Last week, the Honorable Judge Scott W. Skavdahl of the District Court for the District of Wyoming issued a preliminary injunction blocking the Bureau of Land Management’s rules governing hydraulic fracturing (“fracking”) on federal and tribal lands.  As we previously reported, tribal, state, and industry filed lawsuits against the BLM’s new rules, and then moved for a preliminary injunction to block the rules from taking effect while the lawsuits are pending.  The plaintiffs include the states Wyoming, Colorado, North Dakota, and Utah; industry groups the Independent Petroleum Association of America and the Western Energy Alliance; and the Ute Indian Tribe, which has a 4.5 million acre reservation in northeastern Utah.

In the underlying lawsuits, the states argued that Congress did not empower the BLM to regulate water resources or underground injection.  They asserted that Congress gave exclusive authority to regulate underground injections to the EPA and the states by creating the Underground Injection Control Program (UICP).  The states then noted that in the Energy Policy Act of 2005, Congress expressly exempted fracking from the UICP. Therefore, they argued that the exemption from the UICP was an expression of Congressional intent to prohibit all federal regulation of fracking-related underground injection.

Taking a different approach, the plaintiff industry groups argued that the rule-making process was legally deficient, and that the final rules lack factual or scientific support.  Additionally, the groups claimed that the rules are ultimately unnecessary because they duplicate state standards.  Meanwhile, the Ute Indian Tribe maintained that the BLM’s rule is not consistent with the federal government’s trust obligation to the tribe.

After briefing and oral argument on the preliminary injunction, the court found merit in the plaintiffs’ arguments, ruling that they were likely to succeed on the merits of their case in the underlying action. In particular, the judge emphasized that the agency lacks authority to promulgate the regulations, and the rules themselves lack necessary evidentiary support.  Based on an extensive review of the governing statutes and regulations, Judge Skavdahl determined that Congress has “precluded federal agency authority to regulate hydraulic fracturing not involving the use of diesel fuels.” He observed that  “[i]t seems the BLM is attempting to do an end-run around” the Energy Policy Act of 2005, and admonished that “regulation of an activity must be by Congressional authority, not administrative fiat.”

Further, the judge criticized the rules’ lack of scientific basis.  He determined that the “BLM has neither substantiated the existence of a problem this rule is meant to address, identified a gap in existing regulations the final rule will fill, nor described how the final rule will achieve its stated objectives.”  Judge Skavdahl noted that even if potential impacts “warrant further study,” speculation alone “cannot justify comprehensive rulemaking.”

Finally, the court agreed that the BLM had not met its obligation to consult with the Ute Tribe on a “government-to-government basis in accordance with its own policies and procedures” before formulating and issuing the rules. Although the agency held consultation meetings with tribal representatives that were akin to its outreach to the general public, Judge Skavdahl found that they fell short of the “extra, meaningful efforts to involve tribes in the decision making process” that the Department of the Interior requires.

Upon determining that the plaintiffs were likely to succeed on the merits of the underlying case, Judge Skavdahl found that absent a preliminary injunction, they were likely to suffer irreparable harm from the implementation of the BLM’s rules. According to his analysis, the rules would both infringe on the sovereign authority of the states and tribes, and cause economic losses to all the plaintiffs. He likewise found that the balance of equities favors the plaintiffs, and that an injunction is in the public interest. Based on all of these factors, he enjoined the BLM from enforcing its fracking rules while the underlying lawsuit is ongoing.