Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

State v. United States Department of Interior

United States District Court, D. Wyoming

June 21, 2016

STATE OF WYOMING, STATE OF COLORADO, Petitioners,
v.
UNITED STATES DEPARTMENT OF THE INTERIOR; SALLY JEWELL, in her official capacity as Secretary of the Interior; UNITED STATES BUREAU OF LAND MANAGEMENT; and NEIL KORNZE, in his official capacity as Director of the Bureau of Land Management, Respondents, STATE OF NORTH DAKOTA, STATE OF UTAH, and UTE INDIAN TRIBE, Intervenor-Petitioners, SIERRA CLUB, EARTHWORKS, WESTERN RESOURCE ADVOCATES, CONSERVATION COLOARDO EDUCATION FUND, THE WILDERNESS SOCIETY, and SOUTHERN UTAH WILDERNESS ALLIANCE, Intervenor-Respondents. INDEPENDENT PETROLEUM ASSOCIATION OF AMERICA, and WESTERN ENERGY ALLIANCE, Petitioners,
v.
SALLY JEWELL, in her official capacity as Secretary of the United States Department of the Interior; and BUREAU OF LAND MANAGEMENT, Respondents.

          ORDER ON PETITIONS FOR REVIEW OF FINAL AGENCY ACTION

          Scott W. Skavdahl United States District Judge

         This matter comes before the Court on the Petitions for Review of Final Agency Action filed separately in each of these consolidated actions, challenging the Bureau of Land Management's issuance of regulations applying to hydraulic fracturing on federal and Indian lands. The Court, having considered the briefs and materials submitted in support of the petitions and the oppositions thereto, including the Administrative Record, and being otherwise fully advised, FINDS that the Bureau of Land Management lacked Congressional authority to promulgate the regulations.

         Our Constitutional form of government is built upon three separate but equal branches of government: the legislative branch (Congress) which makes the laws; the executive branch (President) which enforces the laws; and the judicial branch (Courts) which interpret the laws. In this case, the threshold issue before this Court is a Constitutional one-has Congress (the legislative branch) delegated its legal authority to the Department of Interior to regulate hydraulic fracturing. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). The issue before this Court is not whether hydraulic fracturing is good or bad for the environment or the citizens of the United States. "Regardless of how serious the problem an administrative agency seeks to address; ... it may not exercise its authority 'in a manner that is inconsistent with administrative structure that Congress enacted into law."' FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 125 (2000) (quoting ETSI Pipeline Project v. Missouri, 484 U.S. 495, 517 (1988)). The Constitutional role of this Court is to interpret the applicable statutory enactments and determine whether Congress has delegated to the Department of Interior legal authority to regulate hydraulic fracturing. It has not.

         Background

         On March 26, 2015, the Bureau of Land Management ("BLM") issued the final version of its regulations applying to hydraulic fracturing on federal and Indian lands. 80 Fed. Reg. 16, 128-16, 222 (Mar. 26, 2015) ('Tracking Rule"). The Fracking Rule's focus is on three aspects of oil and gas development - wellbore construction, chemical disclosures, and water management (id. at 16, 128 & 16, 129) - each of which is subject to comprehensive regulations under existing federal and/or state law. The rule was scheduled to take effect on June 24, 2015. Following a hearing on the Petitioners' preliminary injunction motions, this Court postponed the effective date of the Fracking Rule pending the BLM's lodging of the Administrative Record ("A.R.") and the Court's ruling on the preliminary injunction motions. (See ECF No. 97.)[1] Ultimately the Court granted the motions, preliminarily enjoining the BLM from enforcing the Fracking Rule. (ECF No. 130.) The Court now fully considers the merits of the Petitioners' challenges.

         For the better part of the last decade, oil and natural gas production from domestic wells has increased steadily. Most of this increased production has come through the application of the well stimulation technique known as hydraulic fracturing (or "fracking") - the procedure by which oil and gas producers inject water, sand, and certain chemicals into tight-rock formations (typically shale) to create fissures in the rock and allow oil and gas to escape for collection in a well.[2] See 80 Fed. Reg. at 16, 131 (estimating that ninety percent of new wells drilled on federal lands in 2013 were stimulated using hydraulic fracturing techniques). Hydraulic fracturing has been used to stimulate wells in the United States for at least 60 years - traditionally in conventional limestone and sandstone reservoirs - and meaningful attempts to use the technique to extract hydrocarbons from shale date back to at least the 1970s. See U.S. Dep't OF Energy, How is Shale Gas Produced?[3] "More recently, hydraulic fracturing has been coupled with relatively new horizontal drilling technology in larger-scale operations that have allowed greatly increased access to shale oil and gas resources across the country, sometimes in areas that have not previously or recently experienced significant oil and gas development." 80 Fed. Reg. 16, 128.

