[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
H.R. 3881, TO AMEND THE MINERAL LEASING ACT TO REPEAL PROVISIONS
RELATING ONLY TO THE ALLEGHENY NATIONAL FOREST, ``COOPERATIVE
MANAGEMENT OF MINERAL RIGHTS ACT OF 2015''
=======================================================================
LEGISLATIVE HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
OF THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
Tuesday, April 19, 2016
__________
Serial No. 114-38
__________
Printed for the use of the Committee on Natural Resources
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COMMITTEE ON NATURAL RESOURCES
ROB BISHOP, UT, Chairman
RAUL M. GRIJALVA, AZ, Ranking Democratic Member
Don Young, AK Grace F. Napolitano, CA
Louie Gohmert, TX Madeleine Z. Bordallo, GU
Doug Lamborn, CO Jim Costa, CA
Robert J. Wittman, VA Gregorio Kilili Camacho Sablan,
John Fleming, LA CNMI
Tom McClintock, CA Niki Tsongas, MA
Glenn Thompson, PA Pedro R. Pierluisi, PR
Cynthia M. Lummis, WY Jared Huffman, CA
Dan Benishek, MI Raul Ruiz, CA
Jeff Duncan, SC Alan S. Lowenthal, CA
Paul A. Gosar, AZ Matt Cartwright, PA
Raul R. Labrador, ID Donald S. Beyer, Jr., VA
Doug LaMalfa, CA Norma J. Torres, CA
Jeff Denham, CA Debbie Dingell, MI
Paul Cook, CA Ruben Gallego, AZ
Bruce Westerman, AR Lois Capps, CA
Garret Graves, LA Jared Polis, CO
Dan Newhouse, WA Wm. Lacy Clay, MO
Ryan K. Zinke, MT
Jody B. Hice, GA
Aumua Amata Coleman Radewagen, AS
Thomas MacArthur, NJ
Alexander X. Mooney, WV
Cresent Hardy, NV
Darin LaHood, IL
Jason Knox, Chief of Staff
Lisa Pittman, Chief Counsel
David Watkins, Democratic Staff Director
Sarah Lim, Democratic Chief Counsel
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
DOUG LAMBORN, CO, Chairman
ALAN S. LOWENTHAL, CA, Ranking Democratic Member
Louie Gohmert, TX Jim Costa, CA
Robert J. Wittman, VA Niki Tsongas, MA
John Fleming, LA Matt Cartwright, PA
Glenn Thompson, PA Donald S. Beyer, Jr., VA
Cynthia M. Lummis, WY Ruben Gallego, AZ
Dan Benishek, MI Lois Capps, CA
Jeff Duncan, SC Jared Polis, CO
Paul A. Gosar, AZ Vacancy
Raul R. Labrador, ID Vacancy
Paul Cook, CA Vacancy
Garret Graves, LA Vacancy
Ryan K. Zinke, MT Vacancy
Jody B. Hice, GA Vacancy
Alexander X. Mooney, WV Raul M. Grijalva, AZ, ex officio
Cresent Hardy, NV
Rob Bishop, UT, ex officio
----------
CONTENTS
----------
Page
Hearing held on Tuesday, April 19, 2016.......................... 1
Statement of Members:
Lamborn, Hon. Doug, a Representative in Congress from the
State of Colorado.......................................... 1
Prepared statement of.................................... 3
Lowenthal, Hon. Alan S., a Representative in Congress from
the State of California.................................... 4
Prepared statement of.................................... 5
Thompson, Hon. Glenn, a Representative in Congress from the
State of Pennsylvania...................................... 6
Prepared statement of.................................... 8
Statement of Witnesses:
Casamassa, Glenn, Association Deputy Chief, National Forest
System, U.S. Forest Service, U.S. Department of
Agriculture, Washington, DC................................ 15
Prepared statement of.................................... 16
Cline, Mark, President, Pennsylvania Independent Petroleum
Producers Association, Inc., Bradford, Pennsylvania........ 9
Prepared statement of.................................... 10
Furnish, Jim, Former Deputy Chief, U.S. Forest Service,
Washington, DC............................................. 16
Prepared statement of.................................... 17
Mayer, Craig, Secretary, Pennsylvania Independent Oil & Gas
Association, Warren, Pennsylvania.......................... 18
Prepared statement of.................................... 20
Shuffstall, Dearald ``Bud'', National Association of Royalty
Owners, Meadville, Pennsylvania............................ 11
Prepared statement of.................................... 13
Additional Materials Submitted for the Record:
Letter to Subcommittee from various organizations in
opposition of H.R. 3881.................................... 28
LEGISLATIVE HEARING ON H.R. 3881, TO AMEND THE MINERAL LEASING ACT TO
REPEAL PROVISIONS RELATING ONLY TO THE ALLEGHENY NATIONAL FOREST,
``COOPERATIVE MANAGEMENT OF MINERAL RIGHTS ACT OF 2015''
----------
Tuesday, April 19, 2016
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, DC
----------
The subcommittee met, pursuant to notice, at 2:19 p.m., in
room 1324, Longworth House Office Building, Hon. Doug Lamborn
[Chairman of the Subcommittee] presiding.
Present: Representatives Lamborn, Thompson, Gosar, Hice,
Hardy; Lowenthal, and Costa.
Mr. Lamborn. The Subcommittee on Energy and Mineral
Resources will come to order. We are here today to hear H.R.
3881, introduced by Representative Glenn Thompson of
Pennsylvania, to amend the Mineral Leasing Act to repeal
provisions relating only to the Allegheny National Forest, the
``Cooperative Management of Mineral Rights Act of 2015.''
Under Committee Rule 4(f), any oral opening statements at
hearings are limited to the Chairman and Ranking Minority
Member, and the Vice Chair and a designee of the Ranking
Member. This will allow us to hear from our witnesses sooner
and help Members keep to their schedules.
Therefore, I ask unanimous consent that all other Members'
opening statements be made part of the hearing record if they
are submitted to the Subcommittee Clerk by 5:00 p.m. today.
[No response.]
Mr. Lamborn. Hearing no objection, so ordered. I now
recognize myself for my opening statement.
STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Mr. Lamborn. This afternoon's hearing is on H.R. 3881,
introduced by my colleague from Pennsylvania, Representative
Glenn Thompson. This legislation addresses the U.S. Forest
Service's long-standing attempt to usurp regulatory
jurisdiction over private property rights in Northwestern
Pennsylvania and the Allegheny National Forest.
Production of oil and natural gas in the Allegheny region
has been occurring for over a century. In fact, long before
Edwin Drake mechanically drilled the first commercial oil well
in Titusville, Pennsylvania in 1859, Native Americans in the
region skimmed crude oil from natural seepage and used it for
medicinal purposes. While the Drake well sparked the first oil
boom in the United States, the dawn of horizontal drilling,
paired with the age-old method of hydraulic fracturing, led to
the most recent boom in the Marcellus Shale.
In less than a decade, Pennsylvania has become the second
largest producer of natural gas in the United States, behind
Texas, and has contributed toward our Nation's renewed status
in leading global production of energy. Unfortunately, the
Commonwealth of Pennsylvania's success also put it directly in
the crosshairs of environmental activists focused on banning
American energy production in this region and elsewhere.
All of the land that the Allegheny National Forest sits on
was once privately owned. When the Federal Government acquired
the land to establish a new national forest in 1923, most of
the acquisition was of surface rights, with most of the
subsurface mineral rights remaining in private ownership.
Today, 93 percent of the subsurface mineral estate in the
Allegheny National Forest is in private hands and is regulated
under state law.
For decades, the Forest Service worked cooperatively with
the state and energy producers in accordance with Federal and
state laws. Yet in 2007, the Forest Service changed the game,
eventually proposing new rules to apply NEPA to private mineral
rights. Soon after, a sweetheart ``sue-and-settle'' deal
occurred in which the Forest Service settled with Sierra Club
and other environmental groups, agreeing to apply a multitude
of new Federal regulations on these private mineral rights.
As a result of the settlement, the Forest Service also
enacted an outright ban on future oil and natural gas
development in the Allegheny until new regulations were
finalized. Thankfully, Federal courts eventually struck down
this regulatory over-reach, but not without a very real cost to
many families and businesses in the Allegheny region.
Given the vast regulatory over-reach we have seen under
this Administration, it is clear that the need to further rein
in the Forest Service is very necessary. The way the Forest
Service sought to trample upon the rights of private property
owners and state jurisdiction in this instance is a cautionary
tale for every single parcel of land managed by the Federal
Government.
My colleague's legislation should be a model for
eliminating statutory language that provides enough leeway for
Federal agencies to run roughshod over private property rights.
This bill will also help prevent the Forest Service from
manipulating our broken regulatory system in the future to
prevent the development of affordable energy upon which
American families and businesses currently rely.
In his book, ``The Prize,'' Daniel Yergin includes a quote
from the mid-19th century on the virtues of Pennsylvania's
newfound oil resources: ``It is the light of the age . . . the
brightest, and yet the cheapest in the world; a light fit for
Kings and Royalists, and not unsuitable for Republicans and
Democrats.'' I would say this statement still holds true. The
safe and responsible development of American energy throughout
our Nation enjoys support from responsible members of both the
Republican and Democratic parties, from Pennsylvania to Texas,
to the shores of California.
