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Allegheny National Forest at Center of Drilling Dispute

June 15, 2009
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A lawsuit pitting Pennsylvania's energy industry and some state officials against the U.S. Forest Service's plans to enact federal drilling rules in Allegheny National Forest appears headed to mediation.

Last November the Forest Service Employees for Environmental Ethics group, Allegheny Defense Project and the Sierra Club filed a lawsuit against the Forest Service for its failure to comply with the National Environmental Policy Act (NEPA) before approving private natural gas and oil drilling projects in Allegheny National Forest. More than 90% of the mineral rights under the national forest land are privately owned, and until recently the Forest Service did not require an environmental analysis, as required by NEPA, for drilling projects.

The lawsuit, filed in U.S. District Court for the Western District of Pennsylvania (No. 1:08-cv-323-SJM), charged that the Forest Service had to comply with NEPA and prepare appropriate environmental analyses, subject to public comment, before allowing drillers to build roads and drill well sites in the forest.

In April the opposing parties settled. The Forest Service agreed to "undertake appropriate NEPA analysis" before authorizing "access to and surface occupancy of the forest for oil and gas projects on split estates including both reserved and outstanding mineral rights."

An "appropriate NEPA analysis," said the Forest Service, "shall consist of the use of a categorical exclusion or the preparation of an Environmental Assessment or an Environmental Impact Statement (EIS)." Further, "in the context of split estates the Forest Service has legal authority to establish reasonable conditions and mitigation measures to protect federal surface resources."

Under the settlement agreement, 54 leaseholds covering 588 oil and gas wells, one pipeline and one seismic line in the national forest were allowed to move forward without NEPA analysis.

Following the settlement Pennsylvania Rep. Glenn Thompson, whose district includes most of the Allegheny National Forest, said he was "mystified and seriously troubled" because the agreement had the "potential to kill the regional economy, increase unemployment and further our dependence on foreign oil and natural gas." Thompson further suggested that there was a conspiracy between the U.S. Justice Department, the Forest Service and "radical environmentalists" to shut down energy development in the national forest.

Warren County Commissioner John Bortz added, "I think it's time the U.S. Forest Service leaves Warren County."

Just days before the lawsuit was settled, the Pennsylvania Oil and Gas Association, known as POGAM, and the Allegheny Forest Alliance filed an emergency motion to stay the settlement (No. 08-323 Erie). Judge Sean J. McLaughlin denied the motion and dismissed the lawsuit.

On June 1 the Forest Service published a Notice of Intent in the Federal Register to prepare a Forest-Wide Oil and Gas Development Transition EIS for Allegheny National Forest to analyze all proposed developments between now and 2013.

Now POGAM, Minard Run Oil Co., Allegheny Forest Alliance and Warren County, PA, have filed another lawsuit claiming that the Forest Service had overstepped its authority by requiring environmental analyses to be done in Allegheny National Forest.

That lawsuit has been designed for placement in the U.S. District Court's Alternative Dispute Resolution Program, according to court records.

POGAM Executive Director Steve Rhoads said the move was a "mediation action," adding, "We're going to enter it with our eyes open."

A dispute resolution could be done through mediation between the parties, early neutral evaluation or arbitration. Each side is directed to select which form of resolution is preferred.

Mediation would involve having a neutral person, selected by the parties, help reach an agreement acceptable to both sides. In an early neutral evaluation, an impartial attorney with expertise on the subject is selected by the parties to provide a nonbinding evaluation of the case. That attorney would then assist the parties in reaching an agreement. Through arbitration, the case would be given to an impartial third party, or a panel of three, for a binding determination to settle the claims.

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