Energy

Federal Judge Rules Fracking Regulations Illegal

As the Obama administration continues to impose its “Regulatory Train Wreck” on the American public, a federal judge in Wyoming has granted the oil and gas industry a reprieve of sorts.

In March 2015, the Bureau of Land Management (BLM) issued the first major federal regulations on hydraulic fracturing. Whereas states currently regulate the well-stimulation technique on private and state land almost exclusively, the new rule imposed additional federal requirements for production on federal land. Currently, there are 90,000 or so oil and gas wells on federal land, accounting for roughly five and 11 percent of the oil and natural gas consumed in the U.S., respectively. The new rule requires oil and gas producers working on federal lands to publicly disclose the chemicals used in the fracking process and to submit detailed information on well geology to BLM. The rule also provides for the federal government to periodically send inspectors to drill sites to examine the concrete lining of wells.

While oil and gas producers initially claimed that the rules were largely unnecessary in that they sought to address a problem that didn’t exist, the main concern over the new regulations is that they brazenly fly in the face of a 2005 measure passed by Congress and signed into law by President George W. Bush.

The omnibus Energy Policy Act of 2005 did a great many things, but in an effort to spur domestic oil and gas production, it unambiguously exempted fluids used in the fracking process from being regulated under the Safe Drinking Water Act (SDWA). In effect, states would continue to exercise sole regulatory jurisdiction over hydraulic fracturing, as they have for over six decades. In light of this amendment that clearly shows congressional intent to eliminate federal departments and agencies from participating in the regulatory process, could BLM still develop rules targeting hydraulic fracturing on federal land?

According to U.S. District Judge Scott Skavdahl – an Obama appointee, no less – the answer to that question is a resounding no:

In recent years, as does the BLM here, federal agencies have increasingly relied on Chevron deference to stretch the outer limits of its “delegated” statutory authority by revising and reshaping legislation. However, Chevron involved a challenge to an agency construction of a specific statutory provision where the agency had clearly been granted regulatory authority over the activity in question. This case stands in contrast — Congress has not directed the BLM to enact regulations governing hydraulic fracturing. Indeed, Congress has expressly removed federal agency authority to regulate the activity, making its intent clear. If this Court were to accept Respondents’ and Intervenor Respondents’ argument, there would be no limit to the scope or extent of Congressionally delegated authority BLM has, regardless of topic or subject matter.

BLM, unsurprisingly, is expected to appeal the decision.

skavdahl


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