The 10th Circuit Court of Appeals ruled Thursday that the Obama administration was within its rights when the Bureau of Land Management issued a 2015 rule to modernize fracking regulations on public lands.
The so-called Fracking Rule, which increased safety specifications on oil and gas wells and mandated chemical disclosures, was challenged by two states — Colorado and Montana — as well as the American Petroleum Institute.
In June 2016, a lower court ruled that the BLM “acted beyond its statutory authority.” In part, the lower court found that no law specifically allows the BLM to regulate underground injections. The court also found that even if the BLM could regulate fracking, the so-called “Halliburton Loophole,” part of the 2005 update to the Safe Drinking Water Act, “precluded all federal regulation of non-diesel fracking.” The 10th Circuit Court of Appeals disagreed and vacated the 2016 decision.
But the 10th Circuit Court decision comes as the rule is in the process of being rescinded under the new administration. President Donald Trump in January issued an executive order tasking all agencies to find ways to reduce regulations, and in March he issued another order in favor of extracting as much fossil fuels from public lands as possible.
The government had asked the court to “hold the matter in abeyance” — essentially, to not issue a decision until the BLM rewrote the rule. In July, the BLM published a notice in the Federal Register, formally beginning the process of revoking the rule. The agency was not able to tell the court how long that process would take. The public comment period ends Monday.
“We acknowledge the difficult position in which the BLM finds itself by first filing an appeal to challenge the district court’s invalidation of the Fracking Regulation, only now to ask this court to withhold ruling on its appeal pending final resolution of the BLM’s action to rescind the very regulation it had initially sought to uphold and enforce,” the court noted.
Even so, the rule is expected to be rescinded as soon as the Trump administration can effectively do so. In its decision, the court discusses whether it even needed to consider the lower court ruling, given that throwing it out will have little to no actual effect. The court came down on the side of righting what they saw as a wrong decision and opted to vacate the ruling.
In doing so, they shot down two arguments that often come up when debating regulations: whether the government has the authority to regulate, and whether regulating is going to cost too much.
In this case, the BLM was not conducting “government overreach.” Likewise, analysis in the case suggests that the rule is not going to be too much of a burden.
While the American Petroleum Institute claimed the rule “imposes new costs and delays on energy development,” the court documents say that “the estimated cost to comply” is less than a quarter of a percent of the cost of drilling a well.
According to documents in the case, 90 percent of oil and gas wells on federal land use fracking techniques.
The regulation — now protected by the courts but in the process of repeal by the Trump administration — would have increased disclosure of chemicals used in fracking, modernized standards for wellbore construction, and overseen the source and disposal of water in fracking. Fracking, also known as hydraulic fracturing, is a method of extracting oil and gas from shale deposits below ground. During fracking, large amounts of chemical- and sand-laced water are injected a high pressure into rock, fracturing it and allowing trapped oil and gas to escape. The practice, including water disposal, has been tied to water contamination, earthquakes, and methane leaks.