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VICTORY FOR PA ENERGY EXPLORATION SUSTAINED

March 9, 2010 - For Immediate Release
Contact: William Perry Pendley

DENVER, CO. A Pennsylvania federal district court today denied motions by the U.S. Forest Service to set aside the court’s ruling barring the agency from implementing its settlement agreement with environmental groups, prohibiting the agency from conducting studies on the use of privately owned oil, gas, and mineral rights beneath the Allegheny National Forest (ANF), and lifting a moratorium by the agency on oil and gas drilling in the ANF. The ruling, in favor of Minard Run Oil Company and the Pennsylvania Oil and Gas Association (POGAM), follows the court’s December 15 ruling, which in turned followed the June 1 filing of a lawsuit, a three-day hearing in Erie, Pennsylvania, in August, and post-hearing briefs. Minard Run and POGAM are represented by a legal team of Mountain States Legal Foundation (MSLF), a public interest law firm, the Washington, DC, law firm of Crowell and Moring, and the Wolford Law Firm of Erie, PA; all argued that the Forest Service’s agreement with environmental groups, following a 2008 lawsuit, to do National Environmental Policy Act (NEPA) studies, is illegal.

“We are very pleased the court held firm,” said William Perry Pendley, MSLF president. “This is a huge victory for the search for energy, for private property rights, and for economic growth during these very tough times.”

The ANF, which covers 500,000 acres in Elk, Forest, McKean, and Warren Counties in northwestern Pennsylvania, comprises lands that were once privately owned and were purchased under the 1911 Weeks Act during the 1920s. Because the United States bought only the surface estate, most of the mineral rights in the ANF are privately owned. Thus, there is no contractual basis for any federal government regulatory authority over outstanding oil, gas, and mineral (OGM) rights in the ANF.

Although, under Pennsylvania law, owners of OGM estates have the right to go onto the surface to access their property and to use as much of the surface as necessary to remove it, the law provides for accommodation; therefore, OGM rights must be exercised with “due regard” for the interests of surface owners. That the United States owns the surface does not change the law. In accordance with the Forest Service Manual, the Forest Service has only limited rights as to the use of OGM rights within the ANF. This was recognized by a Pennsylvania federal district court in a 1980 ruling.

For decades, the Forest Service adhered to the law and its policy and responded to an operator’s 60-day notice of its plans with consultations and a notice to proceed. A notice to proceed, however, is not a decision to allow oil and gas development because the Forest Service has no regulatory power over OGM rights. In 2007, the Forest Service began to reverse this policy.

Mountain States Legal Foundation, founded in 1977, is a nonprofit, public-interest law firm dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system. Its offices are in the Denver, Colorado, metropolitan area.

Minard Run Oil Company v. United States Forest Service, No. 09cv125 (W.D. Penn.)