FEDS SETTLE “SWEETHEART SUIT” AND KILL SEARCH FOR ENERGY
by William Perry Pendley
August 1, 2009
One hundred and fifty years ago this month, the first successful commercial oil well was drilled in Titusville, Pennsylvania, thus beginning an oil and gas industry that has thrived both across the country and within forty miles of Titusville in the Allegheny National Forest (ANF). Just weeks ago, the Wall Street Journal reported renewed interest in the region’s Marcellus Shale given massive gas discoveries in the Barnett Shale in Texas, Fayetteville Shale in Arkansas, and Haynesville Shale in Louisiana. The search in the ANF will have to wait, however, thanks to a “sweetheart lawsuit” by environmental groups and a decision by the Obama Administration to admit defeat, settle that lawsuit, and impose a moratorium on energy exploration in the ANF.
In June 2009, the Pennsylvania Oil and Gas Association (POGAM) and Minard Run Oil Company, the Nation’s oldest family owned and operated independent oil producer, and others sued Attorney General Eric Holder, the U.S. Forest Service and its officials, and three environmental organizations. At stake in the case are private property rights, high-paying jobs in one of the most depressed regions of the country, and the search for energy in one of the hottest gas prospects in the Nation.
The ANF covers 500,000 acres in Elk, Forest, McKean, and Warren Counties in north-western Pennsylvania. Because the lands within the ANF were once privately owned and were purchased during the 1920s and because the United States bought only the surface, most oil, gas, and mineral (OGM) rights in the ANF (93%) are privately owned. Thus, there is no basis for any federal government regulatory authority over those rights. In fact, federal law, Forest Service regulations, and federal and state court rulings say the agency has no such authority!
Although, under Pennsylvania law, owners of OGM rights may go on the surface to access their property and may occupy so much of the surface as necessary to do so, the law provides for accommodation; OGM rights must be exercised with “due regard” for surface owners’ interests. That the United States owns the surface does not change the law: like every other surface owner, the United States can do nothing, short of a lawsuit, to deny OGM owners access to their property. This was affirmed, as to a state agency, in a 2009 Supreme Court of Pennsylvania ruling. Therefore, the Forest Service has few options in dealing with OGM rights in the ANF, which is in accordance with the agency’s longstanding practice set forth in the Forest Service Manual. This was recognized by a 1980 Pennsylvania federal district court ruling, which Congress adopted in the Energy Policy Act of 1992.
For decades, the Forest Service adhered to the law and responded to an operator’s 60-day notice of its plans with consultations and a “notice to proceed,” which is not a decision by the Forest Service to allow OGM activity because, again, the Forest Service has no power over OGM rights. Nonetheless, in March 2007, the Forest Service announced its decision to conduct National Environmental Policy Act (NEPA) studies on any plans to develop OGM rights in the ANF. NEPA only applies, however, to “major federal actions,” which means issues as to which the agency has discretion; the Forest Service has no such discretion regarding OGM rights. The Forest Service’s decision is now the subject of litigation.
Meanwhile, in November 2008, environmental groups, recognizing that the Forest Service would lose its attempt to impose NEPA on its own, sued the Forest Service and asserted that a “notice to proceed” is subject to NEPA. After OGM owners intervened, federal lawyers signed a hastily executed “Settlement Agreement,” and the lawsuit was dismissed.
The resultant lawsuit by POGAM and Minard Run is just beginning; however, it may well reach the Supreme Court of the United States where a favorable ruling is essential to the preservation of freedom, not to mention the search for energy in the USA!
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