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Pennsylvania Awaits Court Decision on State Forest Leasing

Pennsylvania has negotiated a settlement with an environmental group that will temporarily bar the Department of Conservation and Natural Resources (DCNR) from issuing any new subsurface leases in state forests and parks until a Commonwealth Court can rule on a broader lawsuit this fall.

The deal was reached Thursday, a week after Gov. Tom Corbett signed a state budget that calls for generating $95 million in revenue with new leases in state parks and forests and diverts money from the state's Oil and Gas Lease Fund to pay for the day-to-day operations of DCNR (see Shale DailyJuly 10).

The Pennsylvania Environmental Defense Foundation (PEDF) filed a request for a preliminary injunction earlier this year to halt a proposal from Corbett to lift a four-year old ban on the leases enacted by his predecessor, Democrat Ed Rendell, until the lawsuit could be resolved (see Shale DailyJune 10Oct. 27, 2010).

That injunction, though, could have enjoined funds for DCNR, leaving it without the ability to operate for the next year (see Shale DailyJuly 14).

"Without this settlement, DCNR's capacity to preserve Pennsylvania's natural treasures would have been decimated," Corbett said in a statement. "We cannot allow our commitment to protecting Pennsylvania's state parks and forests to be held hostage during the duration of this lawsuit."

The PEDF filed the complaint in 2012 after Corbett made a promise shortly after taking office to lift the ban. In May, he issued an order to generate $75 million in additional revenue that would have allowed DCNR to issue leases allowing operators to access oil and gas under state parks from private land nearby (see Shale Daily,May 23). But the General Assembly, facing a $1.5 billion budget deficit, increased the total to $95 million.

The PEDF has continued to claim that Corbett, a Republican, has violated his duty to protect state resources. The lawsuit alleges that both the Corbett administration and the General Assembly have violated state law and the constitution by appropriating money from the Oil and Gas Lease Fund for general purposes. The group wants the agency to use those funds for conservation efforts, as it was originally intended, rather than for operational purposes as the state has done in recent years.

The new budget calls for diverting more than $70 million of Oil and Gas Lease funds to the DCNR for fiscal year 2014-2015, in a move that PEDF attorney John Childe says makes the agency entirely too reliant on money intended to protect the state's natural resources.

"Should the court have enjoined the use of the Oil and Gas lease funds, DCNR would be left without the ability to operate for the next year, and our parks and forests would have had to close down," he said. "PEDF is bringing their case to support DCNR's ability to protect our parks and forests, not to shut them down."

Commonwealth Court Judge Kevin Brobson issued an order last Thursday upholding the agreement which was reached between the PEDF and the governor's Office of General Counsel. The PEDF has withdrawn its request for a preliminary injunction after the state agreed to suspend its plans for new gas leases. Briefs in the lawsuit are due by September and oral arguments are set for October.

"This agreement will allow the critical operations of DCNR to continue including all state parks remaining open and staff being available during our busiest time of year, and no interruption to the work of our Bureau of Forestry, such as managing the multiple uses of our state forests, monitoring gas development on the forests to protect their natural and recreational values, fighting fires, forest pest management and other operations,” said DCNR Secretary Ellen Ferretti.

Since 2008, when DCNR held its first competitive gas lease sale for the Marcellus Shale in state forests, 568 horizontal wells have been drilled there. From 1947-2012, vertical and horizontal wells combined have generated nearly $736 million in state revenue, according to a DCNR report released in April.

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