Caselaw Update: U.S. District Court Rejects New Mexico Fracking Ban

On August 3, 2021, the U.S. District Court for the District of New Mexico rejected an attempt to ban fracking by denying an injunction sought by multiple environmental groups. The United States Bureau of Land Management (“BLM”) and several environmental groups, headed by Dine Citizens Against Ruining our Environment (“Dine”), have been engaged in a lengthy court battle over fracking in the Mancos Shale/Gallup Sandstone formation of the San Juan Basin since 2015. Most recently, Dine has sought injunctions against the Department of the Interior (DOI) and BLM (1) preventing oil and gas development in the Mancos Shale—one of the most mineral rich sources of natural gas in the United States, with over sixty years of production and roughly 23,000 active wells.

In 2015, Dine filed for a preliminary injunction preventing all future horizontal drilling and hydraulic fracturing (“fracking”) in the Mancos Shale by challenging over 300 applications for permits to drill (“APDs”) in the formation, claiming that granting the APDs would violate the National Environmental Policy Act (“NEPA”) and the National Historic Preservation Act (“NHPA”). The BLM ultimately prevailed in this suit but was ordered to conduct further review of five environmental assessments (EAs) relating to the cumulative impacts of the requested mineral development on water resources. Dine viewed the ruling as a victory. and within three months brought an action challenging 32 additional EAs in the Mancos Shale. The continued pleas for injunctive relief effectively amounted to a ban on fracking.

In response to the additional litigation, and already performing reviews of the five EAs as previously ordered by the court, the BLM provided a finalized EA addendum which supplemented a total of 81 EAs and covered 370 APDs. The BLM issued findings of no significant impact for each of the APDs in question, which Dine sought to exclude on the belief that the BLM’s decision to permit these wells was predetermined.

Despite their claim, Dine failed to prove that the BLM’s research was conducted to further a preconceived outcome. The law encourages federal agencies to supplement their plans of action with new and beneficial information, and the court concluded that not only did the BLM issue its EA addendum in accordance with NEPA, in several instances it surpassed federally mandated guidelines for review. The court also found that the BLM’s findings were not “arbitrary, capricious, an abuse of discretion, or [unlawful],” and therefore did not violate the Administrative Procedures Act.

The court prejudicially dismissed Dine’s claims, barring the groups from relitigating the issue in the future. Currently, there is no movement indicating an appeal of the district court’s order.

Kuiper Law Firm, PLLC specializes in oil and gas and we will continue to monitor associated litigation; if you have any questions about how the information in this article may apply to you or your operations, do not hesitate to contact us.

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(1) Case No. 1:19-CV-00703-WJ-JFR, U.S. District Court for the District of New Mexico.