On June 21, 2016, the U.S. District Court of Wyoming (“District Court”) rejected the Bureau of Land Management’s (“BLM”) regulations for hydraulic fracturing on federal and Indian lands. In doing so, the District Court held that (1) BLM’s originating land use, management, and planning statutes did not grant BLM authority to regulate hydraulic fracturing and (2) Congress’s exclusion of non-diesel hydraulic fracturing from the Environmental Protection Agency’s (“EPA”) underground injection control (“UIC”) programs means that no federal agency can regulate hydraulic fracturing.
On March 26, 2015, BLM issued its final hydraulic fracturing regulations in response to concerns over whether hydraulic fracturing can contaminate underground water sources (see October 5, 2015 edition of the WER). BLM stated that the goals of the rules were to ensure that wells are properly constructed to protect water supplies, to ensure that the fluids that flow back to the surface are managed in an environmentally responsible way, and to require public disclosure of the chemicals in the hydraulic fracturing fluids. Various petitioners challenged the final rules, arguing in part that the rules exceeded BLM’s statutory authority.
In its order, the District Court first held that none of BLM’s originating land use, management, and planning statutes grant it the authority to issue regulations that apply to hydraulic fracturing, despite BLM’s argument that various statutes provide it with broad authority to regulate all oil and gas operations on federal and Indian lands. Furthermore, the District Court rejected BLM’s argument that it has long regulated hydraulic fracturing and other well stimulation techniques, finding that BLM’s regulations only require notice and approval prior to land disturbance or require operators to avoid groundwater pollution, rather than regulating the hydraulic fracturing process itself. In addition, the District Court noted that BLM had previously claimed that it lacked the authority to regulate hydraulic fracturing and held that an agency receives regulatory authority from Congress, not from its self-proclaimed prior regulatory activity. Finally, the District Court held that when Congress explicitly excluded non-diesel hydraulic fracturing from the EPA’s UIC program, which governs the underground injection of fluids on all lands, Congress intended to remove hydraulic fracturing from the realm of federal regulation. Accordingly, the District Court held that BLM lacked the authority to issue its hydraulic fracturing regulations.
A copy of the order is available here.