Energy Operators Contend Environmental Groups are Wrong in Pennsylvania Energy Case

By William Perry Pendley

DENVER - Energy operators in Pennsylvania, after a victory before the U.S. Court of Appeals for the Third Circuit in Philadelphia in September 2011, which affirmed the December 2009 ruling of a Pennsylvania federal district court regarding the property rights of oil and gas operators, on May 1 replied to an attempt by environmental groups to void both rulings  (Minard Run Oil Company v. United States Forest Service, No. 10-1265 [3rd Cir.]).

The energy operators sued the U.S. Forest Service for settling a lawsuit with the groups. In its ruling, the federal district court barred the agency from implementing its settlement agreement with the three groups, prohibited it from doing studies on the use of privately owned oil, gas, and mineral rights beneath the Allegheny National Forest (ANF), and lifted its moratorium on all oil and gas drilling in the ANF. In late 2011, the operators prevailed at the Third Circuit. Minard Run Oil Company and the Pennsylvania Independent Oil and Gas Association (PIOGA) are represented by a legal team of Mountain States Legal Foundation (MSLF), the Washington, D.C., law firm of Crowell and Moring, and the Wolford Law Firm of Erie, Pa.

"The district court got it right and the Third Circuit affirmed its ruling; both must now be applied permanently and the groups' motion for summary judgment denied." said William Perry Pendley, MSLF president.

The ANF, which covers 500,000 acres in Elk, Forest, McKean, and Warren Counties in northwestern Pennsylvania, comprises lands that were once privately owned and were purchased under the 1911 Weeks Act during the 1920s. Because the United States bought only the surface estate, most of the mineral rights in the ANF are privately owned. Thus, there is no contractual basis for any federal government regulatory authority over outstanding oil, gas, and mineral (OGM) rights in the ANF.

Although, under Pennsylvania law, owners of OGM estates have the right to go onto the surface to access their property and to use as much of the surface as necessary to remove it, the law provides for accommodation; therefore, OGM rights must be exercised with "due regard" for the interests of surface owners. That the United States owns the surface does not change the law. In accordance with the Forest Service Manual, the Forest Service has only limited rights as to the use of OGM rights within the ANF. This was recognized by a Pennsylvania federal district court in a 1980 ruling.

For decades, the Forest Service adhered to the law and its policy and responded to an operator's 60-day notice of its plans with consultations and a notice to proceed. A notice to proceed, however, is not a decision to allow oil and gas development because the Forest Service has no regulatory power over OGM rights. In 2007, the Forest Service began to reverse this policy.

Mountain States Legal Foundation, founded in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system. Its offices are in suburban Denver.

For more information about LexisNexis products and solutions, connect with us through our corporate site.