V&E Shale Insights — Tracking Fracking E-communication, September 11, 2013
The comment period for Bureau of Land Management's (BLM) proposed revisions to its regulations governing hydraulic fracturing on federal and tribal lands closed on August 23, 2013. Among the many comments submitted, the Sierra Club filed extensive comments on behalf of itself and several other environmental groups. These comments set forth a number of wide-ranging objections to BLM’s proposed rule and lay the groundwork for a possible challenge to the rule under the National Environmental Policy Act (NEPA) for a failure to adequately consider climate change and other impacts. This potential challenge is significant in its own right, as any NEPA challenge could significantly delay the implementation of BLM’s rules.
BLM’s revised hydraulic fracturing regulations were proposed on May 16, 2013. These regulations would revise BLM’s existing rules governing oil and gas development on 700 million acres of subsurface mineral estate on federal and tribal lands. The three main areas that the BLM’s proposal seeks to regulate are (1) chemical disclosure; (2) well construction and cementing requirements; and (3) flowback management. More details on BLM’s proposal and its implications for oil and gas production on federal lands can be found here.
BLM’s regulations on hydraulic fracturing have not been revised since 1988, even though roughly 90 percent of the wells drilled on BLM-managed lands employ fracturing techniques. BLM performed an environmental assessment (EA) which concluded that its actions would not significantly affect the quality of the human environment but rather the promulgation of the proposed rule would improve BLM’s ability to protect human health and safety and the quality of the environment. BLM’s EA focused on the marginal environmental impacts of the new requirements in its proposed rule revisions, rather than on the broader environmental impacts of the hydraulic fracturing that is already occurring on federal and tribal lands.
The Sierra Club comments assert that BLM’s NEPA review is “unlawfully narrow,” stating that BLM was obligated to evaluate the environmental impacts of hydraulic fracturing activities on federal lands, not just the impacts of the specific requirements of the changes in BLM’s regulations. The Sierra Club commented that BLM should have conducted a full environmental impact statement (EIS) rather than just an EA, an abbreviated form of environmental evaluation under NEPA. According to the Sierra Club, “BLM cannot update its regulations to account for — and explicitly authorize — hydraulic fracturing without considering the effects of fracturing itself.” However, the two examples that the Sierra Club’s comments cite are potentially distinguishable from the current action. In Wilderness Society v. U.S. Forest Service, 850 F. Supp. 2d 1144 (D. Idaho 2012), the Forest Service was required to prepare a full EIS evaluating the effects of allowing vehicle travel along designated routes even though vehicle travel already occurred prior to the proposed regulation. However, in that case, the already occurring vehicle travel was unregulated and unofficial and its environmental impact had never been considered in a NEPA review. In this case, BLM is not proposing to regulate an unregulated activity; the BLM already regulates and authorizes oil and gas development, including stimulation activities, and as such has evaluated and will evaluate the environmental impact of such development in other instances. Likewise, in the case involving the National Highway Traffic Safety Administration’s (NHTSA) vehicle fuel economy standards, in which the court found that NHTSA’s EA was inadequate and which Sierra Club also cites, NHTSA had never evaluated the impacts of carbon emissions from light trucks or other vehicles or the effect on climate change that a reduction or increase would have. BLM states in its EA that analyzing the effects of hydraulic fracturing activities themselves would be more appropriate when preparing land use plans or evaluating the impacts of an operator’s proposal to drill.
The Sierra Club also claims that BLM’s NEPA analysis was inadequate because it did not include consideration of certain alternatives to the proposed rules such as: a prohibition on hydraulic fracturing in areas where unconventional oil and gas production is not currently taking place, a prohibition of hydraulic fracturing in specific environmentally sensitive areas, additional regulation of the air impacts of hydraulic fracturing, banning the use of diesel and other particularly harmful stimulation fluids, prohibiting wastewater pits, and adopting specific amendments proposed by Sierra Club.
With respect to climate change, the Sierra Club states that development of federal oil and gas resources is a major emitter of greenhouse gases. The Sierra Club’s comments conclude that under NEPA “BLM must take a hard look at the greenhouse gas emissions that would result from allowing extraction of unconventional resources on public lands, including consideration of whether such emissions are consistent with the steps needed to avert disastrous climate change.” The Sierra Club also states that an appropriate review that fulfills the NEPA requirement to take a “hard look” at impacts would include discussion of the possibility of hydraulic fracturing mobilizing other contaminants already present in the ground to contaminate groundwater, water contamination as a result of surface activities, the effect on water resources of water withdrawals and wastewater disposal associated with hydraulic fracturing, and the effects of hydraulic fracturing on environmental resources other than water. Sierra Club criticizes BLM for not discussing waste management issues with lined pits beyond a puncture in the lining, such as a berm failure or overflow caused by rainfall, or to quantify the rates of failure associated with pits and tanks. The group argues that the EA is largely silent as to the effects of hydraulic fracturing on environmental resources other than water such as air, landscapes, habitat, wildlife, visual resources, and other aspects of the environment.
These comments are clearly intended to preserve the Sierra Club’s ability to challenge BLM’s NEPA analysis in federal court. Were the Sierra Club or other environmental groups to pursue NEPA litigation regarding BLM’s proposed hydraulic fracturing rules, such litigation could introduce substantial delays in the rulemaking process. Environmental groups are increasingly turning to NEPA litigation to delay or alter oil and gas development proposals both onshore and offshore.
The Sierra Club’s comments also highlight the increasingly important role that climate change may play in future NEPA litigation. In February 2010, the Council on Environmental Quality (CEQ) released a draft guidance document on the consideration of climate change and greenhouse gas emissions in evaluations under NEPA. However, the proposal noted that “CEQ does not propose to make this guidance applicable to Federal land and resource management actions.” This means that the draft guidance itself is not applicable to the BLM’s proposed rules. However, both the guidance and the Sierra Club’s comments demonstrate that NEPA is likely to be an increasingly active area of climate change litigation in the future. With common law climate change claims effectively foreclosed by the Supreme Court’s decision in AEP v. Connecticut, environmental activists will be forced to identify statutory vehicles to bring such challenges, which may make NEPA climate change litigation particularly attractive in the future.
For further information, please contact Vinson & Elkins lawyers Larry Nettles or Margaret Peloso, or one of the members of V&E's Shale and Fracking practice group: John B. Connally, Casey Hopkins, Jim Prince, Sue Snyder, or Jim Thompson. Visit our website to learn more about V&E’s Environmental practice.