Required Regulation? Challenge to BLM repeal of New Fracking Standards

Katelyn Scott
Associate Editor
Loyola University Chicago School of Law, JD 2019

Environmental and tribal groups have historically taken important roles in implementing and enforcing regulations to protect the environment. In a recent action, environmental and tribal groups took on the Bureau of Land Management (BLM) in an attempt to quash BLM’s elimination of a rule regulating the chemicals used in fracking. Although the final rule was originally officially published and implemented in 2015,  it never went into full effect due to major challenges brought by the oil and gas industry. However, the Trump administration recently repealed the rule in its entirety, prompting a lawsuit arguing that the BLM is required to promulgate regulations as part of its mission.

Regulating Fracking

Fracking is a process used to extract oil and minerals by using pressure and a water-based mixture to hydraulically fracture (“frack”) the rock and release gases. The process has allowed companies to access inaccessible resources, but has also drawn demands for increase regulation because of the potential environmental impacts—especially to water in the areas near the wells, and the potential for creating earthquakes.

The regulations surrounding fracking vary from state to state, and federal regulations have created exemptions to many environmental statutes specifically for fracking. While some states have taken a strong stance on the need for safety and environmental safeguards for the industry,  those states whose economies rely more heavily on the industry, such as Texas, have looser standards.

2015 Regulation

It took five years and a review of more than 1.5 million comments before the final rule regarding the regulation of fracking was finally promulgated in 2015. The rule was intended to improve public awareness of the fracking process, protect water zones, ensure integrity in addressing developments in technology, and coordinate standards with multiple levels of government involved. Oil companies fracking on public lands in particular were required to disclose the chemicals they used and comply with stricter inspection criteria.

The rule was intended to control the actions of companies working on federal, public lands. Even with the rule’s minimal application, the oil and gas industry complained that the new regulations were economically burdensome. The U.S. Department of Interior, as the agency overseeing the regulation and the BLM, estimated that the new regulations would cost about $5,500 more per injection oil well.

Sierra Club et. al. v. Zinke

On January 24, 2018, environmental and tribal groups filed suit against Secretary of the Interior, Ryan Zinke. The complaint sought declaratory and injunctive relief for the repeal of a BLM regulation, claiming the action violated four different statutory grants of power: the Federal Land Policy and Management Act (FLPMA), the Mineral Leasing Act (MLA), the Indian Mineral Leasing Act, (IMLA) and the National Environmental Policy Act (NEPA).

The complainants argue that the BLM’s repeal of the rule violates its purpose under the authorizing statutes. Under the Federal Land Policy and Management Act, BLM is required to manage public lands in a way that preserves them for the habitat and recreational uses through regulation. Further, under the Mineral Leasing Act, the Secretary of Interior is required to create regulations which conserve surface resources through control. This control includes the regulation of surface activities; by removing their regulations on the activities of fracking, the plaintiffs argue they are failing to fulfill their duty. The BLM is also required to protect and work to the benefit of Indian landowners under Indian Mineral Leasing Act. Finally, National Environmental Policy Act (NEPA) requires the BLM to consider all significant aspects of environmental impact and inform the public of that impact. When an agency action has a substantial question of environmental impact, the agency is required to prepare an Environmental Impact Statement (EIS).

Complainants argue that the agency is not acting within these clear statutory drivers by repealing the regulations. The regulations are designed to mitigate harm to habitat and enjoyment of the public lands, as required under FLPMA. By allowing companies to use chemicals to extract resources from the ground, the agency is failing to protect the surface resources requiring protection under MLA. There is a direct contradiction to removing the requirements to release information on the chemicals used in fracking operations and the statutory requirements of NEPA. At no point did the BLM issue an EIS or go through notice and comment process of repealing rules as required under Section 551 of the Administrative Procedures Act.

The complaint further argues that the BLM’s repeal does not work towards the benefit of Indian landowners and their mineral rights. Since these regulations only applied to federal lands, drilling operations on Indian Reservations and tribal lands were gaining protections from these regulations. The sovereignty of the nations means that state regulatory structures do not apply to these lands, and removing the standards leaves the communities even more vulnerable.

Debate of Requirement of Regulation

There is widespread debate between environmentalists and the oil and gas industry about the effects of fracking and whether it is appropriate to place stricter regulations on such activity. Recent accidents in the oil industry, as well as a number of recently released studies, have caused for a call for more safety regulations. In December 2016, the EPA released its study on fracking, stating that it can clearly impact drinking water after previously stating in 2015 that no impacts could be seen.

The oil and gas industry is known to be a dangerous industry, and that heightened risk, along with the environmental impact, creates the necessity for regulation. The complaint against BLM draws attention not only to the impact of fracking, but also the ways in which the oil and gas industry has been able to avoid enforcement—especially with evidence that companies with reported violations have seen no penalties, only deadly accidents.

Some argue that, because of the exemptions from major protection statutes, the industry must be forced into a culture of compliance through the creation of penalties. However, as the impact increases and technology continues to advance, the industry may find itself facing more public scrutiny.

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