BLM’s Controversial Hydraulic Fracturing Rule is Postponed Nationwide

The Spring 2015 issue of Energy Resources Notes reported on the Bureau of Land Management’s (BLM’s) adoption of a controversial final rule addressing hydraulic fracturing (HF) operations and related water handling, well casing, chemical reporting and monitoring requirements for federal and Indian lands.  A day before the rule was to become effective, however, a group of tribal, state and industry interests successfully challenged the rule in the Federal District Court for the District of Wyoming, convincing the court to stay the rule’s application nationwide.1

  As a result of the Order, existing BLM rules for processing applications for permits to drill and conducting well site inspections on federal and tribal lands are still in effect.

A basis for the court’s ruling is to prevent the “credible threat” of grave financial harm to oil and gas operators during a period when the court will take up and rule on pending preliminary injunction motions.  The court’s recognition that a stay is necessary to prevent irreparable injury—a concept embedded in the Administrative Procedure Act (APA) postponement statute at 5 U.S.C. Section 705—may signal the likely outcome of the preliminary injunction motions, because “probable irreparable harm” is the “single most important” element to be established in order to obtain a preliminary injunction, according to the Tenth Circuit in Dominion Video Satellite, Inc. v. Echostar Satellite Corp.2

The consolidated Wyoming litigation over BLM’s HF rule was originally brought on behalf of the Independent Petroleum Association of America and Western Energy Alliance, and was expanded to include—as additional challengers of the rule—a handful of western states and the Ute Indian Tribe.  Other nongovernmental organizations intervened in support of BLM’s rule.  The pending challenges include asserted failures to adequately comply with the APA, lack of consideration of the financial impact of compliance with the rule, inadequacy of BLM’s jurisdiction over regulation of downhole activities, and alleged infringements on state regulatory jurisdiction and tribal sovereignty.  It is not clear when the court may rule on the pending preliminary injunction motions or otherwise dispose of the challenges pending review.  In any event, for now, BLM’s HF rule is not in effect nationwide.

  1. 1. See Order Postponing Effective Date of Agency Action dated June 24, 2015 (Order) in State of Wyoming, et. al v. United States Dept. of Interior, Case Nos. 2:15-CV-043-SWS and 2:15-CV-041-SWS (consolidated).
  2. 2. 356 F.3d 1256, 1260 (10th Cir. 2004)

POSTED IN: Articles