Hundreds of millions of dollars could be lost to North Dakota, depending upon the outcome of a hearing on whether to delay implementation of the federal Bureau of Land Management's (BLM) hydraulic fracturing rule in the U.S. District Court for the District of Wyoming later this month, state Attorney General Wayne Stenehjem said. He plans to attend the court proceeding in Casper, WY, June 23.

Earlier this year, North Dakota joined Colorado and Wyoming to challenge the now-final BLM fracking rule on public and tribal lands (see Shale Daily, April 28), following similar lawsuits from the Independent Petroleum Association of America and the Western Energy Alliance in March.

Subsequently, they all filed in federal court for a preliminary injunction to block the new fracking requirements from taking effect later this month (see Shale Daily, June 1). All of the requests will be consolidated in the hearing on June 23, which is the day before the scheduled effective date of the BLM rule.

"If the BLM rule is allowed to go into effect, the state of North Dakota could lose hundreds of millions of dollars in mineral royalties, and oil/gas development in the state will be disrupted and delayed," Stenehjem said.

The states and industry representatives are asking for the court to temporarily prevent the rule from being implemented to allow time for the court to review the challenges. Earlier, the states appealed to the assistant secretary of the Interior Department, of which BLM is part, asking the agency to delay the implementation. Interior denied the request.

Originally, North Dakota and the other states asked the federal district court to invalidate the BLM regulations for fracking, alleging that they interfere with "existing and comprehensive" state oil/gas development rules and environmental protection. In addition, Stenehjem said the U.S.  Environmental Protection Agency already has delegated authority to the states to monitor and protect underground water sources.

If the court refuses to block the implementation, the BLM regulations will impact the North Dakota’s oil/gas activities on the sprawling Fort Berthold Reservation, which accounts for 40% of the state's oil production, Stenehjem said.

Last week at an energy symposium in Houston, energy attorneys involved in the case said that if the court rejects the injunction, the states and industry lawyers will need to request a fast-track processing of their original challenge in court, which is still pending (see Shale Daily, June 5).