In an order addressing hydraulic fracturing (fracking) on federal lands, the U.S. District Court for the Northern District of California ruled that the Bureau of Land Management (BLM) violated the National Environmental Policy Act (NEPA) by improperly issuing four oil and gas leases in Monterey and Fresno counties without addressing the environmental impacts of this controversial extraction technique.

BLM manages federal onshore oil and gas resources, which includes the Monterey Shale Formation. This is a sedimentary rock formation that is estimated to contain more than 15 billion barrels of oil -- 64 percent of the nation’s total shale oil -- most of which is only accessible through fracking extraction. In September 2011, after conducting an environmental assessment of the impacts of the lease or sale of land within the Monterey Shale Formation, BLM executed four leases for approximately 2,700 acres. Subsequently, environmental groups brought suit to enjoin the leases on the grounds that they were executed in violation of NEPA (among other statutes).

In Center for Biological Diversity v. Bureau of Land Management, the court found that BLM unreasonably relied on a single-well development scenario in its environmental assessment of the four oil and gas leases. The court determined that the single-well scenario did not contain an adequate analysis of the development impacts associated with the combination of horizontal drilling and fracking. Accordingly, the court ruled that BLM’s finding of no significant impact and decision not to prepare an environmental impact statement were incorrect as a matter of law.

Significantly, in arriving at its decision the court rejected the argument that BLM did not have jurisdiction over fracking issues and therefore was excused from looking at them, and instead found that NEPA required BLM to analyze such impacts. This is notable because fracking operations have frequently been exempted from the nation’s environmental laws, including, for example, the Clean Water Act. This decision, if followed by other courts, confirms that fracking operations are still subject to the analysis, disclosure and mitigation requirements of NEPA at a minimum, and may provide a significant means for fracking opponents to challenge such projects on federal lands.

For further information on the effects of this order, please contact Environmental Law & Natural Resources attorneys Fernando Avila, Lucas Quass or your BB&K attorney.