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Ruling in favor of forest drilling is upheld

September 20, 2011

A preliminary injunction in favor of oil and gas drilling in the Allegheny National Forest (ANF) will stand.
In a ruling announced Tuesday, the U.S. Court of Appeals for the Third Circuit endorsed a preliminary injunction issued in December 2009 by U.S. District Court Judge Sean McLaughlin in Erie.
That injunction enjoins the U.S. Forest Service from preparing a study under the National Environmental Policy Act (NEPA) as a “pre-condition” for drilling oil and gas wells in the ANF.
McLaughlin issued the injunction about four months after a three-day hearing at the federal courthouse in Erie. The hearing included about 16 hours of testimony.
“We affirm the preliminary injunction,” the Philadelphia-based Appeals Court said in its 38-page ruling Tuesday. “We affirm in all respects the district court’s thorough, well-reasoned opinion.”
The appeal was filed in 2010 by the Forest Service, the Forest Service Employees for Environmental Ethics (FSEEE), the local Allegheny Defense Project and the Sierra Club.
The Appeals Court heard the case earlier this year.
The plaintiffs who went to federal court in Erie in May 2009 to seek the injunction include Minard Run Oil of Bradford, the Pennsylvania Independent Oil and Gas Association (PIOGA), the Allegheny Forest Alliance (AFA) and Warren County.
As the Appeals Court points out in its ruling, “This appeal concerns a dispute between the U.S. Forest Service and the owners of mineral rights in the ANF.”
More than 90 percent of the subsurface mineral rights in the ANF are privately owned.
“Mineral rights owners are entitled to reasonable use of the surface to drill for oil and gas,” the Appeals Court said. “Although owners must show ‘due regard’ to the rights of the surface owner, the mineral owner need not obtain consent or approval before entering land to mine for minerals.”
The court pointed out that from 1980 “until recently” the Forest Service and the owners of the mineral rights had “managed drilling in the ANF through a cooperative process.”
“When interacting with mineral rights owners in the ANF, the Service viewed itself as a resource management agency negotiating use of jointly owned land-- not as a regulatory agency issuing permits,” the Appeals Court said.
The drillers first would obtain a permit from the state Department of Environmental Protection (DEP), which regulates drilling in Pennsylvania. Then the drillers would provide 60 days' notice to the Forest Service of “their drilling plans.” Negotiations over drilling sites and operations would take place before the Forest Service would issue a “notice to proceed (NTP).”
As the Appeals Court pointed out, this cooperative agreement for drilling came to an end in early 2009.
“As a result of a settlement agreement with environmental groups, the Service dramatically changed its policy and decided to postpone the issuance of NTPs until a multi-year, forest-wide Environment Impact Study (EIS) under NEPA is completed,” the court said.
In November 2008, the FSEEE and the Sierra Club filed a lawsuit in federal court in an effort to force the Forest Service to prepare a “proper NEPA analysis” before issuing NTPs for drilling.
Two months after this lawsuit was filed, the Forest Service in January 2009 “ceased processing and issuing NTPs,” the Appeals Court pointed out.
On April 9, 2009, the Forest Service announced a settlement with the plaintiffs and agreed to “undertake appropriate NEPA analysis prior to issuing Notices to Proceed,” the Appeals Court said.
The plaintiffs “affected by this new policy sought to enjoin the Service from implementing the policy, which would halt new drilling in the ANF,” the Appeals Court said in its ruling.
The plaintiffs claimed that the Forest Service had imposed “a de facto drilling ban in the ANF” and that “this ban exceeded the authority of the Service.”
The plaintiffs also alleged that the environmental study needed before drilling could resume “probably would not be completed for several years.”
“As a result, mineral rights owners will be prevented from exercising their property rights during this period—resulting in damage to the owners, related businesses and the local community,” court documents said.

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