Gas wells on public land get federal scrutiny
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The U.S. Department of the Interior is reviewing whether any of the 175 Marcellus Shale gas wells drilled in Pennsylvania state forests or other permitted or planned well developments on publicly owned land violates a 1964 federal land conservation law.
Interior's National Park Service, which administers the U.S. Land and Water Conservation Act, has asked Pennsylvania's conservation and environmental departments and fish and game commissions to provide it with maps showing existing gas well permits and planned gas well development areas on land acquired or developed using the act's funding program.
The law establishing the Land and Water Conservation Fund protects public park, forest and recreation lands acquired or developed with the program's money from "conversion" to non-recreation use, like oil and gas wells, without prior approval by the Park Service. If such a conversion occurs, the state must buy land of at least equal value to compensate, and it must use any revenue from leases or royalties on such conversion lands for conservation and recreation purposes only.
The Park Service has the authority to grant a waiver for conversions to non-recreation use. Pennsylvania, which has leased 700,000 acres of the state's 2.1 million-acre forest system for oil and gas drilling -- more than 130,000 acres of that for Marcellus Shale deep wells -- has neither asked for such a conversion waiver nor been granted one, according to the Park Service.
It also hasn't purchased any additional land to compensate for "conversions," and has channeled much of the $383 million from three recent forest lease sales into the state's general fund to balance the budget.
Jack Howard, manager of the Park Service's State and Local Assistance Programs, requested in early July that Pennsylvania thoroughly investigate the impact of gas well development on Conservation Fund project areas and report the findings to the Park Service.
"We're requiring a complete assessment of the overall inventory of projects so we can determine if any have been affected by drilling," said Mr. Howard, who estimated there are 40,000 Conservation Fund projects nationwide with more than 1,550 of those in Pennsylvania.
Over the years, Pennsylvania has received $162 million from the Conservation Fund, including $1.2 million last year for property purchase and development of state forests and parkland, state game lands, Fish and Boat Commission properties, including lakes, and county and municipal park and recreation lands.
Mr. Howard, in a July 19 letter to the Sierra Club, which first questioned the impact of Marcellus development on Conservation Fund project lands, said Park Service regulators "share similar concerns about the potential adverse impacts any current and proposed drilling for natural gas and oil could have on Pennsylvania's state parks, forests and gamelands. ... "
In a phone interview last week, Mr. Howard said the Conservation Funds lands issue has also come up in West Virginia, where Marcellus Shale drilling is also taking place, and in other shale gas plays in Western states.
He said the Park Service has not set a deadline for Pennsylvania's agencies to provide the information it requested.
The Sierra Club has called on the state Department of Conservation and National Resources and the Department of Environmental Protection, to halt leasing and issuing of drilling permits in state forests and parks until it can be determined which public lands were purchased or developed with federal funding.
In a letter sent to the Park Service, the DEP and DCNR at the beginning of July, the Sierra Club identified 19 state parks that received Conservation Fund money and are located above the Marcellus Shale's geologic footprint. Among them were Ohiopyle State Park in Fayette County where pre-drilling seismic investigations are under way and where a Nature Conservancy report projects several drilling pads will be built.
The Nature Conservancy report projects that more than 1,000 Marcellus Shale wells eventually will be drilled in the state's forests.
Craig Holt Segall, an attorney with the Sierra Club Environmental Law Program, said his reading of state park and forest maps and land purchase agreements indicates that the federal fund money has been used to purchase or develop large swaths of at least 13 state forests. "The state DEP is issuing permits and taking agency action that results in the potential conversion of state lands," Mr. Segall said. "It doesn't get to punt its responsibilities under that federal funding program, allow drilling anywhere and not provide compensation for the land disturbances."
But the DCNR, which is responsible for administering the federal Conservation Fund program in the commonwealth, is confident it is in compliance with federal requirements, according to department Secretary Richard Allan.
"We have not identified any basis for asserting that Marcellus Shale gas extraction does not satisfy the National Park Service's substantive requirements for such extraction," Mr. Allan said. "We are open to meeting with the park service to talk about this issue."
