A federal appeals court in Denver dismissed six environmental organizations' appeal of a district court's decision invalidating the US Bureau of Land Management's regulation of hydraulic fracturing at oil and gas operations on onshore public lands. But the US 10th Circuit Court of Appeals also vacated the lower court's ruling in the Sept. 21 decision and dismissed the appeal without prejudice, leading at least one environmental group to say that the decision affirmed BLM's authority to regulate fracing.
The presidents of the Independent Petroleum Association of America in Washington and the Western Energy Alliance in Denver separately applauded the court's decision to dismiss the appeal, which was pending as a new US president was elected and his administration began to rescind BLM's fracing regulation.
"Given these changed and changing circumstances, we conclude these appeals are prudentially unripe. As a result, we dismiss these appeals and remand with directions to vacate the district court's opinion and dismiss the action without prejudice," Appeals Court Judge Mary Beck Briscoe wrote in the decision.
IPAA and WEA originally sued to overturn the BLM final fracing rule on Mar. 20, 2015. Judge Scott W. Skavdahl of US District Court for Wyoming set the regulation aside more than a year later after finding the agency did not have the necessary congressional authority to impose it (OGJ Online, June 22, 2016).
"Today's court decision confirms what IPAA has advocated all along: Dismissing the appeal would protect independent producers from the uncertainty of whether it was necessary to comply with regulations that are certain to be revoked," IPAA Pres. Barry Russell said. "All three judges ruled unanimously that it would be a waste of judicial resources to proceed with this case."
Independent producers were engaged with the US Department of the Interior on its proposal for BLM to regulate fracing and repeatedly shared their concerns with the Obama administration at every step of the rulemaking process and in numerous follow-up meetings with federal regulators, he noted.
"We're pleased that after today, IPAA and [WEA] are even closer to finally putting BLM's ill-conceived fracing rule to bed," WEA Pres. Kathleen Sgamma said in Denver.
Addressing technicalities
"As with the royalty valuation rule that was recently completely rescinded, there are some technicalities to work through in the short term, but just as the court recognizes that it is not worthwhile to expend judicial resources on a rule that is being overturned, it is clear that implementing the rule in the short term is likewise a waste of industry and government resources," she said.
Bruce Baizel, energy program director at Earthworks, one of the groups that filed the appeal, took the opposite view. "This decision is two victories in one. It means BLM can start enforcing a rule to protect water, public health, and communities threatened and harmed by fracing on public lands," he said following the decision.
"The second victory, no less important than the first, is that in the eyes of the court and the eyes of the Trump administration, the public's land managers have the authority to regulate drilling on the lands the public owns," Baizel said.
Sgamma strongly disagreed with that interpretation. "In fact, the appeals court dismissed the environmental groups' appeal specifically because BLM is in the process of redoing the rule, and therefore addressing the merits of the appeal would be a waste of judicial resources," she said.
Vacating the lower court's decision was procedural and not based on the merits of the ruling, meaning that the appeals court did not rule that the district court was wrong and has not reversed or even criticized the lower court's ruling, Sgamma said.
"Furthermore, the 10th Circuit did not feel there is any environmental urgency requiring it to address the merits of the case. [It] has no reservations about allowing oil and gas development to continue on federal and Indian lands under the current regulatory status quo, without the BLM fracing rule," she said. "There will be some legal maneuvering between now and when the Circuit Court's ruling goes into effect, but the bottom line is the BLM fracing rule is not in effect."