These resources will remain a fundamentally important
energy source for American families, manufacturers, and
businesses far into the future. The current regulatory
environment is making it increasingly difficult and extremely
costly to produce this much-needed energy in our Nation. In
this instance, I am glad that the courts were able to prevent
such over-reach from shutting down energy production on the
Marcellus. Unfortunately, other areas of our country have not
been so lucky.
With that, I look forward to hearing the testimony from our
witnesses.
[The prepared statement of Mr. Lamborn follows:]
Prepared Statement of the Hon. Doug Lamborn, Chairman, Subcommittee on
Energy and Mineral Resources
This afternoon's hearing is on H.R. 3881, the ``Cooperative
Management of Mineral Rights Act,'' introduced by my colleague from
Pennsylvania, Representative Glenn Thompson. This legislation addresses
the U.S. Forest Service's long-standing attempt to usurp regulatory
jurisdiction over private property rights in Northwestern Pennsylvania
in the Allegheny National Forest.
Production of oil and natural gas in the Allegheny region has been
occurring for over a century. In fact, long before Edwin Drake
mechanically drilled the first commercial oil well in Titusville,
Pennsylvania in 1859, Native Americans in the region skimmed crude oil
from natural seepage and used it for medicinal purposes. While the
Drake well sparked the first oil boom in the United States, the dawn of
horizontal drilling, paired with the age-old method of hydraulic
fracturing, led to the most recent boom in the Marcellus Shale.
In less than a decade, Pennsylvania has become the second largest
producer of natural gas in the United States behind Texas--and has
contributed toward our Nation's renewed status in leading global
production. Unfortunately, the Commonwealth of Pennsylvania's success
also put it directly in the crosshairs of environmental activists
focused on banning American energy production in this region and
elsewhere.
All of the land that the Allegheny National Forest sits on was once
privately owned. When the Federal Government acquired the land to
establish a new National Forest in 1923, most of the acquisition was of
surface rights--with most of the subsurface mineral rights remaining in
private ownership. Today, 93 percent of the subsurface mineral estate
in the Allegheny National Forest is in private hands, and is regulated
under state law. For decades the Forest Service worked cooperatively
with the state and energy producers in accordance with Federal and
state laws. Yet in 2007, the Forest Service changed the game--
eventually proposing new rules to apply the National Environmental
Policy Act (NEPA) to private mineral rights.
Soon after, a sweetheart ``sue and settle'' deal occurred in which
the Forest Service settled with Sierra Club and other environmental
groups, agreeing to apply a multitude of new Federal regulations on
these private mineral rights. As a result of the settlement, the Forest
Service also enacted an outright ban on future oil and natural gas
development in the Allegheny until new regulations were finalized.
Thankfully, Federal courts eventually struck down this regulatory
over-reach, but not without a very real cost to many families and
businesses in the Allegheny region. Given the vast regulatory over-
reach we have seen under this Administration, it is clear that need to
further rein in the Forest Service is very necessary. The way the
Forest Service sought to trample upon the rights of private property
owners and state jurisdiction in this instance is a cautionary tale for
every single parcel of land managed by the Federal Government.
My colleague's legislation should be a model for eliminating
statutory language that provides enough leeway for Federal agencies to
run roughshod over private property rights. This bill will also help
prevent the Forest Service from manipulating our broken regulatory
system in the future to prevent the development of affordable energy
upon which American families and businesses currently rely.
In his book ``The Prize,'' Daniel Yergin includes a quote from the
mid-19th century on the virtues of Pennsylvania's newfound oil
resources: ``It is the light of the age . . . the brightest and yet the
cheapest in the world; a light fit for Kings and Royalists and not
unsuitable for Republicans and Democrats.''
I would say this statement still holds true. The safe and
responsible development of American energy throughout our Nation enjoys
support from both Republicans and Democrats, from Pennsylvania, to
Texas, to the shores of California. These resources will remain a
fundamentally important energy source for American families,
manufacturers and businesses far into our future. The current
regulatory environment is making it increasingly difficult and
extremely costly to produce this much-needed energy in our Nation. In
this instance I am glad that the courts were able to prevent such over-
reach from shutting down energy production on the Marcellus.
Unfortunately, other areas of our country have not been so lucky.
With that, I look forward to hearing the testimony from our
witnesses.
______
Mr. Lamborn. I now recognize the Ranking Minority Member
for a statement.
STATEMENT OF THE HON. ALAN S. LOWENTHAL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Dr. Lowenthal. Thank you very much, Mr. Chairman. I have
some very significant concerns about the legislation before us
today. I understand the sponsor's interest in trying to protect
private oil and gas rights, and I certainly respect those
rights. But I also respect the rights of surface landowners,
who in this case are the American people. And we certainly
should not be stripping away those rights just to make it a
little easier for oil and gas companies.
Unfortunately, that appears to be all that this bill is
about. This issue started back in 1979, when the forest rangers
at the Allegheny National Forest discovered that an oil company
was building roads and drilling in the Allegheny without having
provided any notice whatsoever. Worse, they were drilling on
land that was being managed for hunting, fishing, and wildlife
habitat. The Forest Service had no opportunity to make sure
that the forest resources were not damaged unnecessarily in the
process of drilling.
The Forest Service also was unable to properly market the
timber that the oil company cut down to build the roads and the
well pad. So, the Forest Service sued the company and won. The
ruling required the oil company to provide information to the
Forest Service at least 60 days before doing any additional
drilling.
Those requirements became standard operating procedure for
the Forest Service in the 1980s, and were put into law by the
Energy Policy Act of 1992. It is that language that this bill
would eliminate.
This bill is unnecessary, since the courts have been very
clear that the Forest Service deserves this advance notice. And
I am concerned that future courts could interpret this
legislation to indicate that it is the intent of Congress that
companies do not have to provide any advance notice. Then those
companies would be allowed to build roads and drill wells
without telling anyone in charge of protecting the forest.
This could go far beyond the Allegheny, too, since it could
set a precedent that would apply to all private minerals
underneath national forests, nationwide. I do not see why it is
necessary to take that kind of risk, particularly when recent
court cases have severely limited the authority of the Forest
Service in these situations.
According to the courts, the Forest Service cannot say no
to companies wanting to drill on their private mineral rights.
I disagree, but that is not the point we are discussing here
today. The point is, the oil companies won, so there is no need
for legislation that supposedly protects their interests. The
courts have done it for them, and there is no indication that
the 60-day notice has hindered companies very much, if at all.
But the courts have also been very clear that the Forest
Service deserves this advance notice and it deserves the right
to make sure that our national forests are not being unduly
harmed by private companies seeking to drill for oil and gas.
The Forest Service is managing this land on behalf of the
American people, and the American people have the right to use
this land for recreation, hunting, fishing, bird watching, and
more, and have the right to expect they will be able to
continue to do so with their children and their grandchildren.
This bill appears to simply blindfold the Forest Service to
what is happening on their lands, and I think that is the wrong
direction to go.
Thank you, Mr. Chair, and I yield back the balance of my
time.
[The prepared statement of Mr. Lowenthal follows:]
Prepared Statement of the Hon. Alan S. Lowenthal, Ranking Member,
Subcommittee on Energy and Mineral Resources
Mr. Chairman, I have some significant concerns about the
legislation before us today.
I understand the sponsor's interest in trying to protect private
oil and gas rights, and I certainly respect those rights. But I also
respect the rights of surface landowners, who in this case are the
American people, and we certainly shouldn't start stripping away those
rights just to make things a little easier for oil and gas companies.
Unfortunately, that appears to be all that this bill does.
This issue started back in 1979, when the forest rangers at the
Allegheny National Forest discovered that an oil company was building
roads and drilling in the Allegheny without having provided any notice
whatsoever. Worse, they were drilling on land that was being managed
for hunting, fishing, and wildlife habitat.
The Forest Service had no opportunity to make sure that forest
resources were not damaged unnecessarily in the process of drilling.
The Forest Service also was unable to properly market the timber that
the oil company cut down to build the roads and well pad.
So the Forest Service sued the company and won. The ruling required
the oil company to provide information to the Forest Service at least
60 days before doing any additional drilling. Those requirements became
standard operating procedure for the Forest Service in the early 1980s,
and were put into law by the Energy Policy Act of 1992. It is that
language that this bill would eliminate.
This bill is unnecessary since the courts have been very clear that
the Forest Service deserves this advance notice. And I am concerned
that future courts could interpret this legislation to indicate that it
is the intent of Congress that companies don't have to provide any
advance notice. And then those companies would be allowed to build
roads and drill wells without telling anyone in charge of protecting
the forest.
This could go far beyond the Allegheny, too, since it could set a
precedent that would apply to all private minerals underneath National
Forests nationwide. I don't see why it's necessary to take that kind of
risk. Particularly when recent court cases have severely limited the
authority of the Forest Service in these situations.
According to the courts, the Forest Service can't say no to
companies wanting to drill on their private mineral rights. I disagree,
but that's not the point we're discussing today. The point is, the oil
companies won. So there's no need for legislation that supposedly
protects their interests--the courts have done it for them. And there's
been no indication that the 60-day notice has hindered companies very
much if at all.
