BLM Hydraulic Fracturing Rule Update: status of appeal

Since its publication in the Federal Register on March 26, 2015, the Bureau of Land Management’s hydraulic fracturing final rule on federal and Indian lands has been creating a stir among the oil and gas community.

The BLM hydraulic fracturing rule is designed to complement existing requirements for oil and gas operations on public and Indian lands by adding new requirements to approach hydraulic fracturing in a more cautious manner. As part of these new requirements, the rule “requires operators on federal and Indian lands to submit information to BLM and obtain a permit before beginning fracturing operations; to follow modern design standards to ensure wellbore integrity and protect usable water; to properly manage recovered fluids; and to disclose fracturing chemicals, subject to a process for withholding proprietary information.”

On March 20, 2015, prior to the publication of the final rule, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance (WEA) filed a Petition for Review of final agency action in the U.S. District Court for the District of Wyoming. Clashing on whether BLM’s regulatory authority over oil and gas operations on federal and Indian lands extends to hydraulic fracturing operations, IPAA and WEA argued that “the regulatory conditions the final rule imposes constitute arbitrary and unnecessary burdens that either duplicate state law requirements or improperly curtail the primary jurisdiction of state governments” before adding that “the regulations are not properly tailored to achieve a legitimate government purpose.” In May 2015, the two industry associations filed a Motion for Preliminary Injunction. Subsequently, the states of Wyoming and Colorado joined the suit and also filed a Motion for Preliminary Injunction alleging that only states are authorized to regulate hydraulic fracturing in accordance with the Safe Drinking Water Act and the 2005 Energy Policy Act. The states of Colorado and North Dakota as well as the Southern Ute Indian Tribe also filed a lawsuit against BLM in the U.S. District Court for the District of Colorado.

Following a preliminary injunction hearing, the U.S. District Court for the District of Wyoming issued a temporary order, on June 24, 2015, delaying the effective date of the final rule. The final rule was originally set to take effect on this same day. In September 2015, the same U.S. District Court granted all motions for preliminary injunction barring enforcement of the final rule. The Court found that the BLM invaded Congressional authority in regulating hydraulic fracturing and that all petitioners are likely to suffer irreparable harm in the absence of a preliminary injunction.

In December 2015, the Department of Interior and the BLM appealed the District Court’s preliminary injunction order to the Tenth Circuit Court of Appeals. In their opening briefs submitted on March 21, 2016, the DOI and BLM argued that BLM has received broad authority from the Congress to regulate oil and gas operations on federal and Indian Lands on the grounds of the Mineral Leasing Act, Indian Mineral Statutes, and Federal Land Policy and Management Act. In addition, DOI and BLM argue that the final rule is not “arbitrary” or “capricious” as it is “necessary to address concerns raised by the increased technological complexity and expansion of hydraulic fracturing.” Appellees’ opening briefs in response to the DOI and BLM’s arguments is expected by April 25, 2016.

Further information on the case before the U.S. District Court for the District of Wyoming is available at docket no. 2:15-cv-041.  Information on the case before the U.S. Tenth Circuit Court of Appeals is available at docket no. 15-8126.

Written by Chloe Marie - Research Fellow