There are 117 state parks, 61 of them located in the two-thirds of the commonwealth lying above the Marcellus Shale, a mile-deep, 380-million-year-old sedimentary formation that contains trillions of cubic feet of recoverable natural gas, and is now believed to be the second largest known shale gas play in the world.
Katy Gresh, a DEP spokeswoman, said any legal issues facing DCNR, as owner of the public lands, don't affect the validity of oil and gas permits issued by DEP.
Christina Novak, a DCNR spokeswoman, said it hasn't yet identified how much federal money the DCNR has spent on parks and forest lands, where those lands are located or which properties have been impacted by well drilling.
"We are taking this issue very seriously," she said.
Marcellus Shale drilling development also could affect county and municipal parks and recreation venues that have received Conservation Fund money. The DCNR also is supposed to determine if any wells or well permits or plans will affect those properties, which are numerous.
For example, in Washington County, a hotbed of Marcellus Shale drilling and development activity, 26 parks or recreation venues have received Conservation Fund money, including the county's Mingo Creek Park and township and neighborhood parks in Cecil.
In Allegheny County, 21 municipal and community parks and recreation venues have received Conservation Fund money, including the county's Settler's Cabin Park, Pittsburgh's North Shore Park, Simmons Park in Bethel Park, Fall Run Park in Shaler and Knock Park in Forest Hills.
Ms. Novak did confirm that Conservation Fund money was used at Ohiopyle State Park, but "we have not reviewed those details." She said DCNR is focusing on state forest land already leased for oil and gas drilling, and noted that the department has not leased any state park lands for Marcellus gas development.
The DCNR has been forced to allow drilling of wells in a number of its parks because it doesn't own the underlying mineral rights, including oil and gas rights. It gets no compensation or royalty payments for those operations.
An example of that is the five wells drilled around Lake Wilhelm in Maurice K. Goddard State Park, Mercer County, where 15 more are planned. The 2,856-acre park, which attracts more than 200,000 visitors a year, is 70 miles north of Pittsburgh.
Those wells were drilled by Pittsburgh-based Vista Resources. More than 95 percent of the underlying mineral rights in the park are privately owned, and the state's position has been that it has no power to stop the owners from drilling to extract the gas.
John Quigley, DCNR secretary under Gov. Ed Rendell, said the Conservation Fund conversion issue wasn't high on his priority list because drilling activity was just beginning, but it's becoming more of a concern as more wells are drilled and the state leases more forest land.
"There is going to be a certain level of conversion with the current leases. And if more land is leased and surface area disturbed, that will compound the problem," Mr. Quigley said, referring to the Corbett administration's desire to lift a moratorium on new forest leases imposed by the Rendell administration.
In February, Gov. Corbett repealed a Rendell administration policy designed to minimize the environmental impact of deep shale drilling in the state's parks, but he's taken no action on the forest moratorium.
He said the state may also "have some area of exposure" in its use of the lease revenue to balance the state budget.
Ms. Gresh said use of the royalty money in the general fund budget occurred during the Rendell administration. But she also said that the Corbett administration believes the transfers "complied with the relevant statutory obligations."
All royalties from any state lands, including Conservation Fund properties, now go toward conservation and recreation, she said.
R. Timothy Weston, an attorney with K&L Gates in Harrisburg and former assistant deputy secretary who headed the forest and parks department in the old Department of Environmental Resources during the Thornburgh administration, said the issue will turn on what constitutes a "conversion."
He said there are no court cases in Pennsylvania addressing that issue, which is complicated by Pennsylvania's split estate property law that gives owners of the underlying mineral estate superior rights, including rights of access to their property.
"Federal law doesn't trump that property right," Mr. Weston said. "The state doesn't get any better or worse right than it had using one set of dollars or another [from the Conservation Fund]."
The state does not own the mineral rights under most of its parks but it does own them under 85 percent of its forests.
Also complicating the issue is the longtime federal and state policy promoting multiple use of the public forests for timbering, mineral extraction, and oil and gas drilling, along with recreation.
"There's a big difference between multiple use of the forest and conversion of the land for non-use," said Mr. Weston, adding that during his 15 years at DER he never heard a claim of conversion related to well drilling.
"If oil and gas drilling is part of the multiple-use policy," he said, "then I think the DCNR's argument has validity."
First Published September 25, 2011 12:00 am