But the courts have also been very clear that the Forest Service
deserves this advance notice, and it deserves the right to make sure
that our national forests are not being unduly harmed by private
companies seeking to drill for oil and gas. Because the Forest Service
is managing this land on behalf of the American people, and the
American people have the right to use this land for recreation,
hunting, fishing, bird watching, and more, and have the right to expect
that they will be able to continue to do so with their children and
their grandchildren.
This bill appears to simply blindfold the Forest Service to what is
happening on their lands, and I think that's the wrong direction to go.
I yield back the balance of my time.
______
Mr. Lamborn. Thank you.
The Chair now recognizes the author of H.R. 3881,
Representative Thompson, for a brief statement about the bill.
STATEMENT OF THE HON. GLENN THOMPSON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. Thompson. Thank you, Chairman. Thank you to the Ranking
Member and my colleagues. Thank you for your attendance this
afternoon.
The underlying issue that this Cooperative Management of
Mineral Rights Act aims to address is central to the management
of the Allegheny National Forest and the economy of the region.
But also, this legislation has a profound implication to how we
manage issues of access, nationally.
At its fundamental core, this legislation is about private
property rights, not about oil--private property rights and
fair access. As we discuss this legislation and the events
leading up to it, it is critical to keep the history of the
region in context.
Since coming to Congress in 2009, I have had the distinct
privilege to represent both the Allegheny National Forest and
Pennsylvania's oil region. Because of this area's remarkable
history, the region was designated as a National Park Service
Heritage Area, and is frequently referred to as--and I quote--
``The Valley That Changed the World.''
In 1859, in Titusville, Pennsylvania, Col. Edwin Drake came
to the area in search of petroleum, intending to corner the
market for medicinal products. Drake discovered much more than
a medicinal tonic. Over the following decades the oil industry
developed, fueling manufacturing, exports, and generations of
innovation.
Following the first American oil boom, in 1923 the
Allegheny National Forest was established in four counties:
Warren, Forest, Elk, and McKean. Because of the long history of
oil and timbering within the region, the Federal Government
chose to only purchase the surface rights within the Allegheny.
This was done as an agreement between the landowners, the
municipalities, and the Federal Government, my predecessors, to
ensure industry could continue to produce privately sourced
commodities, while the area could simultaneously function as a
national forest.
And I have to say, if you have not been to the Allegheny
National Forest, please come. You will see this works really
well. There is not a problem, and what the Forest Service chose
to do in cooperation with some environmental groups with a
solution in search of a problem that the courts have deemed and
reinforced as being inappropriate.
To this day, 93 percent of the mineral rights in the
Allegheny are owned by the private sector. Unfortunately, the
national forests are commonly mistaken for national parks. One
might believe that the Forest Service would have this
understanding, but I feel that we should be reminded of the
mission presented by our first chief of the Forest Service, and
former Pennsylvania Governor, Gifford Pinchot. The mission of
the Forest Service is one of multiple uses and active
management. This includes timbering, conservation, research,
energy production, watershed management, and recreation.
In short, active management of these lands and responsible
utilization of their resources is the core function of the
Forest Service.
Since 1923, the Forest Service and local interests largely
operated harmoniously in order to meet the various needs of the
local communities and the economy, supplementing national
demand for resources. However, the Forest Service attempted to
fundamentally change this long-standing relationship as they
settled out of court to apply the National Environmental Policy
Act, or NEPA, to the oil and gas leasing process.
In January 2009, the Forest Service stopped issuing notices
to proceed, effectively shutting down access to private
property within the Allegheny. Subsequently, a Federal judge
overturned the settlement, citing the Forest Service's lack of
authority to further regulate privately held mineral rights
within the Allegheny National Forest. With due respect to the
Ranking Member, you cannot strip away something that the
government never had.
Further, the courts found that the Federal Government is
required to provide ``reasonable access'' to private property.
Mr. Chairman, the real-life consequences of the Forest
Service's settlement produced a de facto moratorium on energy
production in the Allegheny, affecting industry and the
regional economy. Throughout this period, the Forest Service
referred to an obscure provision contained in the Energy Policy
Act of 1992, in order to justify the need for a new Federal
regulatory process in the Allegheny National Forest.
For 16 years, the Forest Service did not promulgate a new
rule, because they simply were not needed. Oil and gas
extraction had been effectively regulated by the Commonwealth
of Pennsylvania. In light of the court's decision, which again,
ruled squarely in favor of the mineral rights owners, the
private property owners, the existing 1992 statute remains on
the book.
To address this matter, I have introduced H.R. 3881, the
Cooperative Management of Mineral Rights Act. This legislation
repeals the 1992 language which applies solely to the Allegheny
National Forest. This would effectively codify the findings of
the court, which remain consistent with more than 90 years of
precedent. Property rights are, of course, among the founding
principles of this great Nation. In fact, I think it is one of
those that defines us as a Nation. And this is not a new
concept. Case law shows us that access to private property
cannot be unreasonably hindered, not even by the Federal
Government.
Today the committee will hear from a panel of individuals
who were party to the case in question. We will hear firsthand
how the Forest Service's actions caused harm to my
constituents; how it utilized, foolishly, probably more than $4
million that could have been used for healthy forest
management, for multiple uses on the forest; and how it caused
harm to the rural economy and communities of Northwestern
Pennsylvania.
It is my hope that the committee's takeaway will be how
these actions could have similar effects upon their communities
if Federal actions were replicated across the country.
I look forward to the witnesses and look forward to their
testimony. Thank you, Chairman.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of the Hon. Glenn Thompson, a Representative in
Congress from the State of Pennsylvania
Chairman Lamborn, Ranking Member Lowenthal, and colleagues, thank
you for your attendance this afternoon. The underlying issue this
Cooperative Management of Mineral Rights Act aims to address is central
to the management of the Allegheny National Forest and the economy of
the region. But also, this legislation has a profound implication to
how we manage issues of access nationally. At its fundamental core,
this legislation is about private property rights and fair access.
As we discuss this legislation and the events leading up to its
need, it is critical to keep the history of the region in context.
Since coming to Congress in 2009, I have had the distinct privilege to
represent both the Allegheny National Forest and Pennsylvania's Oil
Region. Because of this area's remarkable history, the region was
designated as a National Park Service Heritage Area and is frequently
referred to as ``the valley that changed the world.''
It was 1859 when ``Colonel'' Edwin Drake came to the area in search
of petroleum, intending to corner the market for medicinal products. In
Titusville, Pennsylvania, Drake discovered much more than a medicinal
tonic. Over the following decades the oil industry developed, fueling
manufacturing, exports, and generations of innovation.
Following the first American oil boom, in 1923 the Allegheny
National Forest was established in four counties: Warren, Forest, Elk
and McKean. Because of the long history of oil and timbering within the
region, the Federal Government only purchased the surface rights within
the Allegheny. This was done as an agreement between landowners,
municipalities, and the Federal Government to ensure industry could
continue to produce privately sourced commodities, while the area could
simultaneously function as a national forest.
To this day, 93 percent of the mineral rights in the Allegheny are
owned by the private sector. Unfortunately, national forests are
commonly mistaken for national parks. One might believe that the Forest
Service would have this understanding, but I feel that we should be
reminded of the mission presented by the first Chief of the Forest
Service, and former Pennsylvania Governor, Gifford Pinchot. The mission
of the Forest Service is one of multiple uses and active management.
This includes timbering, conservation, research, energy production,
watershed management and recreation.
In short, active management of these lands and responsible
utilization of their resources is the core function of the Forest
Service.
Since 1923, the Forest Service and local interests largely operated
harmoniously in order meet the various needs of the local communities
and economy, supplementing national demand for resources. However, the
Forest Service attempted to fundamentally change this long-standing
relationship, as they settled out of court to apply the National
Environmental Policy Act, or NEPA, to the oil and gas leasing process.
In January 2009, the Forest Service stopped issuing ``notices to
proceed'', effectively shutting down access to private property within
the Allegheny. Subsequently a Federal judge overturned the settlement,
citing the Forest Service's lack of authority to further regulate
privately held mineral rights within the Allegheny. Further, the courts
found that the Federal Government is required to provide ``reasonable
access'' to private property.
Mr. Chairman, the real-life consequences of the Forest Service's
settlement produced a de-facto moratorium on energy production in the
Allegheny, affecting industry and the regional economy. Throughout this
period, the Forest Service referred to an obscure provision contained
in the Energy Policy Act of 1992, in order to justify the need for a
new Federal regulatory process in the Allegheny National Forest.
For 16 years the Forest Service did not promulgate a new rule,
because they simply were not needed. Oil and gas extraction had been
effectively regulated by the Commonwealth of Pennsylvania. In light of
the court's decision, which again, ruled squarely in favor of the
mineral right owners, the existing 1992 statue remains on the books.
To address this matter, I introduced H.R. 3881, the Cooperative
Management of Mineral Rights Act. This legislation repeals the 1992
language which applies solely to the Allegheny National Forest. This
would effectively codify the findings of the court, which remain
consistent with more than 90 years of precedent. Property rights are,
of course, among the founding principles of this great Nation. This is
not a new concept; case law shows us that access to private property
cannot be unreasonably hindered, not even by the Federal Government.
Today, the committee will hear from a panel of individuals who were
party to the case in question. We will hear firsthand, how the Forest
Service's actions caused harm to my constituents, the rural economy,
and communities of Northwestern Pennsylvania. It is my hope the
committee will take away how these actions could have similar effects
upon their communities, if Federal actions were replicated across the
country.
