Tuesday, March 31, 2009
PITTSBURGH (AP) — The U.S. Forest Service is illegally refusing to allow energy companies to drill for gas and oil in the Allegheny National Forest even though they own the mineral rights, an energy company claimed in a lawsuit.
Catalyst Energy Inc. claimed the Forest Service recently began requiring it and other companies to obtain a “notice to proceed” before drilling but is not issuing the notices.
Catalyst contends the notice is “unauthorized and illegal, and has been unilaterally created by the [forest service] without following any rule-making procedures and without any statutory or regulatory authority,” according to the suit filed Friday in U.S. District Court in Pittsburgh.
Catalyst, based in the Pittsburgh suburb of Cranberry Township, claims it is only required under law to provide the forest service 60 days’ notice before it plans to drill. It is asking a judge to stop the forest service from interfering with its drilling rights.
The suit is the latest development concerning drilling in Pennsylvania’s only national forest, 800 square miles that lie in Elk, Forest, McKean and Warren counties.
While the federal government owns the surface, more than 90 percent of the mineral rights that lie underground are privately owned. The government did not buy the mineral rights when the forest was created nearly 90 years ago.
Disputes over whether the Forest Service can regulate drilling have led to several other lawsuits recently as demand for oil has spurred drilling in the Allegheny.
From 2005 to 2008, 3,726 wells were drilled or approved, according to the forest service. In the four years prior, 1,442 wells were approved. The forest service estimates some 11,000 to 12,000 oil and gas wells are in production.
Catalyst has developed more than 580 wells in the forest, according to its suit.
In July and August 2007, Catalyst informed the forest service that it planned to drill without having a notice to proceed for one project. The forest service threatened to arrest any Catalyst employees or representatives that tried to drill, the suit said.
“What’s at issue here is not so much regulation of their activities, it’s deprivation of their property rights,” Gary P. Hunt, an attorney for Catalyst, said Monday.
The forest service did not immediately respond to a request for comment on the suit.
Catalyst’s suit said it has leases for gas rights and stands to lose money if it does not drill within certain time frames. One of the leases requires it to drill 20 wells by May 1.
Hunt could not put a price on how much not drilling is costing Catalyst because not all wells are profitable and the price of oil fluctuates.