Energy Team Defeats Hydraulic Fracturing Rule

News / June 22, 2016

A team of BakerHostetler energy attorneys won a hard-fought battle in a high-profile case when U.S. District Judge Scott Skavdahl ruled on June 21, 2016, that the Bureau of Land Management exceeded its authority when it issued a rule governing hydraulic fracturing on federal and Native American lands last year. Members of the team included Partners Mark Barron and Poe Leggette, and Associate Alex Obrecht.

The BLM issued the final rule in March 2015, and immediately following, the firm filed a lawsuit on behalf the Independent Petroleum Association of America and Western Energy Alliance, the two most prominent national trade associations representing independent oil and gas producers. The industry groups asserted that the rule was substantively meritless and the BLM lacked congressional authority to issue the rule. The groups also maintained the new regulations would impose administrative impediments that would complicate and frustrate oil and gas production on federal lands. The filing of the lawsuit made waves in the national media and was reported in dozens of industry and mainstream media outlets.

Four states and one Indian tribe subsequently joined the suit opposing the rule. In September 2015, Judge Skavdahl issued a temporary injunction blocking implementation of the rule pending the outcome of the litigation. Yesterday, Judge Skavdahl axed the rule, finding that Congress never directed the BLM to enact regulations governing hydraulic fracturing.

Judge Skavdahl wrote, “Indeed, Congress has expressly removed federal agency authority to regulate the activity, making its intent clear. If this court were to accept [the BLM and environmental groups'] argument, there would be no limit to the scope or extent of Congressionally delegated authority BLM has, regardless of topic or subject matter.”

“From the beginning, the hydraulic fracturing rule has been a solution in search of a problem,” Barron observed. “Despite independent producers’ extraordinary record of safety and environmental stewardship, BLM attempted to promulgate a rule that imposed needless costs on America’s small businesses and public treasuries, without any commensurate environmental benefit. We are pleased that the district court recognized such a rule could not be implemented within the bounds of BLM’s statutory authority.”

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