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Environmental Group Sues Pennsylvania Over Forest Leasing

An environmental group is suing Pennsylvania Gov. Tom Corbett, claiming that his administration is misusing revenue from Marcellus Shale development on state lands. Although Corbett is being sued, most of the actions cited in the litigation first were undertaken by his predecessor Ed Rendell.

In the lawsuit filed Tuesday in Commonwealth Court, the Pennsylvania Environmental Defense Fund (PEDF) claims that the Corbett administration have not honored the intention of the state's Oil and Gas Lease Fund, a storehouse created in 1955 to hold rents and royalties collected from energy operations on state-owned lands. Although many of the decisions cited in the lawsuit date to the Rendell administration, the case on file is against Corbett, Budget Secretary Charles Zogby and Treasury Secretary Robert McCord.

The PEDF claims that when the Rendell administration, of which Corbett at one time was attorney general, leased 64,000 acres of state forests in 2008 and 2010 to fill budget holes, it did so despite concerns about the impact of additional leasing from the Department of Conservation and Natural Resources (DCNR), the agency responsible for managing state land.

By using $180 million from the fund to fill a budget gap, rather than to restore state parks and forests, the state violated its responsibility to protect public resources, the PEDF claims. That claim arises from changes Rendell made in 2009, which gave the General Assembly the authority to allocate money from the fund, a responsibility traditional given to DCNR.

"By diverting use of the Oil and Gas Lease Fund away from DCNR's control, DCNR cannot properly evaluate the cumulative impact of drilling on state lands, acquire gas rights beneath state parks to protect those parks from gas drilling, or acquire lands to replace those lands no longer available for public enjoyment because of the drilling," the lawsuit claims. The group also claims that Corbett is requiring DCNR to increasingly fund its day-to-day operations from the Oil and Gas Lease Fund, rather than the state General Fund.

That issue is on the forefront of ongoing budget hearings. When asked about the use of the fund for agency operations, DCNR Secretary Richard Allen said the fund was created to address recreation, conservation, flood control and dams, and DCNR carried out those functions on both an administrative and programmatic level (see Shale Daily, March 7). The funding question remains a point of debate because the recent approved impact fee on unconventional gas drilling would only bring a small amount of money to DCNR. Some critics of the fee wanted a severance tax that would have generated millions annually.

"We're confident that all expenditures from the oil and gas fund have complied with the state law," Erik Shirk, a spokesman for Corbett, told NGI's Shale Daily. Shirk also noted that no transfers from the fund have been made without the approval of the General Assembly and that none of the transfers mentioned in the legal filings took place during the Corbett Administration. "So it's a little curious why it's happening now," he said.

PEDF indicated in March 2010 that it intended to file a lawsuit about the leasing, and at that time attorney John Childe wrote that "there is no need to require additional leasing of state forest land. The imposition of a severance tax would more than make up for the proposed leasing."

After the General Assembly failed to pass a severance tax bill in 2010 that included a moratorium on leasing additional forest lands, Rendell imposed a moratorium by executive order shortly before leaving office (see Shale Daily, Oct. 27, 2010). Soon after taking office Corbett indicated he would gradually re-open state forests for drilling, but he has yet to take steps in that direction (see Shale Daily, Nov. 15, 2010).

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