A federal judge in Erie, PA, has refused to overturn a U.S. Forest Service (USFS) ban on surface and groundwater withdrawals in the Allegheny National Forest for oil and gas operations, asserting that laws protecting access to mineral rights are not applicable to water rights.

In his ruling on Friday, U.S. District Judge Sean McLaughlin also denied an industry request to hold the USFS in contempt, but he told the agency that it is required to process its Notice to Proceed (NTP) documents within 60 days. Failure to do, he warned, could marginalize the USFS.

“Unreasonable delay by the Forest Service beyond the 60-day period increases the likelihood that mineral owners will simply choose, as would be their right, to commence drilling activities prior to the completion of the interactive process,” McLaughlin said in his ruling. “As a result, in the absence of filing its own lawsuit, the Forest Service could lose its ability, with respect to any given well package, to supply meaningful input concerning issues it considers important to preserving the integrity of its servient estate.”

Appellees in the case — Bradford, PA-based Minard Run Oil Co. (MROC), the Pennsylvania Independent Oil and Gas Association (PIOGA), the Allegheny Forest Alliance and Warren County, PA — had argued that the USFS should be held in contempt for refusing to follow McLaughlin’s order from Dec. 15, 2009 to process requests by operators to drill in the forest (see Shale Daily, July 21, 2011a). The plaintiffs also accused the USFS of violating a 1980 federal law on surface landowner rights.

Although McLaughlin said the USFS processes 90-95% of its NTP documents within 60 days, and added that delays were “rare,” he found “some evidence to suggest that delay has replaced diligence as the hallmark of the Forest Service’s processing of drilling proposals.” But he added that PIOGA failed to prove that the USFS had brazenly violated his 2009 order.

MROC President Fred Fesenmyer and PIOGA President Louis D’Amico could not be reached for comment Tuesday.

In January a federal appeals court refused to reconsider its decision from September 2011 to throw out a ban on oil and gas drilling in the Allegheny National Forest (see Shale Daily, Jan. 6; Sept. 23, 2011). A three-judge panel from the court had ruled the USFS could not refuse to give operators permission to drill in the forest while an environmental impact study (EIS) was being conducted.

McLaughlin’s 2009 ruling said the USFS could not require oil and gas companies to prepare an EIS on their activities in the forest, nor could the USFS implement a forest-wide drilling ban there. But in June 2011 a forest supervisor told SWEPI LP — a Shell Oil Co. affiliate and a PIOGA member — that the company did not have the right to withdraw groundwater from the forest for hydraulic fracturing at three nearby natural gas wells (see Shale Daily, July 21, 2011b).

The case is Minard Run Oil Company v. United States Forest Service et al. (Case No. 1-09-CV-125).