The federal Bureau of Land Management (BLM) did not give sufficient attention to the potential environmental impact from hydraulic fracturing (fracking) when it issued oil/gas leases for 2,500 acres two years ago, a judge in the U.S. District Court, Northern District of California, in San Jose ruled on Monday.

Environmental group lawyers who brought the legal challenge to the 2011 leases touted the ruling as meaning BLM cannot allow any drilling on the disputed leases until there is a more comprehensive environmental review completed. Industry officials downplayed the ruling’s significance.

The leases were not negated, but BLM was ordered to meet with its adversaries in the case, the San Francisco-based Center for Biological Diversity and the Sierra Club, and report back to the court by next Monday on how the situation can be rectified.

BLM assumed that the leases might not be developed and if they were, fracking would not be part of the drilling operations, according to a spokesperson for the BLM in California. “We assumed that hydraulic fracturing could be assessed at a later time,” he told NGI’s Shale Daily Tuesday.

U.S. District Judge Paul Grewal ruled that BLM was wrong to leave out an assessment of fracking’s potential impact and that violated federal environmental law when it failed to conduct what he described as a full-fledged environmental impact study of its oil leasing for the Monterey formation.

Grewal concluded that BLM’s analysis was lacking because it “did not adequately consider the development impact of hydraulic fracturing techniques…when used in combination with technologies such as horizontal drilling.”

While conceding that potential fracking risks are still unknown, the judge said they are clearly recognized enough that BLM should not have “ignored” them.

Even though the environmental groups filing the lawsuit wanted the leases on two tracts of land in Monterey County canceled, Grewal refused to go that far. Instead, he ordered the parties to meet and submit a joint action plan, or be ready to argue their respective proposed remedies in the case.

Brendan Cummings, a lawyer for the Center for Biological Diversity, characterized the ruling as a “first” in mandating that federal agencies analyze the potential environmental impacts of fracking as part of implementing oil/gas leasing programs.

In contrast, officials at the Western States Petroleum Association (WSPA) said the judge did not take issue with the use of fracking, per se, but rather with BLM leaving it out of the pre-leasing process environmental assessment.

WSPA is hoping the court ultimately will allow the leases to move forward and the production to take place on that piece of the Monterey Shale.