I welcome the witnesses and look forward to their testimony.
______
Mr. Lamborn. Thank you. Now I will introduce our witnesses,
and they are Mr. Mark Cline, President of the Pennsylvania
Independent Petroleum Producers Association; Mr. Bud
Shuffstall, National Association of Royalty Owners; Mr. Glenn
Casamassa, Association Deputy Chief of the National Forest
System at the U.S. Forest Service; Mr. Jim Furnish, former
Deputy Chief of the U.S. Forest Service; and Mr. Craig Mayer,
Secretary of the Pennsylvania Independent Oil & Gas
Association.
Let me remind the witnesses that under our Committee Rules
they must limit their oral statements to 5 minutes, but their
entire statement will appear in the hearing record.
When you begin, the lights on the witness table will turn
green. After 4 minutes, the yellow light will come on. Your
time will have expired when the red light comes on, and I will
ask you to complete your statement at that time.
The Chair now recognizes Mr. Cline to testify.
STATEMENT OF MARK CLINE, PRESIDENT, PENNSYLVANIA INDEPENDENT
PETROLEUM PRODUCERS ASSOCIATION, INC., BRADFORD, PENNSYLVANIA
Mr. Cline. Chairman and committee members, thank you for
the invitation to come here today and testify about H.R. 3881.
My name is Mark Cline, and I am the President of the
Pennsylvania Independent Petroleum Producers, and a member of
the Pennsylvania Conventional Oil and Gas Advisory Committee.
As you are all aware, the National Forest System was
designed to manage the natural resources, recreation, grazing,
wildlife, fish, and more. The Allegheny National Forest is
unique with its vast oil and gas minerals lying beneath it and
93 percent of those rights belonging to private citizens. There
were wells already drilled on the property before the Forest
Service took over.
At the present time, there are approximately 12,000 oil and
gas wells in the Allegheny National Forest. The industry
figures around half of those 12,000 wells were hydraulically
fracked. A recent study concluded that, despite the long
history of conventional well development in the region, the
ANF's streams, trees, and other natural resources have
prospered. The study states, ``Despite the tens of thousands of
conventional oil and gas wells in operation in the region, a
full 72 percent of the 2,126 miles of mapped streams in the ANF
are rated as high value or exceptional value for water
quality.''
The first Chief of the Forest Service, Gifford Pinchot,
said, and I quote, ``National Forest land is managed to provide
the greatest amount of good for the greatest amount of people
in the long run.''
Now, you are probably thinking that only oil and gas
operators are the ones benefiting from the use of the minerals
under the forest. That thought is completely wrong. The story
from Northwestern Pennsylvania is our Penn Grade Crude Oil,
which, by the way, is the best lubricating oil in the world,
played a huge part in both World Wars.
It was used exclusively in the engines that ran the trucks
and equipment in the first war. The second war, it played a
much bigger part as airplanes became so important. They say if
you would ask an Army/Air Force mechanic from World War II, he
would tell you they only used oil from Pennsylvania. It helped
the planes fly more missions without having engine problems. It
was used by the Army in their trucks and tanks which supported
the soldiers. The same can be said about the Korea and Vietnam
Wars. Fifteen to twenty percent of that oil came directly from
the Allegheny National Forest. I think Gifford Pinchot would
say that the oil was used for the greatest amount of good for
the greatest amount of people.
People still benefit every day from the oil and gas.
Natural gas is used for heating homes, buildings, hospitals,
and schools. It is used to generate electricity. It fuels
vehicles, heats water, bakes food, powers industrial furnaces,
and even powers air conditioners. Our paraffin-based crude oil
is turned into over 6,000 different products. Without crude
oil, this country would come to a complete standstill. From the
time you wake up in the morning from the sound of your alarm
clock, take a shower, eat breakfast, and get into your car, you
have already used over 40 products made from crude oil. So
don't you ever think or let someone tell you that we are the
only ones benefiting from the minerals under the ANF.
The industry has spent vast amounts of money defending our
rights to produce in the ANF. These rights were given to us
years ago and have been upheld by the courts. This bill would
protect those rights. Please vote to approve this bill.
Thank you for your time and the opportunity to be here
today.
[The prepared statement of Mr. Cline follows:]
Prepared Statement of Mark L. Cline, President, Pennsylvania
Independent Petroleum Producers Association, Inc., Bradford,
Pennsylvania
Chairman and committee members, thank you for the invitation to
come here today and testify about H.R. 3881. As you are all aware, the
National Forest system was designed to manage the natural resources,
recreation, grazing wildlife, fish and more.
The Allegheny National Forest is unique with its vast oil and gas
minerals lying beneath it and 93 percent of those rights belonging to
private citizens. There were wells already drilled on the property
before the Forest Service took over. At the present time there are
approximately 12,000 oil and gas wells in the Allegheny National
Forest. The Industry figures around half of those 12,000 wells were
Hydraulically Fracked. A recent study concluded that despite the long
history of conventional well development in the region, the ANF's
streams, trees and other natural resources have prospered. The study
states despite the tens of thousands of conventional oil and gas wells
in operation in the region, a full 72 percent of the 2,126 miles of
mapped streams in the ANF were rated as high value or exceptional value
for water quality.
The first Chief of the Forest Service, Gifford Pinchot said and I
quote ``National Forest Land is managed to provide the greatest amount
of good for the greatest amount of people in the long run.'' Now you
are probably thinking that only the oil and gas operators are the ones
benefiting from the use of the minerals under the Forest. That thought
is completely wrong. The story from Northwestern Pennsylvania is our
Penn Grade Crude oil, which by the way is the best lubricating oil in
the world, played a huge part in both World Wars. It was used
exclusively in the engines that ran the trucks and equipment in the
first war. The second war it played a much bigger part as airplanes
became so important. They say if you would ask an Army Air Force
mechanic from World War II, he would tell you they only used oil from
Pennsylvania. It helped the planes fly more mission without having
engine problems. It was used by the Army in their trucks and tanks
which supported the soldiers. The same can be said about the Korea and
the Vietnam Wars, 15 to 20 percent of that oil came from the Allegheny
National Forest. I think Gifford Pinchot would say ``that the oil was
used for the greatest amount of good for the greatest amount of
people.''
People still benefit every day from the oil and gas. Natural gas is
used for heating homes, buildings, hospitals and schools. It is used to
generate electricity, it fuels vehicles, heats water, bakes food,
powers industrial furnaces, and even powers air conditioners.
Our paraffin based crude oil is turned into over 6,000 different
products. Without crude oil this country would come to a complete
standstill. From the time you wake up in the morning from the sound of
your alarm clock, take a shower, eat breakfast and get into your car
you have already used over 40 products made from crude oil. So don't
you ever think or let someone tell you we are the only ones benefiting
from the minerals under the ANF.
The Industry has spent vast amounts of money defending our rights
to produce in the ANF. These rights were given to us years ago and have
been upheld by the Courts. This Bill will protect those rights. Please
vote to approve this Bill.
Thank you for your time and the opportunity to be here today.
______
Mr. Lamborn. Thank you.
The Chair now recognizes Mr. Shuffstall to testify.
STATEMENT OF DEARALD ``BUD'' SHUFFSTALL, NATIONAL ASSOCIATION
OF ROYALTY OWNERS, MEADVILLE, PENNSYLVANIA
Mr. Shuffstall. Chairman Lamborn, Ranking Member Lowenthal,
members of the committee, it is an honor to speak with you
today regarding this important issue. Thank you for the
invitation. I am Bud Shuffstall. I am from Meadville,
Pennsylvania. I work for Northwest Bank, which is headquartered
in Warren, Pennsylvania, which also happens to be the
headquarters of the Allegheny National Forest.
Like many of our customers and bank staff, personally I am
a regular visitor to the ANF, and we value and appreciate it
deeply. But I am here today as a member of NARO, the National
Association of Royalty Owners.
NARO has members in all 50 states and educates and
advocates for the rights of an estimated 8.5 to 12 million
citizens who receive royalty income from the production of
their private property, specifically from production of their
oil, natural gas, and minerals. The average NARO member is 60
years old, a widow, and makes less than $500 per month in
royalty income.
We are very pleased to address the committee on the issue
of development of private or severed oil, gas, and mineral
interests underlying the national forests, as the protection of
these private property rights in all 50 states is paramount to
millions of private mineral owners.
Of all the wells ever drilled in the world, the vast
majority have been drilled in the United States. Why? Because
we are a Nation that values the private ownership of oil, gas,
and minerals. We value and encourage risk in the pursuit of
profit. The United States is the only former British colony
that, upon achieving independence, awarded the ownership of the
minerals to private citizens instead of to the state. This
uniquely American model was actually suggested by Thomas
Jefferson. His concept has helped make us a strong Nation and
today is enabling America's rise to become the world's dominant
energy producer.
As noted previously, the ANF does lie in the heart of
Pennsylvania's oil and gas region. Its headquarters is roughly
40 miles from the site of Drake's well in Titusville,
Pennsylvania. Some of the earliest severances of these property
rights, the oil and gas interests underlying the earth,
occurred under land that was to become the Allegheny National
Forest, or very near to it.
As previously noted, the ANF was created pursuant to the
Weeks Act of 1911. In 1923, the Federal Government purchased
only the surface estate, even though the Weeks Act authorized
the acquisition of subsurface rights, including mineral rights.
