Karen Kidd Jul. 12, 2016, 9:58am


CASPER, Wyo. (Legal Newsline) – The Ute Indian Tribe's victory in federal court earlier this month fending off Bureau of Land Management-imposed fracking rules included a number of surprises, an environmental attorney said during a recent interview.

"Anytime a federal court strikes down a federal regulation, that’s surprising," Pacific Legal Foundation environmental attorney Jonathan Wood told Legal Newsline. "The strong presumption that courts will defer to federal agencies on everything, including their interpretations of the limits statutes put on their own authority, make this a relatively rare occurrence."

Wood referred to recent Supreme Court rulings has that have cast doubt on prior assumed deference to administrative agencies and said the Ute Indian Tribe's case may indicate those doubts are filtering down to lower other courts.

"The decision also charts some new legal ground," Wood said.

In a ruling handed down June 21, the U.S. District Court for the District of Wyoming found in factor of the Ute Indian Tribe of the Uintah and Ouray Reservation by permanently enjoining the BLM from imposing fracking rules on the tribe and its industry partners.

"Given Congress' enactment of the EP (Energy Policy) Act of 2005, to nonetheless conclude that Congress implicitly delegated BLM authority to regulate hydraulic fracturing lacks common sense," the ruling written by Judge Scott W. Skavdahl said. "Congress' inability or unwillingness to pass a law desired by the executive branch does not default authority to the executive branch to act independently, regardless of whether hydraulic fracturing is good or bad for the environment or the Citizens of the United States."

Federal agencies seem no longer able to find a loophole from Congressional prohibitions in this ruling, Wood said.

"I’m not aware of any court applying this rule beyond the particular agency that Congress was speaking to," he said. "But, here, the court invalidated one agency’s regulations, BLM, because Congress forbade a different agency, EPA, from imposing regulations on the same issue for the same purpose.

"This makes intuitive sense. When Congress says that an agency shouldn’t take some action for a particular reason, it’s probably most concerned with the action and the reason, not the particular agency. Since these agencies ultimately answer to the same person, the president, it’s reasonable to conclude that Congress would have the same concerns about the BLM regulation as it would about an identical EPA regulation, which would clearly be illegal."

The Wyoming case initially was filed by Wyoming and North Dakota, along with several energy-producing associations. The Ute Indian Tribe defended its own interests, claiming the negative impact the BLM's rules would have on the tribe's economy.

For its part, the BLM claimed the Indian Minerals Leasing Act of 1938 and the Indian Minerals Development Act of 1982 provided its authority to impose fracking regulations on Indian lands. The District Court disagreed, however, claiming neither act granted the BLM that authority.

The BLM generally takes an interest in lands in which the federal government has even minor ownership, Wood said.

"For instance, in North Dakota, the federal government owns the mineral rights to many lands, while the state or private parties own everything else," he said. "The state estimates that this is the situation for 30 percent of the oil and gas producing areas in North Dakota. The federal government’s minor ownership interest is enough to trigger BLM’s fracking regulation."

The Wyoming court ruled as it did because allowing the BLM to regulate fracking would potentially impact groundwater, Wood said. The court found those regulations make no sense in light of Congress’ decision forbidding the EPA from regulating the impacts under the federal statute specifically aimed at protecting water supplies, he said.

"The statutes that BLM was relying upon had nothing to do directly with this issue," Wood said. "Instead, they were general statutes governing regulation of federal land. Courts have a long tradition of reading federal statutes together so that they make sense and don’t frustrate each other.

"A corollary of this is that, when Congress specifically forbids agencies from doing something under a statute specifically aimed at that issue, they can’t claim a loophole by doing the forbidden thing under a different statute with a more general subject matter."

Should the court's decision survive appeal, the fracking industry will no longer face duplicative federal and state regulations, Wood said.

"When Congress adopted the Energy Policy Act of 2005, it put states in the driver’s seat for regulating fracking," he said. "The statute forbids EPA from regulating fracking’s potential groundwater impacts. As a result, the industry only has to worry about complying with one level of regulation and permitting (state) rather than two (state and federal)."

The ruling also means regulations will be uniform throughout each state, Wood said.

 "BLM’s regulation would have undermined uniformity," he said. "Under it, the fracking industry would face a more complicated regulatory regime for lands subject to federal regulation. There, it would not only have to navigate state regulation and permitting, but would also have to do the same with the federal government, an oft expensive and time consuming process. The situation is made even more complicated by the fact that land in the west can be a confusing checkerboard of private, state, and federal lands."

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