from implementing the rule until the court resolved the merits of the underlying lawsuit.
Yesterday the district court agreed, concluding that the industry, state, and tribal challengers had presented credible evidence that the rule lacked a rational justification and was not supported by substantial evidence. What's more, the court held that BLM likely lacks the authority to regulate hydraulic fracturing at all. The imposition of such a legally infirm rule, the court concluded, would likely result in irreparable harm to oil and gas operators on federal and Indian lands, which existing federal and state rules already protect from environmental harm.
In the ruling, Judge Skavdahl supported the oil and gas industry's position, noting the following: "The BLM has neither substantiated the existence of a problem this rule is meant to address, identified a gap in existing regulations the final rule will fill, nor described how the final rule will achieve its stated objectives." In addition, Judge Skavdahl said that BLM "fails to reference a single confirmed case of the hydraulic fracturing process contaminating groundwater." In holding that BLM likely lacks the authority to regulate hydraulic fracturing, the court chastised BLM's erroneous interpretation of its authority as an attempt "to do an end-run around the [Energy Policy Act of 2005]."
In the immediate future, the BLM or special-interest-group intervenors will likely file an emergency appeal, requesting that the U.S. Court of Appeals for the Tenth Circuit overturn the preliminary injunction. Regardless of whether an appeal is filed, the next major step in the litigation will be motions practice regarding the sufficiency—or lack thereof—of the BLM's administrative record, which will be followed by briefing on the merits. Assuming the district court's ruling stands, the preliminary injunction should remain in effect through at least the remainder of 2015.
With the preliminary injunction in hand, independent oil and gas producers will now be able to conduct their exploration and production operations on federal and Indian lands without the worry of duplicative and onerous BLM hydraulic fracturing regulations.
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