Judge Blocks Enforcement of Federal Oil and Gas Waste Rule in 5 States

Oil is pumped and natural gas is flared off on an oilfield near Watford City, N.D., on June 12, 2014. Charles Rex Arbogast/AP Photo

A federal judge has blocked the enforcement of a Biden administration rule on natural gas venting and flaring in five states, saying that it posed a “significant impingement” on states’ sovereign rights.

U.S. District Court Judge Daniel Traynor granted a preliminary injunction on Sept. 12 to temporarily block the Bureau of Land Management’s (BLM) rule in North Dakota, Montana, Utah, Texas, and Wyoming until the court issues a final ruling on the merits.

The rule, finalized by the BLM in April, aimed at curbing natural gas waste during the production of oil and gas on federal and Tribal lands. It requires oil operators to take steps to avoid wasting natural gas—such as reducing wasteful gas venting and flaring—and pay royalties for “avoidable losses of natural gas.”

In a 22-page ruling order on Sept. 12, Traynor said the BLM rule was “not reasonably explained” and lacked specific details about when in the process that waste occurs.

“The flaring limits and other bureaucratic requirements imposed by the 2024 Rule are unsupported by ancillary environmental benefits,” the judge stated.

“They conflict with other federal and state laws, and they add nothing more than a layer of federal regulation on top of existing federal regulation,” he said.

Traynor said that the BLM rule focuses on an area already regulated by the Clean Air Act and state laws that are designed to protect the environment.

“This case is an example of where the left hand of the government does not know what the right hand of the government is doing,” the ruling stated.

The judge also stated that the plaintiffs have shown that “they are likely to succeed on the merits of their claim the 2024 Rule is arbitrary and capricious.”

A BLM spokesperson said the agency had no comment on the litigation.

The BLM said in March that the new rule would help to generate more than $50 million in additional natural gas royalty payments every year to federal taxpayers and Tribal mineral owners.

According to the agency, the rule “modernizes regulations that are more than 40 years old” and aims to “hold oil and gas companies accountable” by requiring them to implement measures to avoid wasteful practices, while ensuring that American taxpayers and Tribal mineral owners are fairly compensated through royalty payments.

The states have argued that the rule will inflict “irreparable economic harm” due to reduced state revenue from royalties and extraction taxes caused by decreased development of oil and gas on federal and Indian lands.

‘Harmful and Unnecessary’

North Dakota Gov. Doug Burgum and Attorney General Drew Wrigley issued a statement praising the judge’s ruling and called the decision “a temporary victory” for consumers and U.S. energy independence.

Burgum said that the BLM rule included “harmful and unnecessary regulations” that undermine states’ authority to be the primary regulators of air quality within their borders under the Clean Air Act.

“This rule is yet another example of the Biden–Harris administration overstepping the limits on agency authority set by Congress to achieve their misguided goal of phasing out traditional energy production,” the governor said.

Wyoming Gov. Mark Gordon welcomed the court’s ruling and said that it marked “a great first step and an extremely positive indication” that the states’ legal case could succeed as it progresses.

“This fight is nowhere near completed and there is still much work to be done to protect Wyoming’s economy from the onslaught of other regulations,” Gordon said in a statement.