Republican Staff
ERIE – A federal judge has upheld a preliminary injunction against a Forest Service moratorium on the drilling of oil and gas wells in the Allegheny National Forest (ANF).
"I find no grounds to alter my opinion," U.S. District Court Judge Sean McLaughlin said Tuesday upholding his December ruling that again permits drilling in the forest.
His order to affirm the preliminary injunction came from the bench at the conclusion of a 90-minute hearing Tuesday at the federal courthouse in Erie.
The hearing was precipitated by the Forest Service, which filed a motion to "respectfully ask the court to reconsider" its December ruling "or, at least" clarify the order as to the procedures to be followed at the ANF related to oil and gas development."
Ruth Ann Storey, attorney for the Natural Resources Section of the U.S. Department of Justice in Washington, D.C., represented the Forest Service at the hearing. R. Timothy McCrum, a Washington, D.C. attorney, represented the Pennsylvania Oil and Gas Association (POGAM).
More than 40 involved in the Kane area oil and gas drilling business attended the hearing and welcomed the judge's order, which is viewed as a boost to the local economy.
"We're very pleased with the outcome," Arthur Stewart said. He said the order reaffirms the POGAM position that the Forest Service "doesn't have regulatory authority" over the extraction of privately-owned subsurface minerals in the ANF.
Stewart, a Warren attorney, is vice president of the Sheffield-based Duhring Resources. He is the former solicitor for the Kane Area School District and Wetmore and Hamilton townships.
McCrum, a native of Pittsburgh, said POGAM is "very happy with the ruling."
Craig Mayer, chairman of the POGAM ANF Committee, said the decision means the December order "remains fully in effect."  
In a statement issued Tuesday, U.S. Rep. Glenn "GT" Thompson (R-Centre County) "applauded the decision by Judge McLaughlin denying the motions for reconsideration by the U.S. Forest Service."
“Judge McLaughlin reconfirmed his earlier decision to lift the ban on drilling permits,” Thompson said. “The judge recognized the firm legal basis under which producers have been exercising their right to access their subsurface property for more than 85 years.”
While upholding the preliminary injunction he issued in December, McLaughlin said the ruling isn't intended to give drillers "carte blanche" status to begin drilling on "the 61st day" after seeking a "notice to proceed" from the Forest Service.
Under the 1980 court settlement of a suit filed by Minard Run Oil of Bradford, drillers are obligated to provide the Forest Service with certain project details "no less than 60 days in advance" of drilling. McLaughlin called the 60-day period "a target."
From 1980 through 2008, the Forest Service and drillers "relied" on the "framework" of the Minard Run case to "define their respective rights and obligations," McLaughlin said in documents linked with his December ruling. "The Forest Service would then work cooperatively with the drillers to address any concerns prior to issuing a Notice to Proceed," the judge said.
The preliminary injunction calls for "proposals for drilling activity" within the ANF to be "in the same form and manner in which they had been prior to the inception of the drilling ban and consistent" with the 1980-81 Minard Run case.
McLaughlin said Tuesday that "a time longer than 60 days may be necessary" for Forest Service clearance for certain drilling projects. But he also indicated that the Forest Service could "seek injunctive relief" in court.
Mayer said this means "it will be incumbent on the Forest Service" to seek the "relief" in federal court "in the event the Forest Service and the drillers can’t come to an agreement regarding a requirement for an accommodation from the Forest Service."
Leanne Marten, supervisor of the Warren-based ANF, said in court documents that "the processing of well proposals has, more often than not, exceeded 60 days." She said the "average time required for processing applications" has been about 5 1/2 months.
McCrum told the judge that "every project far exceeds" the 60-day advance-notice period called for in the Minard Run ruling. He said drillers are exercising their "patience" in waiting for a "notice to proceed." But he argued that  the Forest Service shouldn't have the "unilateral right to dictate conditions."
He said there is "a fundamental problem" when the Forest Service is "acting as a regulatory" agency.
It's been previously pointed out that drillers can't seek Forest Service permission to drill until they have permits issued by the state Department of Environmental Protection (DEP), which is a regulatory agency. The drillers must meet rigid DEP regulations before they receive a DEP permit.
The Forest Service put the drilling moratorium in place last April as part of a settlement of a November 2008 lawsuit filed by the Sierra Club, the Allegheny Defense Project and the Forest Service Employees for Environmental Ethics.
Bill Belitskus of Hamlin Township, president of the Allegheny Defense Project, attended the hearing Tuesday.
POGAM, Minard Run Oil, the Allegheny Forest Alliance and Warren County went to federal court in May to challenge the moratorium, which was expected to continue at least until April of this year while the Forest Service prepared a study under the National Environmental Policy Act (NEPA) Act. But the preliminary injunction issued in December enjoins the Forest Service from "requiring the preparation of a NEPA document as a pre-condition to the exercise of private oil and gas rights in the ANF."
McLaughlin issued the preliminary injunction in mid-December, nearly four months after a three-day hearing in federal court in August. The hearing includes more than 16 hours of testimony.
About 93 percent of the subsurface mineral rights in the ANF is privately owned.
The hearing Tuesday isn't the end of the battle in courts over drilling in the forest.
McLaughlin said the Sierra Club has appealed his decision on the preliminary injunction to a higher federal court. POGAM also has filed motions to seek a "permanent" injunction against the moratorium on drilling in the forest.
A key argument in court Tuesday surrounded timber cut to make way for well sites and access roads. There apparently are two options. The Forest Service can market the timber. Or the Forest Service can require the drillers to buy the timber. Most times, the drillers are required to buy the timber, it was pointed out. There have been disputes between the Forest Service and the drillers over the value of the timber.
McLaughlin wondered whether it is in the "best interest" of the Forest Service to "shop yourself" for timber buyers "or let the drillers take it."
"It's more complicated than that," Storey said. She said "marketing alternatives" are not currently in place, meaning that the Forest Service is negotiating only with drillers to sell the timber for well sites and access roads. These negotiations are "causing slowdowns" in drilling projects because the Forest Service is "dictating written agreements," McCrum said.
According to a legal document signed by Marten, the Forest Service as of Jan. 7 had about 57 pending applications for drilling.
She said the proposals involve about 2,391 wells, 26 companies and range in size from one well to as many of 1,515 (over a period of years).
Marten said her office has "put into place an organizational structure to help expedite processing of these proposed drilling activities."
She said the "structure" has 70 employees, including seasonal workers. She said about a third of the Forest Service employees are assigned to the drilling team, which includes a team leader, four sub-team leaders and employees assigned to coordinate the oversee "logistics, safety, documentation and human resources (hiring)."
In the court document, Marten said a meeting was held in January between the Forest Service and companies involved in the drilling of oil and gas wells in the ANF. More than 60 company representatives attended the forum, she said.
According to Marten's statement, there is "continued disagreement about the timeframe for processing packages" as well as the process for removing timber.
The Forest Service has prepared a draft Supplemental Environmental Impact Statement (SEIS) as an addition to the 2007 Forest Plan.
"The Forest Service completed its review of public comments received during the comment period and intends to move forward with making a decision," Marten said in court documents. "The final decision will replace previous Forest Plan decisions pertaining to oil and gas standards and guidelines." She said the decision on the SEIS is subject to "administrative appeal."