Wednesday, May 23, 2018

Shale Law in the Spotlight – UPDATE: Current Legal Developments Relating to Bureau of Land Management (BLM) Rules on Methane Waste Prevention and Hydraulic Fracturing

Written by Chloe Marie – Research Fellow

In a prior article, we provided an update on legal developments regarding the BLM Waste Prevention and Hydraulic Fracturing rules. This followed the publication last year of two articles - one relating to the status and overview of the BLM Hydraulic Fracturing Rule and another relating to the Methane Waste Prevention Rule. This article provides a second update on the legal developments pertaining to these rules.

·       Update on BLM Methane Waste Prevention Rule

Following the issuance of the Suspension Rule on December 8, 2017, delaying certain provisions of the Waste Prevention Rule, the Interior Department, along with the Western Energy Alliance and Independent Petroleum Association of America, and the states of Wyoming and Montana, jointly filed on December 26, 2017, a motion to stay the ongoing cases regarding the Suspension Rule pending the administrative review of the Waste Prevention Rule. [State of Wyoming et al. v. U.S. Dept. of the Interior et al. (2:16-cv-00285) and State of California et al. v. Bureau of Land Management et al. (3:17-cv-07186)]. All parties agreed that “it currently would not be a wise use of the Parties’ or the Court’s resources to adjudicate the merits of this case given that the Suspension Rule has been published and will be effective on January 8, 201[8], and the BLM is in the process of issuing a proposed Revision Rule.”  On December 29, 2017, the U.S. District Court for the District of Wyoming ordered the stay of the above-referenced cases while the Suspension Rule is effective and pending review of the Waste Prevention Rule.

Subsequently, on February 22, 2018, BLM issued a proposed rule revising the Waste Prevention Rule and sought public comments “on ways that the BLM can reduce the waste of gas by incentivizing the capture, reinjection, or beneficial use of gas.” On the same day, the U.S. District Court for the Northern District of California granted a preliminary injunction enjoining the Suspension Rule from becoming effective pending current litigation. Consequently, the Waste Prevention Rule again entered into force, thereby rendering the Suspension Rule ineffective. The U.S. District Court stated that “BLM’s reasoning behind the Suspension Rule is untethered to evidence contradicting the reasons for implementing the Waste Prevention Rule, and so plaintiffs are likely to prevail on the merits.”

On February 28, 2018, the states of Montana and Wyoming filed a joint motion before the U.S. District Court for the District of Wyoming to lift the stay order entered December 29, 2017, and to suspend the implementation deadlines in the Waste Prevention Rule in light of the preliminary injunction granted by the U.S. District Court in California. The state parties contended that “the Court [previously] stayed this case … because it was clear that ‘moving forward to address the merits of the present Petitions for Review in these case, in light of the now finalized Suspension Rule and the BLM’s continued efforts to revise the Waste Prevention Rule, would be a waste of resources … Nevertheless, the reinstatement of the Waste Prevention Rule returns the ball to this Court for further proceedings.”

On April 4, 2018, the U.S. District Court for the District of Wyoming ruled in favor of the states of Montana and Wyoming finding that “the most appropriate and sensible approach is to exercise its equitable discretion to stay implementation of the Waste Prevention Rule’s phase-in provisions and further stay these cases until the BLM finalizes the Revision Rule, so that this Court can meaningfully and finally engage in a merits analysis of the issues raised by the parties.”

·       Update on BLM Hydraulic Fracturing Rule


On January 24, 2018, the state of California asked the U.S. District Court for the Northern District of California to vacate the rescission rule published on December 29, 2017, and to reinstate all provisions of the 2015 Hydraulic Fracturing rule (see State of California v. Bureau of Land Management et al., Docket no. 4:18-cv-00521). No significant legal developments have been recorded in this action to date.

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