[co-author: Jenny Suh - Summer Associate]

Since our last update on federal litigation in Wyoming challenging the Bureau of Land Management’s (BLM) final rule to regulate hydraulic fracturing on public lands, the flurry of activity continues in advance of the June 23 preliminary injunction hearing. We’ve summarized several key filings below:

BLM’s Opposition To Preliminary Injunction

On June 1, the BLM filed its brief opposing the preliminary injunction motion entered by the two industry group plaintiffs—the Independent Petroleum Association of America and the Western Energy Alliance. The BLM primarily focuses on two arguments.

First, the BLM contends the industry groups are unlikely to succeed on the merits of their litigation against the rule, and, as a result, a preliminary injunction is unwarranted. In support of its position, the BLM argues:

• It developed the final rule in accordance with appropriate statutes, including the Federal Land Policy and Management Act, which grants the BLM authority to administer public lands and resources.
• The industry can comply with certification requirements, such as the temporary recovered fluid storage requirement, by invoking trade secret protection under the BLM’s existing regulations.
• The final rule is justified and necessary to address modern technological advances and changes in hydraulic fracturing industry.
• The industry groups failed to demonstrate irreparable harm, since there is no imminent risk of disclosure of confidential information.

The BLM also maintained that the public interest would not favor a preliminary injunction, because entering one would deny the BLM tools to prevent environmental harm, including putative groundwater contamination. And, according to the BLM’s arguments, an injunction would detrimentally affect the orderly administration of federal energy policy, causing confusion among the public and the industry as to whether and when its final fracking rule would become effective.

North Dakota’s Separate Preliminary Injunction Motion

As reported earlier, the industry group plaintiffs filed for preliminary injunction, as did the states of Wyoming and Colorado. On June 4, the state of North Dakota likewise filed its own separate preliminary injunction motion.

Specifically, North Dakota contends that the BLM’s final rule will cause it irreparable harm by depriving the state of sovereign authority and divesting the state’s budget of an estimated $300 million per year. This possible irreversible economic damage tips the scales in favor of a preliminary injunction, according to North Dakota, particularly because its existing state laws and regulations already adequately protect groundwater and other resources, making the stated objective of the BLM’s final rule superfluous.

Echoing arguments by the states of Wyoming and Colorado, North Dakota also contends that the Safe Drinking Water Act (SDWA) gave states the exclusive authority to regulate hydraulic fracturing practices within their borders and prohibits federal regulatory interference, including the BLM’s final rule. And a preliminary injunction would favor the public interest by preventing needless regulatory uncertainty. To that end, North Dakota asked the court to preserve the status quo by entering an order enjoining the BLM’s final rule from taking effect until the litigation is resolved.

Opposition To Preliminary Injunction By Intervening Environmental Groups

Finally, following their unopposed motion to intervene, the Sierra Club and several other environmental groups submitted their own brief opposing application of a preliminary injunction to halt the BLM’s final fracking rule. Among their arguments, the environmental groups contend the industry will not suffer harm from complying with the final rule, because (1) they estimate that compliance costs will be less than one fourth of one percent of drilling costs; and (2) the BLM has a well-established procedure to protect trade secrets, which would include confidential information related to fracking fluids. The environmental groups also argue that the public interest favors permitting the BLM’s final rule to take effect, since new wells drilled with outdated methods while litigation is pending will result in continued soil and groundwater contamination, chemical spills and other accidents.

Mineral Law Blog will continue to monitor and report on these legal developments as they progress.