CLARION — The U.S. Forest Service hasn’t OK’d any new gas or oil wells in the Allegheny National Forest for almost two months, delaying oil and gas development and causing at least one company to consider drilling without federal approval.

Leanne Martin, Allegheny National Forest supervisor, said no “notices to proceed” have been issued for new wells since Jan. 16, when the Forest Service’s regional office in Milwaukee took over the local well review process.

“Milwaukee hasn’t gotten back to us on any reviews it’s doing,” she said, at the last of three public meetings last week.

“And we have not been told when that will end.”

The unofficial moratorium on well approvals is occurring as the Forest Service grapples with environmental concerns caused by the approximately 12,000 wells already operating in the state’s only national forest, located in Elk, Forest, McKean and Warren counties, 100 miles northeast of Pittsburgh.

Forest officials have begun a detailed study of the cumulative impacts of those wells and last week held three public meetings attended by more than 225 people to discuss proposed rules for regulating well drilling.

“One of the things the proposed rules will address is the clarification of our authority to regulate the wells,” Ms. Martin said at the third meeting. “We’re not proposing denying access to privately held mineral rights because we have no legal right to do so.

“But in the areas of road building, stream, wildlife and heritage area protections there will be additional measures we will codify specific to the Allegheny National Forest.”

As oil and gas prices have increased over the last few years, oil and gas drilling has boomed in the 513,000-acre national forest, where the surface rights are owned by the federal government but 93 percent of the underlying mineral rights remain in private hands. Last year, 984 new wells were drilled in the forest and 1,300 were drilled in 2007.

Environmental groups have said that’s too many because of the cumulative impacts of the drilling on streams and groundwater, forest fragmentation, erosion and endangered and threatened wildlife populations.

But Ted Howard, vice president of Howard Drilling Inc., of Mount Jewett, McKean County, said he may begin drilling eight new wells without getting a Forest Service “notice to proceed” because he owns the mineral rights and the delay is costing him money.

Nathaniel Parker, an attorney representing Howard Drilling, said the company is considering all its alternatives and drilling without getting a Forest Service “notice to proceed” is one of them.

Last month, Steve Rhoads, president of the Pennsylvania Oil and Gas Association, the industry trade association, also indicated that operators could decide to start drilling without getting the federal notices if the delay stretches into spring.

“If drilling were stopped for the whole year we figure there would be $100 million in lost income on the forest,” said Mr. Howard. “We’ve owned these [mineral] rights for 100 years. It’s cut and dried.”

He said his privately owned subsurface mineral rights were established by deed prior to the establishment of the Allegheny National Forest and explicitly reserved at that time. Unless the government or some environmental group wants to buy those mineral rights they have no standing to deny him access to his gas and oil reserves.

“The trouble with people is instead of running off at the mouth, they should bring a checkbook and buy us out,” said Mr. Howard.

But the dispute over how much regulation the federal government can impose on private subsurface owners with superior property rights will more likely be settled in court. Three lawsuits have been filed by drilling companies and environmental groups have filed another.

One of those lawsuits, filed in U.S. District Court in Pittsburgh by Duhring Resource Co., based in Sheffield, Warren County, was partially dismissed last week.

The lawsuit, joined by the Pennsylvania Oil and Gas Association, alleges that the company has an unrestricted right to develop its privately owned mineral resources and that Forest Service has discouraged oil and gas development in the national forest and diminished the company’s privately owned mineral rights and profits.

U.S. District Judge Gary Lancaster dismissed five of Duhring’s 12 claims and part of a sixth. The Allegheny Defense Project, opponents of drilling in the national forest, said the ruling “dealt a serious blow to the oil and gas industry.”

“This is a significant victory for the Allegheny and the wildlife species that call it home,” said Ryan Talbott, the project’s forest watch coordinator.

The Forest Service declined comment, noting that the case remains in litigation.
Don Hopey can be reached at dhopey@post-gazette.com or 412-263-1983.