The Case: The Southern Ute Indian Tribe (Tribe) filed suit on June 18, 2015 in the United States District Court for the District of Colorado1 against the Department of the Interior challenging the Department's new hydraulic fracturing rule for federal and Indian lands (BLM Frac Rule).2 The suit alleges that the BLM Frac Rule conflicts with the Indian Mineral Leasing Act (IMLA), the Indian Mineral Development Act (IMDA), and Bureau of Indian Affairs (BIA) regulations, and asks the court to vacate those parts of the rule that violate the IMLA and frustrate the Tribe's authority over its own lands. "The BLM was overreaching when it enacted this rule for tribal lands. Tribal lands should be treated differently than federal lands," said Clement J. Frost, the Tribe's Chairman.3 The suit contends that the new rule imposes unwarranted regulatory burdens that delay energy development on the Reservation and impair the Tribe's ability to provide services and benefits to the tribal membership. The Tribe's filing follows the earlier suit filed by industry and state opponents of BLM's Frac Rule in the U.S. District Court for the District of Wyoming. See Independent Petroleum Association of America v. Jewell.4Orders entered in that case have stayed the effective date of the new rule.
The Tribe's Contentions: The Tribe has adopted its own legislative enactment to address hydraulic fracturing, the Southern Ute Indian Tribe Hydraulic Fracturing and Chemical Disclosure Regulations. Its federal court complaint cites a BIA regulation, 25 C.F.R. § 211.29, which authorizes a tribe organized under the Indian Reorganization Act of 1934 (IRA)5 to supersede federal leasing regulations by enactment of tribal laws. The Tribe is organized under the IRA. Contending that "[t]he Tribe's regulations provide more protection for aquifers with less bureaucratic morass," the Tribe argues that the BLM Frac Rule, if applicable to the Tribe's oil and gas development, would disadvantage the Tribe's lands as compared with neighboring fee lands. Consequently, the Tribe contends, the BLM Frac Rule cannot be applied to oil and gas leases of tribal lands.
Litigation Progressing: Briefing on the issues framed by the Tribe's amended complaint began on July 23, 2015 and is progressing. The case presents the important question whether IRA tribes can avoid imposition of the controversial BLM Frac Rule by adopting tribal codes to regulate hydraulic fracturing.