The Federal Government chose not to acquire those rights, as
they were at the time too valuable and presumably cost-
prohibitive to acquire. In doing so, the Federal Government
took title to the surface only, and subject to the rights of
all prior exceptions and reservations of subsurface oil and gas
rights.
In many cases, those oil and gas rights underlying the ANF
had long been severed before the creation of the ANF. It is a
well established point of law in all jurisdictions of the
United States, including Pennsylvania, that the private
property rights of the subsurface estate are dominant over the
rights of the surface estate. The law's recognition of the
subsurface interest as dominant has been found to be essential,
lest it be subrogated to any other property rights, thereby
risking its devaluation.
Absent a taking by the government of those subsurface
property rights, this legal principle precludes the Federal
Government, as surface estate owner of the ANF, from
interfering with the development of private subsurface rights.
Subject to state and Federal law, of course, the subsurface
rights owners have the legal authority, therefore, to develop
their private oil and gas reserves. It is this group that NARO
represents. NARO members have a dominant legal authority to
access and develop their private subsurface interests. The
Forest Service may not unreasonably restrict access to that
estate in a way that makes the development thereof uneconomic
or unprofitable.
The government must be held to a reasonable set of
regulatory management controls that does not unduly burden
those private oil, gas, or mineral owners. For example, an
excessive fee structure for access onto, or across, Federal
lands will negatively affect the value of the subsurface estate
and the economic viability of that estate.
Finally, the third tenet that should be addressed here is
that the government may not unreasonably restrict oil and gas
development to the point of requiring a ``no net impact'' from
an environmental standpoint as it seeks to mitigate surface
impacts. The government may not improperly elevate
environmental concerns over other appropriate considerations,
or seek to create a set of regulations that restricts or
eliminates all environmental impacts on the subject lands.
Any environmental analysis must also include the economic
impacts to the orderly development of oil and gas within the
forest. This includes a socioeconomic analysis that details the
negative impacts any restrictions will have on state and
private subsurface development and the impacts to local and
state economies and taxes.
In conclusion, we wish to emphasize that the government
must recognize the rights of the subsurface interests and their
dominance of those rights over the surface interests.
Thank you for your time.
[The prepared statement of Mr. Shuffstall follows:]
Prepared Statement of Dearald ``Bud'' W. Shuffstall, II, National
Association of Royalty Owners, Meadville, Pennsylvania
Chairman Lamborn, Ranking Member Lowenthal, members of the
committee, it's an honor to speak with you today regarding this
important issue. Thank you for the invitation.
I am Bud Shuffstall from Meadville, Pennsylvania. I work for
Northwest Bank, headquartered in the same city as the Allegheny
National Forest's headquarters (Warren, PA). Like many of our customers
and bank staff, I am a regular visitor to the Allegheny National Forest
and value and appreciate it deeply.
I speak today as a member of the National Association of Royalty
Owners (NARO). NARO has members in all 50 states and educates and
advocates for the rights of an estimated 8.5 to 12 million citizens who
receive royalty income from the production of their private property--
specifically from production of their oil, natural gas and minerals.
The average NARO member is 60 years old, a widow and makes less
than $500 per month in royalty income. About 70 percent of the mineral
estate in the lower 48 states is owned by individual citizens. In 2012,
Montana State University conducted a study that estimated roughly 77
percent of oil and 81 percent of natural gas produced onshore was
produced on private property. NARO is pleased to address this committee
on the issue of development of private (severed) oil, gas and mineral
interests that underlie the Allegheny National Forest, as the
protection of our private property rights in all 50 states is paramount
to millions of private mineral owners.
Of all the wells ever drilled around the world, the vast majority
have been drilled in the United States--a Nation that values private
ownership of oil, gas and minerals and that also encourages both risk
and the pursuit of profit. The United States is the only former colony
that, upon achieving independence, awarded the ownership of minerals to
private citizens instead of to the state. This uniquely American model
was suggested by Thomas Jefferson. His concept has helped make us a
strong Nation and it today is enabling America's rise to become the
world's dominant energy producer.
The Allegheny National Forest lies in the heart of Pennsylvania's
oil and gas region. It is only 40 miles (64 km) from the site of the
first commercial oil well in the United States at Titusville,
Pennsylvania. Indeed, some of the earliest severances of subsurface oil
and gas rights occurred in the late 1850s and early 1860s near or upon
land that would eventually become part of the Allegheny National
Forest.
The Allegheny National Forest was created pursuant to the
provisions of the Weeks Act of 1911. In 1923 the Federal Government
purchased only the surface estate in what was to become the Allegheny
National Forest (the subsurface rights being too valuable and cost
prohibitive to acquire at the time). In doing so the Federal Government
took title to the surface only, and subject to the rights of all prior
exceptions and reservations of subsurface oil and gas rights. In many
cases the oil and gas rights underlying the property had been long
severed from the surface before the creation of the Allegheny National
Forest.
It is a well-established point of law in all jurisdictions of the
United States, including Pennsylvania, that the rights of the
subsurface estate are dominant over the rights of the surface estate.
The law's recognition of the subsurface estate as dominant has been
found to be essential, lest it be subrogated to any other property
rights thereby risking its devaluation. Absent a taking by the
government of subsurface property rights, this legal principle
precludes the Federal Government as surface estate owner of the
Allegheny National Forest from interfering with the development of
those subsurface property rights still owned by others.
Existing Forest Service regulations recognize this fact and
maintain that Service operations should not be ``applied so as to
contravene or nullify rights vested in holders of mineral interests on
refuge lands.'' 50 C.F.R. Sec. 29.32. The Service's manual states that
it must ``[p]rovide for the exercise of non-Federal oil and gas rights
while protecting [USFWS] resources to the maximum extent possible.''
612 FWS Manual 2.4.B.
Subject to state and Federal law, the subsurface rights owners have
the legal authority to develop oil and gas reserves. It is this group
of people that NARO represents. Just as the Forest Service has the
authority to manage the public surface estate, NARO members have a
dominant legal authority to access and develop their private subsurface
estate. Also, the Forest Service may not unreasonably restrict access
to the subsurface estate in a way that makes the development thereof
uneconomic or unprofitable.
Courts have held that Federal agencies cannot impose stipulations
or conditions of approval (COAs) that violate this tenet. See Utah v.
Andrus, 486 F. Supp. 995, 1011 (D. Utah 1979); see also Conner v.
Burford, 848 F.2d 1441, 1449-50 (9th Cir. 1988). Concurrent with
courts' decisions discussing the dominance of the subsurface estate is
a requirement that a holder of oil, gas or mineral rights adhere to the
accommodation doctrine, which provides that a mineral owner or lessee
may ``use as much of the surface as reasonably necessary to extract and
produce the minerals'' as long as that use is reasonable. Merriman v.
XTO Energy, Inc., 407 S.W.3d 244, 248-49 (Tex. 2013).
Therefore, the government must be held to a reasonable set of
regulatory management controls that does not unduly burden private oil,
gas or mineral owners. For example, an excessive fee structure for
access onto, or across, federally owned lands will negatively affect
the value of the subsurface estate and the economic viability of
development of that estate. The government must not develop regulatory
management tools and fees that provide a regulatory avenue to develop
in theory but which creates an economic firewall to development in
reality.
It is important to note that expenses incurred in the development
of oil, gas and minerals come in many forms. A monetary fee charged by
the surface estate owner would be another such expense. All of the
other costs incurred by the oil and gas developer as a result of
requirements by the surface estate owner also should be taken into
consideration when calculating a fair and reasonable fee structure.
These other costs could include the cost and time of preparation of
Environmental Impact Statements and reports unique to the Federal
surface estate, rights-of-way fees for pipelines and roads, and lease
maintenance and operational drilling and service costs associated with
lengthy application processes.
The third basic tenet which NARO feel should be considered in this
process is that the government may not unreasonably restrict oil and
gas development to the point of requiring a ``no net impact'' on the
environment as it seeks to mitigate surface impacts.
The National Environmental Policy Act (NEPA) ``does not require
agencies to elevate environmental concerns over other appropriate
considerations.'' Citizens' Comm. to Save Our Canyons v. U.S. Forest
Serv., 297 F.3d 1012, 1022 (10th Cir. 2002). Instead, NEPA is a
procedural statute and does not mandate particular results. Robertson
v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). As
explained by the Interior Board of Land Appeals (IBLA), ``NEPA does not
bar actions which affect the environment, even adversely. Rather, the
process assures that decisionmakers are fully apprised of likely
effects of alternative courses of action so that selection of an action
represents a fully informed decision.'' Biodiversity Conservation
Alliance, 174 IBLA 1, 13-14 (2008) (citing the Vermont Yankee U.S.
Supreme Court case).
As the IBLA observed in Oregon Natural Resources Council, NEPA does
not direct that Federal agencies prohibit action even where
environmental degradation is inevitable. 116 IBLA 355, 361 n.6 (1980).
NEPA only mandates a full consideration of the environmental impact of
a proposed action before undertaking it. Nat'l Wildlife Federation, 169
IBLA 146, 164 (2006).
The government may not improperly elevate environmental concerns
over other appropriate considerations or seek to create a set of
regulations that restricts all environmental impacts on the subject
lands. Any environmental NEPA analysis must also include the economic
impacts to the orderly development of oil and gas within the forest.
