In the past month, state attorneys general and industry groups have brought two different legal challenges to federal regulation of hydraulic fracturing (“fracking”). The lawsuits stem from the Bureau of Land Management’s (BLM) new rules to regulate fracking on federally owned lands. The rules set specific standards for well construction and inspection, and require companies to disclose the chemicals they use on an industry-run database at FracFocus.com. Additionally, the rules mandate that companies store wastewater in storage tanks rather than open pits. The BLM has indicated that states can apply for an exemption if their regulations meet or exceed the federal rules, but has not yet provided further details on the exemption process.
Two industry groups, the Independent Petroleum Association of America and the Western Energy Alliance, immediately filed suit to block the implementation of these rules. In a short petition, the groups argue that the rule-making process was legally deficient, and that the final rules lack factual or scientific support. Additionally, the groups emphasize that the rules are ultimately unnecessary because they duplicate state standards.
Wyoming and North Dakota took a different approach to challenging the rules in a separate suit at the end of March. Instead of focusing on the rule-making process or the substance of the rules, the states argue that the BLM does not have the power to regulate water resources or underground injection. In the complaint, Wyoming and North Dakota emphasize that Congress gave exclusive authority to regulate underground injections to the EPA and the states by creating the Underground Injection Control Program (UICP). The states then note that in the Energy Policy Act of 2005, Congress expressly exempted fracking from the UICP. North Dakota and Wyoming therefore argue that the exemption from the UICP was an expression of Congressional intent to prohibit all federal regulation of fracking-related underground injection. If the states are successful under this theory, it may have sweeping implications for any other federal agencies’ future attempts to regulate fracking or wastewater disposal.
We continue to monitor developments in this evolving landscape.