BLM Fracking Rule

The Bureau of Land Management (BLM) finalized its rule on hydraulic fracturing (fracking) on March 20, 2015. The rule adds redundant regulations for oil and natural gas development on federal and Indian lands throughout the nation, and will particularly discourage investment and job creation in the West.

IPAA and Western Energy Alliance immediately filed suit. Our lawsuit argues the rule is not properly justified and duplicates state regulation. States have been regulating fracking for many years and have strengthened their regulations recently as activity has increased and technology has improved. In fact, 100% of the permits to drill approved in 2014 by the Interior Department are in states with recently updated fracking regulations. Wyoming, ColoradoNorth Dakota, Utah, the Ute Tribe and the Southern Ute Tribe are also suing BLM over the rule. Industry stands with the states and tribes and their proven record of success.

On September 30th, 2015, U.S. District Court of Wyoming Judge Scott W. Skavdahl granted a preliminary injunction of the Bureau of Land Management’s (BLM) hydraulic fracturing rule, finding that, “Congress has not authorized or delegated to the BLM authority to regulate hydraulic fracturing…” Judge Skavdahl found not only that the Independent Petroleum Association of America (IPAA) and Western Energy Alliance are likely to prevail in their challenge to the rule as arbitrary and capricious, but also that the states of Colorado, North Dakota, Utah and Wyoming and the Ute Tribe showed that BLM had exceeded its authority. 

The judge found the state petitioners’ arguments compelling, that Congress has indeed not given BLM the authority to regulate hydraulic fracturing. He also agreed with IPAA and Western Energy Alliance that BLM has failed to justify the rule; BLM could point to no risk from fracking that is not already being managed successfully by the states, or demonstrate that its rule will deliver any environmental benefit not already provided by the states.

We are finally getting relief from the courts regarding the regulatory overreach of the Obama Administration.  Following on the heels of the U.S. District Court of North Dakota’s rebuke of the Waters of the U.S. rule, we hope BLM, EPA and other agencies that are rushing to implement even more regulation on the very businesses that create jobs will pause and actually follow the law and regulatory procedure. The law and separation of powers aren’t a relic of the Constitution that can simply be circumvented by federal agencies; they are there to ensure the government acts in a way that benefits the American people. 

Disadvantage Western Public Lands States

  • States and tribes have reacted strongly to the rule because it infringes upon their regulatory primacy, and the large economic impact will further disadvantage Western states compared to other production areas of the country without public lands.
  • The rule will divert investment away from energy development, job creation and economic growth into federal compliance redundant with state regulation, further disadvantaging Western public lands states.
  • The increase in the cost of development will reduce royalty and tax revenue to the American taxpayers, tribes, Western states and local governments as development moves to other areas without federal lands.

Federalism

  • States have successfully regulated more than 1.2 million fracking operations spanning 60 years; new federal mandates are not necessary given their exemplary safety record. State rules specifically tailored to each state’s unique geologic and hydrologic conditions better protect the environment and groundwater than a one-size-fits-all federal rule.
  • 98% of all federal wells are in just seven states: California, Colorado, Montana, North Dakota, New Mexico, Utah, and Wyoming. Since 2010, these states have all strengthened their fracking and well construction regulations. Of the ten states accounting for the remaining 2%, all have strengthened their regulations as well.
  • The variance language in the proposed rule actually does not provide a mechanism for crediting state rules, despite public messaging from the Department of the Interior.
  • Companies must obtain a state permit and comply with all state regulations when operating on federal lands. State regulators continue to develop new regulations collaboratively with the public. Industry and states have collaboratively responded to public concerns about the safety of fracing, and companies voluntarily disclose chemicals via FracFocus.org or in compliance with state regulations.
  • The rule imposes an entire redundant regulatory process that will exacerbate existing delays. While states efficiently process permits in an average of 30 days, the federal government takes 228 days. The rule would likely add another 100 days to permitting times.
  • BLM seems to be moving aggressively forward with regulations and permit terms that will allow it to take over control of state water rights. EPA and the states have jurisdiction over water quality and usage rights, not BLM, and this is an unacceptable usurpation of state’s rights guaranteed by the 10th Amendment.

Lack of Justification

  • There are no incidents of contamination from fracking on public or other lands that necessitate federal regulation, and BLM has offered no justification for proceeding with the development of these rules. 
  • The Environmental Protection Agency (EPA) has studied the impacts of fracking, finding no “widespread, systemic” risks, yet BLM is moving forward without being informed by the scientific conclusions and recommendations of the study.
  • At a time of decreasing federal budgets and staff, BLM does not have the expertise and resources to implement a full new regulatory regime redundant with state efforts.