         Purportedly in response to "public concern about whether fracturing can lead to or cause the contamination of underground water sources, " and "increased calls for stronger regulation and safety protocols, " the BLM undertook rulemaking to implement "additional regulatory effort and oversight" of this practice. Id. at 16, 128 & 16, 131. In May of 2012, the BLM issued proposed rules "to regulate hydraulic fracturing on public land and Indian land." 77 Fed. Reg. 27, 691 (May 11, 2012). The stated focus of the rules was to: (i) provide disclosure to the public of chemicals used in hydraulic fracturing; (ii) strengthen regulations related to well-bore integrity; and (iii) address issues related to water produced during oil and gas operations. Id. The BLM reports it received approximately 177, 000 public comments on the initial proposed rules "from individuals, Federal and state governments and agencies, interest groups, and industry representatives." 80 Fed. Reg. at 16, 131.

         Just over a year later, the BLM issued revised proposed rules, representing that the agency has "used the comments on [the May 11, 2012 draft proposed rules] to make improvements" to the agency's proposal. 78 Fed. Reg. 31, 636 (May 24, 2013). Key changes included an expanded set of cement evaluation tools to help ensure protection and isolation of usable water zones and a revised process for how operators could report information about chemicals they claim to be protected as trade secrets. Id. at 31, 636 & 31, 637. The BLM also expressed its intent to "work with States and tribes to establish formal agreements that will leverage the strengths of partnerships, and reduce duplication of efforts for agencies and operators, particularly in implementing the revised proposed rule as consistently as possible with State or tribal regulations." Id. at 31, 637. The BLM reportedly received over 1.35 million comments on the supplemental proposed rule. 80 Fed. Reg. at 16, 131.

         The BLM ultimately published its final rule regulating hydraulic fracturing on federal and Indian lands on March 26, 2015. The BLM determined the Fracking Rule fulfills the goals of the initial proposed rules: "[t]o ensure that wells are properly constructed to protect water supplies, to make certain that the fluids that flow back to the surface as a result of hydraulic fracturing operations are managed in an environmentally responsible way, and to provide public disclosure of the chemicals used in hydraulic fracturing fluids." Id. at 16, 128.

         The Industry Petitioners (Independent Petroleum Association of America and Western Energy Alliance) and the States of Wyoming and Colorado filed separate Petitions for Review of Final Agency Action on March 20th and 26th, 2015, respectively, seeking judicial review of the Fracking Rule pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. The States of North Dakota and Utah, and the Ute Indian Tribe of the Uintah and Ouray Reservation, later intervened in the States' action as Petitioners and various environmental groups intervened as Respondents, and the Court granted the parties' motion to consolidate the two separate actions.

         Petitioners contend the Fracking Rule should be set aside because it is arbitrary, not in accordance with law, and in excess of the BLM's statutory jurisdiction and authority. See 5 U.S.C. § 706(2)(A) & (C). The Ute Indian Tribe additionally contends the Fracking Rule is contrary to the Federal trust obligation to Indian tribes.

         Standard of Review

         The APA's scope of review provisions relevant here are:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall--* * *
(2) hold unlawful and set aside agency action, findings, and conclusions found to be~
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
* * *
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
* * *
In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.

5 U.S.C. § 706.

         Judicial review of agency action is governed by the standards set forth in § 706 of the APA, requiring the reviewing court to engage in a "substantial inquiry." Olenhouse v. Commodity Credit Corp., 42 F.3d 1560, 1573-74 (10th Cir. 1994) (citing Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971)). While an agency's decision is entitled to a "presumption of regularity, " the presumption does not shield the agency from a "thorough, probing, in-depth review." Id. at 1574. "[T]he essential function of judicial review is a determination of (1) whether the agency acted within the scope of its authority, (2) whether the agency complied with prescribed procedures, and (3) whether the action is otherwise arbitrary, capricious or an abuse of discretion." Id. "Determination of whether the agency acted within the scope of its authority requires a delineation of the scope of the agency's authority and discretion, and consideration of whether on the facts, the agency's action can reasonably be said to be within that range." Id.

         Discussion

         "It is axiomatic that an administrative agency's power to promulgate legislative regulations is limited to the authority delegated by Congress." Bowen v. Georgetown Univ. Hosp.,488 U.S. 204, 208 (1988). "Regardless of how serious the problem an administrative agency seeks to address, [] it may not exercise its authority 'in a manner that is inconsistent with the administrative structure that Congress enacted into law.'" Brown & Williamson Tobacco Corp., 529 U.S. at 125. Accordingly, an "essential function" of a court's review under the APA is to determine "whether an agency acted ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.