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Wyoming Federal Judge Denies Preliminary Injunction



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On January 17, 2017, U.S. District Court Judge Scott Skavdahl issued an order denying a motion for a preliminary injunction that would have stayed implementation of new venting and flaring rules recently issued by the United States Department of the Interior, Bureau of Land Management (“BLM”).  As a result, the new rules became effective January 17, 2017.

On November 18, 2016, the BLM issued a set of new rules imposing tougher venting and flaring regulations for oil and gas operators on federal and Indian lands (collectively, the “Final Rule”).  The Final Rule replaces older regulations referred to as “NTL-4A” that had been in effect since 1979.

Following the promulgation of the Final Rule, several states and industry groups filed suit against the BLM in Wyoming federal court in an effort to block or invalidate the new venting and flaring regulations. The plaintiffs asserted the Final Rule is fundamentally a set of air pollution rules—an area that Congress left exclusively to the Environmental Protection Agency and the states for regulation.  The BLM countered that the Final Rule will help maximize federal royalties from federal oil and gas production, which are subjects within its regulatory purview.

The Court has not dismissed this case; rather, Judge Skavdahl indicated that both sides presented good faith arguments and ordered an expedited briefing schedule to be concluded before the end of April 2017.  As a result, the Final Rule should face further scrutiny and be subject to later stay or invalidation when the District Court is expected to address the merits of the complaint later this year.