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Appellate Court Tosses Litigation Over BLM Fracking Rule

A divided appellate court panel on Thursday dismissed litigation against an Obama-era rule governing hydraulic fracturing (fracking) on public and tribal lands, on the grounds that the Trump administration intends to rescind the rule.

In a ruling in the U.S. Court of Appeals for the Tenth Circuit Court in Denver, Judges Mary Beck Briscoe and Jerome Holmes pointed out that two key events occurred since a district court judge ruled in June 2016 that the Interior Department's Bureau of Land Management (BLM) does not have the authority to regulate fracking: Trump was elected president, and the BLM began the process of rescinding the rule.

"Given these changed and changing circumstances, we conclude these appeals are prudentially unripe," Briscoe and Holmes wrote. "As a result, we dismiss these appeals and remand with directions to vacate the district court’s opinion and dismiss the action without prejudice."

Judge Harris Hartz said that while he concurred with most of the panel's opinion, he dissented on the issue of vacating last year's order by U.S. District Court Judge Scott Skavdahl invalidating the rule.

"The majority has chosen to vacate the district court's order," Hartz wrote. "Perhaps that is the proper choice. In my view, however, we do not have adequate information to make that determination."

In an unusual twist, both supporters and opponents of the BLM rule claimed the ruling as a victory.

Earthjustice staff attorney Michael Freeman said with the circuit court's decision to vacate the lower court’s order, "the rule will now take effect. These are long-overdue protections for our public lands, water and public health."

Earthworks' energy program director, Bruce Baizel, called the ruling "two victories in one...It means the BLM can start enforcing a rule to protect water, public health, and communities threatened and harmed by fracking on public lands. The second victory, no less important than the first, is that in the eyes of the court and the eyes of the Trump administration the public's land managers have the authority to regulate drilling on the lands the public owns.

"The court's decision upholds the rule of law and recognizes the importance of a fair, transparent, and legal process. It's time for the Trump administration to put public health and clean water above energy industry profits and protect these common sense fracking safeguards for our public lands."

However, energy industry groups, including the Independent Petroleum Association of America (IPAA) and Western Energy Alliance (WEA) also celebrated the ruling. The WEA blasted Earthjustice and Earthworks for their "ignorance of the basic workings" of the legal process.

"There will be some legal maneuvering between now and when the circuit court's ruling goes into effect, but the bottom line is the BLM fracking rule is not in effect," said WEA President Kathleen Sgamma. "The misinformation that the rule is now suddenly enforceable was yet more fake news from environmental groups trying to spin their defeat in court as a victory."

According to the WEA, appellate court rules stipulate that for cases involving the federal government, parties have 45 days to submit a rehearing request. The court would then issue a mandate within seven days after the deadline passes to request a rehearing, or seven days after the court denies such a request. Since the appellate court's ruling won't take effect or become enforceable until after a mandate is issued, the WEA argued that the BLM rule could not take effect until mid-November at the earliest.

"The circuit court dismissed the environmental groups' appeal specifically because BLM is in the process of redoing the rule, and therefore addressing the merits of the appeal would be a waste of judicial resources," the WEA said. "The vacatur of the lower court decision is procedural, not based on the merits of the ruling."

Sgamma said she wanted to assure producers that work on federal and tribal lands that the ruling “does not mean they must suddenly comply with the ill-conceived fracking rule. We urge BLM to finish its rulemaking quickly so that by early November when the circuit court's ruling goes into effect, there will be certainty for companies operating on federal and tribal lands."

Sgamma said the IPAA and WEA would submit comments on Monday (Sept. 25), the final day of the public comment period.

Baker & Hostetler LLP attorney Mark Barron, who represented the IPAA and WEA, said he believes environmental groups may ultimately decide to file more lawsuits. Possible scenarios include the Trump administration trying to block the rule from taking effect, or for the BLM to rescind the current rule and replace it with another.

"Hopefully we're done with this lawsuit, and it will probably be in the hands of others whether or not there is another one," Barron told NGI's Shale Daily on Friday. "That's my suspicion; of course [the environmental groups] don't let me into their strategic meetings. But I think it's realistic that that's a possibility -- that when there's a new final rule, that they might be inclined to sue on that one."

Barron said the current legal challenge "has been a difficult case for non-legal people to follow because the procedural machinations have been pretty complex. It's hard to focus on the sensitive merits issues when the procedure is so complicated."

The rule would require oil and gas operators to use the FracFocus registry to disclose the chemicals used in fracking and use above-ground tanks to temporarily store produced water, among other things. The government filed an appeal after Skavdahl's ruling.

Last March, the Tenth Circuit gave the Trump administration one week to decide whether it wanted to continue defending the rule in court. Attorneys for BLM said the Obama-era rule did not reflect the Trump administration's priorities and asked the court to postpone a pair of cases over the rule. The court granted the request, postponing oral arguments until late July.

The cases are State of Wyoming et al v. Zinke et al, No. 16-8068; and State of Wyoming et al v. DOI, No. 16-8069.

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