BakerHostetler today filed a request for preliminary injunction against the final rule the Bureau of Land Management (BLM) issued to regulate hydraulic fracturing on federal and Indian lands. The motion was filed in the United States District Court for the District of Wyoming on behalf of the Independent Petroleum Association of America and Western Energy Alliance. The motion details the flaws in BLM’s final rule and requests that the federal district court halt implementation until the legal challenge is resolved. BakerHostetler filed the first legal challenge to the final rule on March 20, 2015, the same day BLM announced the final rule.
While the final rule is not scheduled to take effect until June 24, 2015, independent producers are already incurring substantial compliance costs. Producers are adjusting drilling schedules, moving equipment, contracting for operational services, and training personnel. Producers anticipate that these additional costs will exceed several hundreds of millions of dollars each year. “BLM has underestimated the cost of the final rule at every phase of development,” said Mark Barron, one of the Denver-based BakerHostetler attorneys heading the litigation. “Given the magnitude of expected costs and the legal flaws of the final rule, injunctive relief is necessary to protect independent producers until the court reaches resolution.”
The motion emphasizes BLM’s failure to consider relevant evidence during the rulemaking process and to justify its action with objective and technically sound support. “BLM argues that some states with hydraulic fracturing activity lack the regulations necessary to protect federal and Indian lands, but BLM is yet to identify a single harm that the agency’s rule will prevent that state regulation isn’t preventing already,” noted Barron.
“After five years of rulemaking, BLM still has not identified a single case of hydraulic fracturing contaminating drinking water,” added Poe Leggette, Co-leader of BakerHostetler’s Energy and Shale practice team. “There is no excuse — as a matter of law or in the interest of good government — for the agency to continue to rely on unsupported assertions.”
If the final rule is implemented, the industry anticipates it will push many operators off federal lands. Operators that continue to develop on federal lands will find that their ability to use modern, productive and environmentally sensitive technologies on federal projects is restricted. “The rule will end up discouraging the very innovations we need to stay competitive in the global economy,” said Leggette. “The only thing this rule achieves is more permits, more delays, fewer jobs, and less revenue for state and federal treasuries.”