Federal District Court: Feds May Not Regulate Fracking on Federal Lands

by Hannah Wiseman

June 22, 2016

In a merits opinion issued on June 21, 2016, the U.S. District Court for the District of Wyoming (Judge Skavdahl) held that the U.S. Bureau of Land Management--the agency tasked with protecting and preserving federal lands for multiple uses by the public--lacks the authority to regulate hydraulic fracturing ("fracking") on federally-owned and managed lands. Using a Chevron step 1 analysis (one standard used to review agencies' interpretation of the meaning of statutes that grant agencies authority), the court finds that "Congress has directly spoken to the issue and precluded federal agency authority to regulate hydraulic fracturing," with the exception of fracturing that uses diesel fuels. The court bases this erroneous conclusion on the Safe Drinking Water Act (SDWA)--an Act that governs Environmental Protection Agency and state authority over underground water sources. Under the SDWA, entities that inject substances underground must first obtain a permit from the EPA or a state to ensure that they will not endanger underground drinking water sources.

In 2005, Congress revised the SDWA to provide that the Act excludes non-diesel fracking from the definition of "underground injection" governed by the SDWA. Specifically, the SDWA provided, beginning in 2005: "For purposes of this part, [t]he term 'underground injection'-- . . . excludes . . . the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities" (emphasis added). Thus, as of 2005, the EPA could not regulate fracking under the SDWA. But this SDWA language--language that is only written "for the purposes" of this specific portion of the SDWA--says nothing about the other federal acts under which the EPA may or may not regulate fracturing.  Indeed, this is why the EPA has since been able to issue several fracturing regulations under the Clean Air Act. Moreover, the narrow exemption of fracturing from the SDWA says nothing about how other agencies may regulate fracturing underother acts, such as the Federal Land Policy and Management Act and Mineral Leasing Act, which govern the Bureau of Land Management's review of oil and gas activities on BLM lands. And many of the BLM's current fracking regulations--all of which the court has invalidated through its holding--have nothing to do with underground injection, the topic of the SDWA.  Rather, they address subjects such as requiring oil and gas operators to use tanks, rather than surface pits, to hold fracturing wastes.

The court's determination that Congress under the SDWA has "directly spoken" to the issue of whether the BLM may regulate fracking on federal lands is farfetched and lacks any reasonable legal basis. After all, how can an Act that applies to the EPA, and primarily to underground injection activities on private lands, "directly," or even impliedly, remove the BLM's authority to regulate fracking wastes--and related activities such as the surface handling of fracking wastes--on federal lands? Indeed, in the legislative history of the SDWA, Congress made clear that in passing the Act it did not intend to "limit the authority" of the BLM's predecessor agency.

The court's failure to find any case on point--and its twisting of the meaning of one of my old law review articles to support its Chevron holding--demonstrate the artificial contortions required to reach this poorly-reasoned holding. Indeed, in my article cited by the court, I indicate in a footnote that despite the exemption of fracturing under the SDWA, other federal acts can apply to ...

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