Federal judge strikes down Obama’s effort to regulate fracking

A federal judge struck down the Obama administration’s signature effort to regulate hydraulic fracturing on public lands, putting another of the president’s environmental initiatives in legal limbo months before he leaves office.

The ruling, issued by Wyoming-based District Court Judge Scott W. Skavdahl late Tuesday, blocks the Interior Department’s Bureau of Land Management from enforcing a 2015 rule that set detailed standards for the construction of oil and gas wells drilled into some 700 million acres of federal land. While the new ruling is almost certain to be appealed, it follows similar setbacks for other pieces of President Barack Obama’s environmental legacy, including a Supreme Court stay of the Clean Power Plan that forces states to slash carbon dioxide emissions from power plants.

The decision also presages a tough path ahead for another regulation still on the horizon: a Bureau of Land Management proposal to block energy companies from venting or burning natural gas from wells burrowed into public land.

The Interior Department in a emailed statement called the ruling "unfortunate," because "it prevents regulators from using 21st century standards to ensure that oil and gas operations are conducted safely and responsibly on public and tribal lands."

The regulation has never gone into force, amid a legal challenge from oil industry groups and four states — Colorado, North Dakota, Utah and Wyoming — that argued the measure duplicated local drilling requirements and boosted the cost of extracting oil and gas from federal lands.

On Tuesday, Skavdahl said the fracking rule exceeded the Bureau of Land Management’s powers.

The legal question is “not whether hydraulic fracturing is good or bad for the environment," Skavdahl said, but whether Congress gave the Interior Department the power to regulate it.

“Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing," Skavdahl wrote. "The BLM’s effort to do so through the fracking rule is in excess of its statutory authority and contrary to law."

Skavdahl used similar reasoning in putting a temporary hold on the measure last year. His Tuesday decision didn’t reach some of the legal arguments raised by the Independent Petroleum Association of America, the Western Energy Alliance and other challengers who objected to the rule.

Independent Petroleum Association of America spokesman Neal Kirby said the decision reaffirms the group’s view that "states are — and have for over 60 years been — in the best position to safely regulate hydraulic fracturing."

Environmentalists who supported the rule said it’s essential to safeguard water supplies and neighboring communities as energy companies increasingly use hydraulic fracturing to extract oil and gas from wells nationwide. The technique involves pumping sand, water and chemicals underground to free oil and gas from the pores of dense rock formations.

In a brief filed with the court, environmental groups argued that the mandates wouldn’t cost much — about one fourth of one percent of the cost of drilling each new well — and in exchange would limit the risk of groundwater contamination, chemical spills, wildlife deaths and other accidents.

“While there is no way to ever make fracking safe, the oil and gas industry has repeatedly proven that it needs more standards to keep the public safe from the dangers of fossil fuels, not less," said Lena Moffitt, director of the Sierra Club’s Beyond Dirty Fuels campaign.

Some court rulings on other Obama administration environmental regulations have directed federal agencies to tweak the measures or justify them anew.

But because Skavdahl’s decision went to the heart of the Interior Department’s authority, "there’s nothing to remand, no do-over," said Kathleen Sgamma, vice president of government and public affairs at the Western Energy Alliance.

The fracking rule would have forced companies to disclose the chemicals they pump underground and seal off waste water in storage tanks. Although it would apply only to acreage under the BLM’s control, supporters argued it set a model for states to follow as they regulate drilling on private land.

The Bureau of Land Management faces similar questions about its authority as it moves to block companies from burning natural gas or sending it unchecked into the atmosphere as a less-valuable byproduct of crude at oil wells on federal land. The agency proposed new limits on that practice of venting and flaring in January, and has been aiming to make them final later this year, even as the EPA separately moves to throttle the release of methane from oil and gas sites nationwide.

"BLM is extremely vulnerable as it overreaches well beyond its public lands mandate and into EPA’s jurisdiction," Sgamma said by email. "With the venting and flaring rule, BLM is attempting to assert Clean Air Act authority without following any of the constraints of the Clean Air Act. "

The cases are State of Wyoming v. U.S. Department of the Interior, 15-cv-43, U.S. District Court, District of Wyoming (Casper) and Independent Petroleum Association of America v. Jewell, 15-cv-41, U.S. District Court, District of Wyoming (Casper).