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Drillers Sue U.S. Forest Service Again Over Water Issues

Attorneys for the oil and gas industry in Pennsylvania are asking U.S. District Judge Sean McLaughlin to find the U.S. Forest Service (USFS) in contempt for refusing to follow his 2009 order to process oil and gas development proposals in the Allegheny National Forest.

In papers filed Friday in U.S. District Court for the Western District of Pennsylvania, lawyers for the plaintiffs -- the Pennsylvania Independent Oil and Gas Association (PIOGA), the Minard Run Oil Co. (MROC), the Allegheny Forest Alliance and Warren County, PA -- accuse the USFS of violating a 1980 federal ruling on surface landowner rights, as well McLaughlin's own order from Dec. 15, 2009.

At issue are efforts by a PIOGA member -- SWEPI LP, a Shell Oil Co. affiliate -- to use groundwater and surface water from the Allegheny National Forest for hydraulic fracturing (fracking) at three natural gas wells. SWEPI completed drilling two of the wells in March at a cost of $7 million.

According to the complaint, officials from SWEPI and the USFS met in March and April to discuss the company's proposal to drill a groundwater well, in accordance with the 1980 ruling's requirement for a 60-day consultation period. SWEPI said the company would save $1.5-2 million per well instead of transporting water in by truck.

But in a June 6 letter forest supervisor Leanne Marten said the company did not have the right to withdraw groundwater from the park, saying, "The United States alone has the right to use groundwater located under these National Forest System lands." The USFS then appears to have unilaterally issued a ban on using national forest water for fracking.

The plaintiffs' attorneys called Marten's position "unprecedented and unsupported," and said the USFS had missed the 60-day deadline more than 90% of the time since July 15, 2010, instead taking an average of seven months to process proposals. The attorneys also accused the USFS of "engaging in chronic and widespread delays."

McLauglin had ruled in 2009 that the USFS could not require oil and gas companies to prepare an environmental impact statement on their activities in the Allegheny National Forest, nor could the USFS implement a forestwide drilling ban there.

Fred Fesenmyer, CEO of Bradford, PA-based MROC, told NGI's Shale Daily that the USFS has appealed McLaughlin's ruling and that his company and the other plaintiffs were still awaiting a ruling by the Third Circuit Court of Appeals in the case, also known as Minard Run Oil Company v. United States Forest Service et al.

"This is a very bad turn of events for the industry, and it doesn't put the forest service in a very good light either," Fesenmyer said Wednesday. "The forest service is coming up with ways to slow the producers down, and now they have come up with this idea that the forest owns the water underneath the surface. We've said that's ridiculous. This is supposed to be a forest of many uses, and they're trying to restrict us."

Marten was unavailable for comment Wednesday. Jim Seyler, USFS operations staff officer for the Allegheny National Forest, declined to comment because the issue was in litigation.

"It's been an ongoing battle with the forest service in recent times," Louis D'Amico, president of PIOGA, told NGI's Shale Daily on Wednesday. "The rights of mineral owners to develop natural gas and oil in the Allegheny National Forest have been upheld for decades, including the 2009 decision by a federal judge. But the forest service refuses to comply with the terms of that order. That's why we felt that we needed to take the action to enforce the judge's decision."

Other defendants in the case include the Sierra Club, the Allegheny Defense Project and Forest Service Employees for Environmental Ethics.

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