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US BLM moves to rescind Obama-era fracking rule

Houston (Platts)--28 Dec 2017 558 pm EST/2258 GMT


The US Department of the Interior moved quickly Thursday to rescind an Obama-era rule regulating hydraulic fracturing on federal and Indian lands after a court declined to hear further appeals filed by Native American and environmental groups to try to keep the rule in place.

On Thursday, Interior's Bureau of Land Management released a notice of its intent to publish a final rule in the Federal Register Friday, formally stripping away the fracking rule. The rule had been scheduled to go into effect in 2015, but was never implemented because of court challenges by energy industry groups and several oil- and natural gas-producing states.

"With this final rule, the BLM is rescinding the 2015 rule because we believe it imposes administrative burdens and compliance costs that are not justified," the BLM notice said.

As part of his policy to reduce regulations on the energy industry, President Donald Trump vowed to rescind the rule, which would have updated the BLM's regulations for fracking on federal and Indian lands for the first time in 30 years.

On Wednesday, a three-judge panel of the 10th US Circuit Court of Appeals denied a request by the Indian tribes and environmental groups to have the full court hear their appeal of a lower court's decision to reject the case.

Groups representing the exploration-and-production industry, who had long opposed the proposed fracking rule as burdensome and unnecessary, were quick to laud the decision to rescind it.

The Independent Petroleum Association of America and the Western Energy Alliance, which had sued to block the implementation of the rule, issued a joint statement Thursday.

"We applaud the Interior Department decision to completely rescind the Obama-era rule regulating hydraulic fracturing on federal lands," IPAA CEO Barry Russell said.

"It was clear from the start that the federal rule was redundant with state regulation and politically motivated, as the prior administration could not point to one incident or regulatory gap that justified the rule," Western Energy Alliance President Kathleen Sgamma said.

Shortly after the BLM released its final rule in March 2015, IPAA and WEA, along with the states of Colorado, Wyoming, North Dakota and Utah, and the Ute Indian Tribe, challenged the rule in the federal district court of Wyoming.

In September 2015, a US district court judge granted the energy groups' motion for a preliminary injunction on the rule and the following June the judge struck down the final rule.

In June 2016, the Obama administration and environmental parties appealed the district court ruling and in September 2017, the appeals court dismissed the case, citing the intention of the new administration to rescind the rule in any case.

The appeals court decision not to hear any further appeals effectively ended all litigation surrounding the rule.

The appeals court gave the Trump administration until January 12, 2018 to rescind the rule, but Thursday's action by BLM renders that deadline moot.

--Jim Magill, jim.magill@spglobal.com --Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com




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