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Drilling moratorium creating a huge void |
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Written by Publisher
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Wednesday, 26 August 2009 |
Photo by Ted Lutz
Wally Howard, left, and Ted Howard, right, both of Mt. Jewett leave the U.S. Courthouse in Erie after a second day of testimony Tuesday at a hearing linked with a lawsuit involving oil and gas drilling in the Allegheny National Forest. The Howards, who are cousins and own Howard Drilling, are leaving the courthouse with Darryl Pierce, center, of the Papco oil and gas production company of Warren.
By Ted Lutz
Republican Staff
ERIE – The current moratorium on drilling for gas and oil in the Allegheny National Forest (ANF) is creating a huge economic void for the Kane region.
According to Erie attorney Matthew Wolford, the region stands to lose at least $75 million in economic benefits from new drilling projects, which now are on hold pending the completion of a Forest Service environmental study.
Wolford is an attorney for plaintiffs who are asking the district federal court for a preliminary injunction to block the environmental study as a "pre-condition" for future drilling. The plaintiffs include the Kane-based Allegheny Forest Alliance, the Pennsylvania Oil and Gas Association, the Minard Run Oil Co. of Bradford and Warren County.
Another all-day hearing on the motion for the injunction was held Tuesday at the U.S. Courthouse in Erie before Federal Judge Sean McLaughlin. The judge scheduled the "evidentiary" hearing Monday and Tuesday to gather information before making his ruling on the motion.
About 3:40 p.m. Tuesday, Judge McLaughlin recessed the hearing when it was apparent that more questioning is coming from the attorneys for the plaintiffs. The hearing was scheduled to resume this morning.
Wolford gave his estimate of the economic loss for the region due to the drilling moratorium as he questioned Forest Supervisor Leanne Marten during her three-hour appearance on the witness stand.
Wolford said plans for 440 oil and gas wells have been put on hold pending the completion of the "transition" environmental impact statement for drilling in the ANF.
Using an estimate of $150,000 per well, he said $66 million would be "lost" revenue for the region. In addition, he said the moratorium also is affecting the development of two deep Marcellus Shale gas wells, which he said would cost $4.5 million each.
These are the first Marcellus Shale wells proposed within the ANF and may require a separate environmental study, Marten said.
In her testimony, Marten said additional "seasonal" workers have been hired to conduct "field studies" and help "expedite" the preparation of the "transition" environmental impact statement (TEIS). She said the Forest Service is on target to complete the study by April 2010.
The TEIS is part of a settlement of a lawsuit filed last year by the Allegheny Defense Project, the Sierra Club and Forest Service Employees for Environmental Ethics (FSEEE).
The plaintiffs are seeking the preliminary injunction to block the TEIS, which is considered an environmental analysis under the National Environmental Policy Act (NEPA) of 1989.
While placing a moratorium on requests for new wells until the TEIS is completed next year, the Forest Service agreed to "immediately" begin to issue "notices to proceed" for 54 drilling "packages." These "packages" represent 588 wells, two pipelines and one seismic testing line. A total of 22 companies are involved in the 54 "packages."
The issuance of the "notices to proceed" in April ended an unofficial three-month moratorium on new drilling in the 513,000-acre forest where 93 percent of the subsurface mineral rights is privately owned.
In her testimony, Marten said the TEIS will cover packages for 2,400 wells submitted by June 22 along with "future proposals."
Judge McLaughlin wondered why the environmental study will cover sites "where you have no proposals at all." He said that it appears the Forest Service is "doing the predicting" for sites for future wells in the ANF.
"When will the curtain come down?" he asked.
Marten said the TEIS will cover sites where development is expected to take place "based on history" as well as sites identified during "discussions with companies."
Although the TEIS is expected to be released in April 2010, new drilling projects won't begin immediately and could be delayed for some time. After the TEIS is final, it is subject to an appeal process that could run until July 2010. Litigation over the TEIS also could hold up drilling.
Even if the TEIS is finalized without appeals or litigation, there will be drilling delays as companies scramble to meet other requirements for their "notice to proceed" from the Forest Service, it was pointed out Tuesday.
Marten said the "uncertainty of potential impact of surface resources" in the ANF led the Forest Service to go with the NEPA-based TEIS for drilling.
Others who testified Tuesday included David Wright, who served as ANF supervisor from 1987-92; Ernie Rozelle of Warren, who handled ANF oil and gas projects during his career with the Forest Service; and David Fredley, a retired federal government employee who was involved in several national oil and gas issues.
Wright said he had good cooperation with drilling companies during his time as the ANF supervisor.
"If things didn't look right, we worked together to change it," he said.
Wright said the issuance of the "notice to proceed" to drillers "bothered me" because the Forest Service is not "a regulatory agency." It has been pointed out that drilling companies need permits from the state Department of Environmental Protection (DEP) before they can submit project proposals to the Forest Service. The DEP, a regulatory agency, doesn't issue the permits until certain environmental conditions are met, it has been noted.
Rozelle said his experience with drillers during his career with the ANF staff was "certainly cooperative."
He said a forest-wide environmental analysis on drilling was "never thought of" because there were few problems with the activity. The Forest Service still maintains that it will not "deny reasonable access" to private mineral rights.
In addition to the TEIS, the Forest Service is in the process of preparing a separate Supplemental Environmental Impact Statement (SEIS) on drilling to augment the 2007 Forest Plan.
While Marten said the Forest Service is "on track" to complete the TEIS by April, Fredley has his doubts.
"In my opinion, it would take multiple years to do an environmental analysis," Fredley said in his testimony. He said appeals are "common" and could lead to "revisions" that would put the environmental document back to square one on the timetable.
Judge McLaughlin has not indicated when he would rule on the motion for the preliminary injunction.
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Last Updated ( Tuesday, 20 October 2009 )
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