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Court sets aside Obama administration fracking rules for public lands

A federal judge in Wyoming has set aside new regulations for hydraulic fracturing on public lands, a victory for oil and gas producers who vehemently opposed the rules.

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A worker eats his lunch on the go at a fracking site east of Williston in this 2014 file photo. (Eric Hylden/Forum News Service)

A federal judge in Wyoming has set aside new regulations for hydraulic fracturing on public lands, a victory for oil and gas producers who vehemently opposed the rules.

The U.S. Bureau of Land Management lacked Congressional authority to set the rules that cover the practice on federal and Indian lands, U.S. District Judge Scott Skavdahl in Wyoming ruled on Tuesday.

The Interior Department's rules, issued in their final form in March 2015, required companies to provide data on chemicals used in hydraulic fracturing and to take steps to prevent leaks from oil and gas wells on federally owned land.

North Dakota’s oil industry members opposed the rules, arguing that North Dakota already had similar regulations for hydraulic fracturing and the BLM rules would only add unnecessary delays.

“Since the state of North Dakota has this process regulated and it’s taken care of in our state, it really didn’t add any value,” said Kari Cutting, vice president of the North Dakota Petroleum Council.

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Skavdahl put the rules on hold a year ago to weigh requests from energy industry groups and four states to stop them from being implemented. He issued a preliminary injunction against the rules in September and made it permanent in Tuesday's decision.

Skavdahl said the issue before the court was not whether hydraulic fracturing is good or bad, but whether Congress gave the Interior Department legal authority to regulate the practice. "It has not," he said.

"The BLM's effort to do so through the Fracking Rule is in excess of its statutory authority and contrary to law," he said.

Although the majority of minerals developed in North Dakota are privately owned or state-owned, the BLM rule would have had a major effect on the state’s oil development, said Alison Ritter, spokeswoman for the Department of Mineral Resources.

About 30 percent of Bakken oil development contains some percentage of federal minerals, which would have required additional review under the proposed rule, Ritter said.

“It would have had a significant impact on North Dakota minerals as well as just the state’s ability to regulate its rules on hydraulic fracturing,” she said.

Proponents say regulations are needed to reduce potential pollution from fracking, which involves injection at high pressure of water, sand and chemicals underground. Opponents say fracking has helped drive a boom in U.S. oil production, lowering energy costs and providing jobs.

The government’s appeal of last year's injunction is pending at the 10th U.S. Circuit Court of Appeals.

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North Dakota also was a party to the lawsuit to block the federal rules.

“North Dakota has adopted sensible fracking regulations that work, because Congress intended the states to regulate fracking,” Attorney General Wayne Stenehjem said in a news release. The state regulates fracking through the Department of Mineral Resources and the Industrial Commission, which includes Stenehjem, Gov. Jack Dalrymple and Agriculture Commissioner Doug Goehring.

Dalrymple said in a statement he believes the judge made the correct ruling.

“This was one of several attempts by the Obama Administration to bypass the U.S. Congress and implement its own laws,” Dalrymple said. “The administration also ignored state’s rights to regulate hydraulic fracturing according to the unique geological characteristics of each state.”

U.S. House Speaker Paul Ryan praised the ruling for acknowledging lawmakers' powers and protecting "the energy revolution from the heavy hand of big government.”

In a statement, Ryan said: "Only Congress can write laws. Agencies acting without authority from Congress is simply illegal."

The Independent Petroleum Association of America and the Western Energy Alliance were joined by Colorado, Wyoming, North Dakota, Utah and the Ute Indian Tribe of the Uintah and Ouray Reservation in seeking to block the rules.

"We're overjoyed with the ruling," said Kathleen Sgamma, vice president of government and public affairs at Western Energy Alliance.

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Lena Moffitt, director of the Sierra Club's Beyond Dirty Fuels campaign, said the group believed the bureau had the authority to make the rules and remained hopeful the appeals court would uphold the rule.

Representatives for the Interior Department and the White House could not be immediately reached for comment.

Forum News Service reporter Amy Dalrymple contributed to this report.

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