This includes a socioeconomic analysis that details the negative
impacts any restrictions will have on state and private subsurface
development and the impacts to local and state economies and taxes.
In conclusion, NARO wishes to emphasize that the government must:
recognize the rights of the subsurface estates, and that
such rights are dominant over the rights of the surface
estate;
allow economic and profitable access to, and development
of, the subsurface estate;
balance environmental concerns with the economic
development of oil, gas and minerals; and
avoid the costly taking that inevitably results from
activists utilizing the agencies of the Federal Government
to prevent or deny the development of our private mineral
property without the ``just compensation'' that the U.S.
Constitution guarantees.
Thank you for the opportunity to present the collective views of
millions of private property oil, gas and mineral owners. If we may
provide any additional information or be of service or assistance to
the committee please let us know.
______
Mr. Lamborn. Thank you.
The Chair now recognizes Mr. Casamassa to testify.
STATEMENT OF GLENN CASAMASSA, ASSOCIATION DEPUTY CHIEF,
NATIONAL FOREST SYSTEM, U.S. FOREST SERVICE, U.S. DEPARTMENT OF
AGRICULTURE, WASHINGTON, DC
Mr. Casamassa. Mr. Chairman, Ranking Member Lowenthal, and
members of the subcommittee, thank you for the opportunity to
present the views of the U.S. Department of Agriculture
regarding H.R. 3881, the Cooperative Management of Mineral
Rights Act of 2015.
H.R. 3881 would repeal subsection (o) of section 17 of the
Mineral Leasing Act, and Section 2508 of the Energy Policy Act
of 1992. These provisions apply only to Federal lands within
the Allegheny National Forest, for which the United States does
not own the subsurface rights to oil and gas. These provisions
provide general terms and conditions that must be followed
before commencing surface-disturbing activities to develop oil
and gas deposits.
The USDA believes the terms and conditions of the Mineral
Leasing Act and the Energy Policy Act allow national forests to
prudently manage surface resources, while ensuring the
subsurface owners do not have unreasonable requirements to
access their privately held mineral rights. We would like to
continue to work with the sponsor to address issues of concern.
However, we cannot support H.R. 3881.
This concludes my remarks. I would be happy to answer any
questions. Thank you for the opportunity to testify.
[The prepared statement of Mr. Casamassa follows:]
Prepared Statement of Glenn Casamassa, Associate Deputy Chief, National
Forest System, U.S. Forest Service, U.S. Department of Agriculture
Mr. Chairman and members of the subcommittee, thank you for the
opportunity to present the views of the U.S. Department of Agriculture
(USDA) regarding H.R. 3881, the Cooperative Management of Mineral
Rights Act of 2015.
H.R. 3881 would repeal subsection (o) of section 17 of the Mineral
Leasing Act (30 U.S.C. 226) and section 2508 of the Energy Policy Act
of 1992 (P.L. 102-486; 106 Stat. 3108). These provisions apply only to
Federal lands within the Allegheny National Forest for which the United
States does not own the subsurface rights to oil and gas. These
provisions provide general terms and conditions that must be followed
before commencing surface-disturbing activities to develop oil and gas
deposits.
The USDA believes the terms and conditions in the Mineral Leasing
Act and in the Energy Policy Act allow national forests to prudently
manage surface resources, while ensuring that subsurface owners do not
have unreasonable requirements to access their privately held mineral
rights. We would like to continue to work with the sponsor to address
issues of concern, however we cannot support H.R. 3881.
This concludes my remarks. I would be happy to answer any
questions. Thank you for the opportunity to testify.
______
Mr. Lamborn. Thank you.
The Chair now recognizes Mr. Furnish to testify.
STATEMENT OF JIM FURNISH, FORMER DEPUTY CHIEF, U.S. FOREST
SERVICE, WASHINGTON, DC
Mr. Furnish. Good afternoon. I would like to just summarize
where I am coming from on this. My view on this bill is that,
although it is well intentioned, I view it as a misapplied fix.
I would note that the spark that ignited much of what is in
contention here today was in 2007 during the George W. Bush
administration lapsed over into the Obama administration, and
was ultimately settled by the courts, which is their job.
To me, there is irony in the title of this bill,
``Cooperative Management of Mineral Rights,'' when
``cooperate'' is defined as to work or act together, which is
precisely what the energy industry and the Forest Service have
been doing for decades. The past cooperation, which was a
result of both litigation and enacted statute, provides 60 days
notice to the land holder by the proponent in exercising their
private mineral rights. And this process has served the public
interest well by both allowing industry access to their private
estate energy resources laying beneath public lands, while
providing the Forest Service a brief but reasonable amount of
time to discharge its stewardship responsibilities on behalf of
the public.
You, no doubt, are aware that I firmly believe the 60-day
notice requirement should remain in place. I am well aware that
a few years ago the Forest Service did place a ban--excuse me,
a hold, not a ban, it was a hold on processing drilling
proposals in the belief, based on their legal counsel, that
NEPA necessitated review and analysis. This went through the
courts and the courts found otherwise. The Forest Service has
been behaving in compliance with that outcome since.
I would also like to note that it is necessary to work
through occasional obstacles where important values and
interests are at stake on both sides. I think the emergence of
the fracking industry--and it was noted that about half the
wells on the Allegheny have been subjected to fracking, much
was unknown during the early part of the 21st century, much
more is known now.
But in light of the questions surrounding this technology,
the vast amounts of fluids used in drilling, as well as
discharge from drilling, the important considerations of world-
renowned black cherry resource, road access, water quality,
recreation pursuits, all these things, there was a balancing of
interest that the Forest Service was seeking to provide in the
belief that they needed to approve of these, that this was ``a
Federal action.'' The courts found that this was not a Federal
action, it was a private action. So the Forest Service has
waived the imposition of NEPA.
Now they are actively cooperating within the 60 days to
provide notices to proceed. Industry is, likewise, exercising
their right to drill in a cooperative relationship with the
landowner. I think this comes down to this question that I pose
to you legislators: If drilling activities like cutting trees,
disposing of well affluents, and building access roads and
drill pads were occurring on private lands with no notice to
the owners, do you think these private citizens might be upset?
Might they come to you for help?
In your role as an elected official, would you demand that
industry had no responsibility to provide notice, no
responsibility to minimize drilling consequences, and no
responsibility to address landowner concerns as to disposing of
affluents, trees, road locations, drill pads, sites, all these
kinds of things?
Public land, though managed by the Forest Service, is
really no different, because it belongs to private citizens,
including you, who have every reason to demand that the Forest
Service do its very best to care for this land as a public
trust. You now have in place a law that fosters effective
cooperation so that industry and private citizens alike get a
fair shake.
For the life of me, I cannot understand why you wish to
rescind that law and short-change the interests of your citizen
constituents. Thank you.
[The prepared statement of Mr. Furnish follows:]
Prepared Statement of James R. Furnish, Deputy Chief, USDA Forest
Service (Ret.)
My name is Jim Furnish, and I am a consulting forester residing in
Rockville, MD. I retired in 2002 from my position as Deputy Chief for
National Forest Systems, USDA.
I appear today to offer my views on H.R. 3881, which intends to
rescind statutory provisions of P.L. 102-468 (Oct. 24, 1992) that
require companies proposing drilling operations on Allegheny National
Forest to give 60-day advance notice to the Forest Service, including
such information as the specific location and dimensions of their
proposed activity.
There is irony in the title of H.R. 3881--``Cooperative Management
of Mineral Rights''--when cooperate is defined as ``to work or act
together''; which is precisely what the energy industry and Forest
Service have been doing for decades. The past cooperation--resulting
from litigation and enacted statute to provide 60 days notice--has
served the public interest well by allowing industry access to their
private estate energy resources laying beneath public lands, while
providing the Forest Service a brief but reasonable amount of time to
discharge its stewardship responsibilities for public resources.
I firmly believe the 60-day notice requirement should remain in
place. I am aware that a few years ago the FS placed a hold on
processing drilling proposals in the belief that NEPA necessitated
review and analysis. Courts found otherwise. It was also extremely
difficult to process timely the hundreds of proposals during the energy
activity boom a few years ago. But NEPA was found not to apply to these
industrial actions, and the pace of development has once again slowed.
It is necessary to work through occasional obstacles where important
values and interests are at stake on both sides.
The FS is now actively cooperating within the 60 days provided to
issue Notices to Proceed. Industry is exercising their right to drill
in a cooperative relationship with the landowner.
I pose this question to you legislators: if drilling activities
like cutting trees, building access roads and drill pads were occurring
on private lands with no notice to the owners, do you think these
private citizens might be upset? Might they come to you for help? In
your role as an elected official, would you demand that industry had no
responsibility to provide notice, had no responsibility to minimize
drilling consequences, and had no responsibility to address landowner
concerns as to disposing of trees or road locations?
Public land, though managed by the FS, is really no different--
because it belongs to private citizens, including you, who have every
reason to demand that the FS do its best to care for the land. You now
have in place a law that fosters effective cooperation so that industry
and private citizens alike get a fair shake. For the life of me, I
cannot understand why you wish to rescind that law and shortchange the
interests of your citizen constituents.
______
Mr. Lamborn. All right.
The Chair now recognizes Mr. Mayer to testify.
