North Dakota joining Wyoming lawsuit contesting federal rules for drilling on public land

Energy Associated Press

North Dakota, whose oil riches have been unlocked by the use of hydraulic fracturing, said Tuesday it will join Wyoming in a lawsuit challenging a new federal rule requiring more information about the process when it's used on U.S. government lands.

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The Obama administration announced in March that it will require companies that drill on federal lands to disclose the chemicals used in hydraulic fracturing. The U.S. Bureau of Land Management rule, under consideration for about four years, takes effect in June.

Wyoming and North Dakota believe the move is unlawful in part because it interferes with their own regulations that address the process.

"Our rules are very robust, very stringent and we enforce them," said North Dakota Attorney General Wayne Stenehjem.

North Dakota will officially join Wyoming's lawsuit on Wednesday, Stenehjem said. That suit alleges the BLM overstepped its jurisdiction with the rules and they conflict with the federal Safe Drinking Water Act. Stenehjem said the BLM does not have authority to regulate hydraulic fracturing and other "underground injections" under that federal law.

"The claims in their lawsuit parallel our own," Stenehjem said of Wyoming's challenge, and noted that joining the existing challenge will make the lawsuit more cost effective for both states. North Dakota already has $1 million set aside specifically for litigation on hydraulic fracturing issues, he said. The money, approved by lawmakers two years ago, comes at least partially from oil tax revenue.

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The Interior Department and the BLM declined to comment on the lawsuit, citing pending litigation.

Hydraulic fracturing uses a pressurized concoction of water, chemicals and grit injected to break open oil-bearing rock, which allows the oil to flow to the well. To capture crude from the formations in North Dakota, companies drill down nearly two miles then angle the well sideways for about another two to three miles. Because the oil wells run horizontally, if they cut even a corner across federal land, the rule would apply.

The technique, more commonly known as fracking, has elevated North Dakota from the ninth biggest oil-producing state just seven years ago to second, trailing only Texas.

In some states, the use of fracking been blamed for endangering water quality. North Dakota regulators say the state's water sources are protected by thousands of feet of geologic formations atop fracturing operations.

North Dakota has had rules addressing fracking — and the required disclosure of chemicals in the process — since 2012. Wyoming has had similar rules in place since 2010.

The new federal rule could add "months or even years" to the permitting process and will hamper the drilling of thousands of wells in the state, said North Dakota Mineral Resources Director Lynn Helms, the state's top energy regulator.

"We have no choice but to protect our rights here," said North Dakota Gov. Jack Dalrymple, who heads the state Industrial Commission, which oversees the state's energy industry. Dalrymple, Stenehjem and Agriculture Commissioner Doug Goehring make up the commission.

Ron Ness, president of the North Dakota Petroleum Council, which represents more than 500 companies working in the state, said the permitting process on federal land already is overly burdensome and agencies are understaffed to deal with oil production in North Dakota and elsewhere.

"This duplicates what this state and other states already have done," Ness said. "And BLM already is overwhelmed and resource-short."

Two industry groups, the Western Energy Alliance and Independent Petroleum Association of America, filed a separate but similar lawsuit over the rules in Wyoming federal court in March.