By Ted Lutz

Staff Writer

It what could be hailed as the best Christmas present ever for the area economy, a federal judge has lifted a Forest Service ban on drilling for oil and gas in the Allegheny National Forest (ANF).
"Enforcement of the forest-wide drilling ban in the ANF is hereby preliminarily enjoined," U.S. District Court Judge Sean McLaughlin of Erie said in an order issued Tuesday. "Proposals for drilling activity shall instead be processed forthwith in the same form and manner in which they had been prior to the inception of the drilling ban." He said this means the drilling activity will be "consistent with the procedures" set forth in a 1980 federal court decision involving the Minard Run Oil Co. of Bradford.
In his order, McLaughlin also halted "further implementation of the settlement agreement" between the Forest Service and plaintiffs who claimed last year that "notices to proceed" for drilling were issued without the proper preparation of environmental studies under the National Environmental Policy Act (NEPA).
The plaintiffs in that case include the Sierra Club, the Allegheny Defense Project and the Forest Service Employees for Environmental Ethics.
This lawsuit brought about a year-long moratorium on drilling in the ANF and has resulted in the loss of local jobs, according to oil industry representatives.
As part of its settlement in the 2008 lawsuit, the Forest Service agreed to ban new drilling until it had time to prepare an environmental analysis under NEPA. The Forest Service is in the process of preparing the study, but it isn't due for completion until April. Meanwhile, the Forest Service has not been issuing "notices to proceed" to drilling companies even though these companies own or control the subsurface mineral rights in the ANF and have permits issued by the state Department of Environmental Protection (DEP).
The Pennsylvania Oil and Gas Association (POGAM), Minard Run Oil, the Allegheny Forest Alliance (AFA) and Warren County went to court in May to seek a preliminary injunction to block the Forest Service settlement of the 2008 lawsuit.
McLaughlin called for a special hearing and heard 16 hours of testimony over a three-day period at the federal courthouse in Erie.
In his order, McLaughlin said "the Forest Service is preliminarily enjoined from requiring the preparation of a NEPA document as a pre-condition to the exercise of private oil and gas rights in the ANF."
"The bottom line is, this allows our employees to go back to work," Arthur Stewart said Tuesday in praising the judge's long-awaited order.
Stewart, a former Warren attorney, is vice president of Sheffield-based Duhring Resource. He is the former solicitor for the Kane Area School District, Wetmore Township, Hamilton Township and several other Warren area municipalities.
Stewart called the order "well reasoned and thoughtful." He said the order supports what the oil companies have long contended – the issue of extracting privately-owned minerals in the ANF was resolved 30 years ago with the Minard Run decision.
About 93 percent of the mineral rights in the 513,000-acre ANF is privately owned. The federal government did not acquire the mineral rights when it acquired the property for the ANF in 1923.
Duhring, the Bradford-based American Refining Group (ARG), the Warren-based Pennsylvania General Energy (PGE) and other companies all have DEP permits for wells in the ANF. They haven't been able to drill, however, due to the Forest Service decision to ban drilling pending the NEPA analysis.
Under McLaughlin's order, the companies now will be able to move ahead with their plans for drilling under the regulations that have been in place for 30 years.
"We want to cooperate with the Forest Service," Stewart said. He said he is hoping work on new wells can begin "within a matter of days."
In the 53-page court order, McLaughlin noted that the Forest Service "concedes" that the "cooperative interactive approach" under the Minard Run court decision "adequately protected the environmental interests" the Forest Service has the "surface owner."
McLaughlin said those seeking the preliminary injunction "have made a clear showing of irreparable harm as a result of the drilling ban" in the ANF.
"The harm experienced by the plaintiffs as a result of the drilling ban is, in my view, concrete and irreparable," McLaughlin said in court documents. He said the "return to the status quo" for allowing drilling in the ANF "would not pose a threat to the ability of the Forest Service to adequately protect its surface estate."
The Forest Service also is preparing a Supplemental Environmental Impact Statement (SEIS) to address drilling. This document is an addition to the 2007 Forest Plan. Drilling has not been barred while the SEIS is being finalized.
McLaughlin, in his order, pointed out that the ANF is a "unique and valuable resource that offers a host of recreational activities for the public."
He said there is "clear public interest" in preserving the ANF for "present and future generations." But he said "there is also a clear public interest in preventing unreasonable interference with private property rights." He believes both interests "can be accommodated through the type of cooperative interaction that had been the hallmark of the Minard Run approach for almost three decades."
U.S. Rep. Glenn "GT" Thompson (R-Howard) issued a statement after learning of the judge's order.
“I’ve had confidence all along in the state’s ability to take care of the environment in the Allegheny National Forest — confidence in the local industry and the citizens of the four-county area, who have been exceptional stewards of the environment for decades," Thompson said.
“The local stake-holders have taken care of the forest for 86 years with the state Department of Environmental Protection providing some of the best enforcement in the nation. It looks as if the judge agreed the Commonwealth does not need outside environmental groups to come in and tell them how to do things.
“This ruling allows companies to bring their employees back to work and plan for the future.
"The decision by the U.S. Forest Service to stop permitting — and, by extension, drilling, for so-called `environmental reasons’ was wrong from the start and did irreversible harm to the local economy.
“This decision is a victory for state’s rights and for local control. It allows drilling to commence and stops the need for those who own drilling rights to prepare a NEPA study as a pre-condition to the exercise of private oil and gas rights in the ANF.
“This also is a victory for the hard-working people of northwest and northcentral Pennsylvania, who anxiously have been waiting for the opportunity to go back to work in the forest they love and where they have supported their families for several generations.”
"This is the best news we could have," Wally Howard of Howard Drilling of Mt. Jewett said after learning of the judge's order. "It really looks positive."
"We're going back to work," Ted Howard of Howard Drilling said with the excitement of a child on Christmas morning."