STATEMENT OF CRAIG MAYER, SECRETARY, PENNSYLVANIA INDEPENDENT
OIL & GAS ASSOCIATION, WARREN, PENNSYLVANIA
Mr. Mayer. Thank you very much, Chairman Lamborn,
Representative Thompson, and members of the committee. Thank
you for inviting me to testify today. My testimony is being
presented on behalf of the Pennsylvania Independent Oil and Gas
Association of Pennsylvania.
Under the Weeks Act of 1911, sovereign states had first to
consent to, by way of statutes, the acquisition of any lands
whatsoever before any lands could be acquired for the purposes
of national forest growing. Under Section 9 of the Weeks Act,
before the United States could even purchase any surface lands
that had been severed from oil and gas estates before the time
the United States purchased itself, these are known as
outstanding estates, it had to be found or certified that such
estates, from their very nature, would in no manner interfere
with the use of the land for the purposes of the Act. For
reserved estates, those reserved at the time of the purchase
from the seller himself or herself, the rules that were
incorporated had to be expressed in and made a part of the
deeds in order to be applied or effective.
Before proceeding further with my testimony, I did want to
point out one point, which I think is important and helpful for
the committee to know. One of the final acts in the events that
would unfold in the 8 years of litigation and conflict between
Northwest Pennsylvania's oil and gas producers and the Forest
Service--pointedly, it was the Department of Justice in April
2014 awarding the Pennsylvania Independent Oil and Gas
Association a half-a-million dollars, $530,000 exactly, in its
legal fees and expenses in the Central Minard Run case,
pursuant to a claim filed by the Equal Access to Justice Act.
The Act authorizes the recovery of legal fees for an aggrieved
party when the government is unable to show that its position
in the litigation was substantially justified.
Beginning in 2006, the Forest Service departed from its
decades-long cooperative relationship with private mineral
owners and set upon a course of action designed to effectively
seize control of the 483,000 acres of private mineral estates
underlying the ANF. They went from a posture of cooperation--I
was there--to a posture of coercion.
Included in its efforts was a 2009 sweetheart settlement
agreement with environmental activists that was set aside by
the Federal courts, the establishment--and I am not making this
up--of an oil and gas strike team by the regional forester, and
various administrative actions and rulemakings crafted to
essentially strangle oil and gas development activity on the
private estates in the ANF. Most of these initiatives were
ultimately abandoned or suspended, as a result of PIOGA
engaging with the Forest Service on these matters, as well as
other parties. And in due course, fortunately, the Federal
courts intervened to prevent the Forest Service from realizing
its aims.
Getting to the precise questions today, I think that it is
very important to the law in question that the language in 30
U.S.C. 226(o) about not construing what is there having
anything to do with an effect on state authority is important.
The language defers to state authority and sovereignty, just as
the language in Section 9 of the Weeks Act does, and just as a
requirement in the Weeks Act itself, that the sovereign states
must consent to any acquisitions before they could occur at
all.
In this regard, in 2008, the Pennsylvania General Assembly
unanimously adopted resolutions reconfirming that the
acquisition of the ANF under the Weeks Act did not and does not
confer power on the United States to manage or regulate mineral
estates that were in existence but were never purchased or
condemned by the United States at the time of the acquisition.
And the General Assembly also resolved that the imposition of
any rules that would purport to manage or regulate reserved or
outstanding estates, unless expressed in the deeds, would
exceed the consent of the Commonwealth.
This principle of not recognizing or consenting to Federal
jurisdiction over property rights that the Federal Government
never acquired when it purchased the ANF was carried forward by
the PA legislature 4 years later when it passed Act 13 of 2013,
which is a comprehensive overhaul of the oil and gas
regulations that is now in effect that covers every aspect of
oil and gas development on the ANF and elsewhere in
Pennsylvania. That provision reaffirmed that it was
Pennsylvania laws and statutes that would apply to the reserved
and outstanding estates in the ANF, and only those statutes.
Also in the Minard Run four decisions--there were five
decisions in the history of that name in cases--Judge
McLaughlin dismissed on the merits the argument that the Forest
Service possessed broad regulatory authority as a result of
Pennsylvania's 1911 consent statute, which authorized the
acquisition to begin with. In so doing, he noted that the
Pennsylvania Act contains no language authorizing the Federal
Government to pass regulatory laws concerning unacquired
mineral estates.
In closing, the Federal court rulings in the Minard Run
line of cases, as well as action by the Pennsylvania
legislature, have really resulted in subsection (o) becoming
moot and superfluous. There is some confusion here with respect
to what is, in fact, in effect as the law. There is no question
that notice is absolutely required, has been required, and is
continually given by any oil and gas producer since the 1980
decision in what was called Minard Run I. The repeal of this
statute would in no fashion diminish the requirement for
notice.
Mr. Lamborn. Mr. Mayer, we are going to have to ask you to
finish.
Mr. Mayer. Thank you.
[The prepared statement of Mr. Mayer follows:]
Prepared Statement of Craig L. Mayer, Esq., Secretary, Pennsylvania
Independent Oil & Gas Association, Warren, Pennsylvania
Since 2008 I have served as Secretary of the Pennsylvania
Independent Oil & Gas Association (``PIOGA'') and Chairman of PIOGA's
Allegheny National Forest (ANF) Committee. PIOGA is a nonprofit trade
association headquartered in Wexford, Pennsylvania just north of
Pittsburgh. It is comprised of over 700 members, including oil and
natural gas producers engaged in development and production from both
conventional and unconventional formations in Pennsylvania, as well as
drilling contractors, service companies, manufacturers, distributors,
professional firms and consultants, pipelines, end users and royalty
owners with interests in the success of Pennsylvania's oil and natural
gas industry. Many of our members own subsurface acreage and are
involved in exploration and production activities on private oil and
gas estates within the Allegheny National Forest. I am offering
testimony today in support of H.R. 3881 on behalf of our association.
By way of background, from 2004 until 2014, I was a Vice-President
and General Counsel for Pennsylvania General Energy Company L.L.C.
(``PGE''), which is headquartered in Warren, Pennsylvania. Since 2014,
in a part-time capacity, I have been PGE's Vice-President for
Government Relations. I am a retired U.S. Marine Corps officer having
served on active duty from 1968 to 1992. I obtained a Juris Doctor
degree from Duquesne University Law School in 1974 and am a 1968
graduate of the Pennsylvania State University.
The ANF encompasses approximately 513,000 acres which cover major
parts of four counties in Northwestern Pennsylvania, i.e., Elk, Forest,
Warren, and McKean Counties. Notably, 93 percent of the ANF lands or
about 483,000 acres are underlain by private severed oil and gas
mineral estates. When the ANF surface lands were acquired by the
Federal Government in the 1920s and 1930s, the Forest Service purposely
did not acquire the private oil and gas estates. In fact, under Section
9 of the 1911 Weeks Act, 16 U.S.C. Sec. 518, before the United States
could even purchase surface lands that had been severed from oil and
gas estates before the time of the United States purchase, both the
Secretary of Agriculture and the National Forest Reservation Commission
had to find that such estates ``from their nature'' would ``in no
manner interfere'' with the use of the land for the purposes of the
Act. The Forest Service viewed oil and gas production as not in
conflict with forestry management purposes, and that view continued
until 2006.
The ANF region is the birthplace of the oil and gas industry in
Pennsylvania, the United States, and the world. The first oil well in
the world, the Drake Well, was drilled in 1859, about 15 miles from the
current southwestern ANF boundary. Oil and gas production has occurred
in this region for well over a century, including on the ANF lands. It
is a vital part of the culture of the communities in the region and our
economic base. For example, PIOGA estimates that annually 25 to 35
percent of the oil produced in Pennsylvania comes from estates within
the ANF. There are approximately 60 producers and, at least, an equal
number of direct supporting businesses who rely on natural resource
development within the ANF. Only a handful of the producers are large
companies with the vast majority being composed of individuals,
families, and small companies. Traditionally, the U.S. Forest Service
respected multiple use of the ANF and cooperated with oil and gas
producers. This all changed beginning in 2006 and particularly so in
early 2009.
Beginning in 2006 the U.S. Forest Service departed from its
decades-long cooperative relationship with private mineral owners and
set upon a course of action designed to effectively seize control of
the 483,000 acres of private mineral estates that they owned. Included
in its various efforts was a 2009 ``sweetheart'' settlement agreement
with environmental activists that was set-aside by the Federal courts
as well as various administrative actions and rulemakings crafted to
strangle oil and gas development activity on private estates underlying
the ANF and other national forest lands. PIOGA engaged the Forest
Service on these and other fronts. In due course the Federal Courts
intervened to stop the Forest Service from realizing its aims.
The story of Northwest Pennsylvania's oil and gas industry 9-year
engagement with the Forest Service is told in the attached 77 page
article that was presented at the Proceedings of the Thirty Sixth
Annual Energy and Mineral Law Institute of the Energy and Mineral Law
Foundation in June 2015. It chronicles key events and provides, in my
considered opinion, more than ample reason for supporting and adopting
H.R. 3881. Federal court rulings in the Minard Run line of cases as
well as actions by the Pennsylvania legislature which result in a
barring of any Federal regulation by way of subsection (o) are
discussed in the attached article at pages 271 and 272. In short, these
actions have rendered subsection (o) of section 17 of the Mineral
Leasing Act (30 U.S.C. 226) moot and superfluous. Moreover, its
prescribed terms are already implemented by way of the Minard Run
judicial decisions and the common law.
On behalf of PIOGA I thank the members of the committee here today
for your interest and help on these issues which are of vital
importance to Northwestern Pennsylvania, and many other regions of our
Nation.
*****
The following document was submitted as a supplement to Mr. Mayer's
testimony. This document is part of the hearing record and is being
retained in the Committee's official files:
-- A Study in the Abuse of Power: The United States Forest
Service's Illegal Efforts to Seize Control of Mineral
Estates Underlying the Allegheny National Forest, 36 Energy
& Min. L. Inst. 244 (2015)
______
Mr. Lamborn. All right, thank you. We will go on with our
questions now.
I thank the panel for their testimony, I thank you all for
being here. Reminding the Members that Committee Rule 3(d)
imposes a 5-minute limit on questions, the Chair will now
recognize Members for any questions they may wish to ask the
witnesses. I will begin with myself, then the Ranking Member,
and so on.
This first question will be for Mr. Mayer and Mr. Cline.
Our Nation's shale gas revolution changed the world while
lowering prices here at home.
[Chart]
Mr. Lamborn. As you can see on the chart on the screen, it
has allowed American families, manufacturers, and other
businesses to enjoy low energy prices and to flourish. A report
issued by the Congressional Budget Office in December 2014
pointed out that if shale gas did not exist, the price of
natural gas would be about 70 percent higher than currently
projected by 2040, and that shale gas development has boosted
our gross domestic product--that increase has been so large
that if it came from a separate country, it would now be the
world's third-largest natural gas supplier.
However, there are some even here in Congress who would
campaign, and who are campaigning for President, who want to
stop this production dead in its tracks. What if they did stop
this production, and what would have happened to the shale gas
revolution if the policies that we are talking about on the
part of the Forest Service had been used by other agencies
around the country before the shale gas revolution even took
place?
Once again, Mr. Mayer or Mr. Cline?
Mr. Mayer. Let me just respond by saying that this
provision did not figure centrally in the litigation until
about 2008, when it was cited in a rulemaking initiative as one
of the basics for a comprehensive rulemaking wherein the Forest
Service was going to apply a whole series of rules to the non-
Federal mineral estates, private estates throughout the
country, to include the ANF.
So, it was not just limited to the ANF, it was cited as
authority to expand it beyond the ANF.
Mr. Lamborn. Mr. Cline?
Mr. Cline. If they put a ban on fracking, I read a study
the other day that in 5 years we would go through 45 percent of
our reserves. And if this would have happened back in the
1980s, and the shale gas would have never taken off, we would
not have a whole lot of gas in this country right now, and the
price would be sky high.
Mr. Lamborn. OK, thank you. Now I have a question for Mr.
Shuffstall and Mr. Cline.
It is important to point out that sometimes even the mere
threat of Federal regulation has very serious impacts on state
and local economies, can be a powerful market force, and
sometimes will even have impacts on a national or global scale.
One example is President Obama's Clean Power Plan that the
Supreme Court has put on hold. Implementation has been halted.
Yet even if the courts strike it down, the very serious impacts
of the rule are lasting, especially for the thousands of
Americans who will be out of a job due to several coal
companies having been driven into bankruptcy.
So my question is this: Even though private mineral rights
owners won in court in this particular instance, how did the
proposed regulations by the U.S. Forest Service impact your
friends and neighbors and local economy, and would you say that
there are even still some lasting consequences?
Mr. Shuffstall. Certainly, there have been. There has been
a chilling effect. If you are familiar with Bradford, there is
a refinery there that depends on a particular kind of crude oil
that is only produced in the region. You do not just refine any
crude oil at a particular refinery, it requires a certain
grade. This is Pennsylvania Grade Crude Oil, and the entire
local economy is dependent to a certain degree on the
production of Pennsylvania Grade Crude, much of which comes
from the ANF and other areas of the region.
And the idea of the uncertainty for the last 10, 15 years
of whether or not that would continue has had a definite
chilling effect on the local economy. And it is not just
limited to Bradford. I would say the entire oil-producing
region of Northwest Pennsylvania.
Mr. Lamborn. Thank you. Mr. Cline?
Mr. Cline. Yes, I would agree with what he says. The
uncertainty of Federal regulations, along with what we are
going through with the state, it makes everybody cautious about
doing anything, going ahead in the future. It makes you wonder
whether we are going to be in business much longer if we have
any more regulations.
They are killing the business, and it has had a great
effect around Bradford. Anywhere in Northwestern Pennsylvania--
out of the 26,000 people that are employed directly by
conventional oil and gas, I would say there are probably only
about 6,000 of them working right now. Everybody is laid off or
companies are going bankrupt.
Mr. Lamborn. OK, thank you. The Chair now recognizes the
Ranking Member for any questions he might have.
Dr. Lowenthal. Thank you, Mr. Chair. You know, I am trying
to get my arms around--as I mentioned in my statement--the need
for the bill. And let me follow my thinking.
In the 1980s, the Forest Service sued a mineral owner for
converting or constructing roads without at least alerting the
Forest Service. The district court agreed that, at that time,
this company had to provide the Forest Service with additional
information, and things were moving along at that time. Then,
through 1992 we had amendments to the Mineral Leasing Act, and
that the U.S. Forest Service would issue a notice to proceed,
that they received this and they needed at least a 60-day
notice for this before proceeding.
Then came an attorney for the Forest Service in 2007 who
said that maybe this notice to proceed was a major Federal
action, although the Forest Service didn't do anything about
that, whether that would trigger anything. Environmental groups
then sued and there was an agreement that was made between the
Forest Service and that--potentially that there might have to
be some kind of environmental NEPA review, or some kind of
review.
The courts, in 2011, found in favor of the oil companies,
that the notice to proceed is not a major Federal action, it is
not a permit, and that the Forest Service has no discretion to
prohibit access to mineral rights. But it also said in that
that it reaffirmed that the Forest Service is entitled to
advance notice from mineral rights owners before operation. So
that is what the court said--Federal action is not needed,
except that there still needs to be this 60-day notice to go
forward. So, given that, instead of this bill just getting rid
of the parts that they find in that 1992 Mineral Leasing Act as
onerous, they threw out the 60-day notice also.
My question is, why not just keep the 60-day--why not a
statement that just says it limits the Forest Service's
authority to just the 60-day notice? Why, since the courts have
said that is not only permissible, but that it should be there,
it reaffirmed the Forest Service, why are we going through this
thing to eliminate the entire section? Why not just say nothing
in this--the Forest Service is limited to just having that 60-
day notice, that has to be there?
That would get us off this question about intent and
anything else that is going on, that potentially new
regulations could come up, and so forth. The courts have
decided that, but they also have reaffirmed the need.
Don't you think that this is an over-reach--I am asking all
the members of the panel--by also throwing out the 60-day
notice?
Mr. Mayer. Sir, the 60-day notice is not being thrown out
by any----
Dr. Lowenthal. Tell me where it is not being thrown out.
Mr. Mayer. The 60-day notice was established by the Federal
District Court in 1980 and is in full force and effect today,
and has been in full force and effect since the date of that
ruling. The only thing the 1992 Act did was simply put that
into the statute itself. The 1992 Act is, if you will, the
vestigial organ that needs to----
Dr. Lowenthal. But by limiting this and throwing out that
statement, couldn't it be perceived that it was the intent of
the Congress to eliminate the 60-day notice, too?
Mr. Mayer. Not at all. The Federal district decision
remains in full force and effect. It was an interpretation of
Pennsylvania law, and it applies completely on the Allegheny
National Forest and the state of Pennsylvania----
Dr. Lowenthal. This wouldn't be an attempt of Congress to
overturn that decision?
Mr. Mayer. Absolutely not, sir. Absolutely not. And I am
100 percent assured of that statement. Absolutely not.
Dr. Lowenthal. I wonder what others think.
Mr. Furnish. I guess I would ask him if he is an attorney.
Mr. Mayer. I am.
Mr. Furnish. Is he a legislator? Because I interpret this
H.R. 3881 very differently.
Dr. Lowenthal. And how do you interpret it?
Mr. Furnish. Well, I interpret it to rescind the 1992 Act,
which provided for 60-day notice.
Dr. Lowenthal. That is what I----
Mr. Furnish. It was codified in law. Now it is being
rescinded from law.
Dr. Lowenthal. I am just not sure why we are going down
this route when, in fact, everyone agrees that the 60-day
notice is appropriate, why we are even entertaining that.
Mr. Shuffstall. If I may, there are two issues: one,
private property rights, and the rights of the Federal
Government as an owner of the surface vis a vis the owner of
the subsurface. And a 60-day accommodation rule is a very good
rule, and it is one that the industry tends to follow when it
is engaged not only with the Federal Government, but also
private citizens, many of whom are friends, neighbors,
relatives, and customers of the bank.
The second question, though, is the action of the Federal
Government as a regulatory action that impinges or infringes on
private property rights to the point where it could be
considered a taking. And to me, that is the fundamental
difference. Do you require legislation for a communication
regarding relative accommodation of property rights, surface
versus subsurface, or do you engage in regulation? And at what
point does that regulation become a taking?
Dr. Lowenthal. But----
Mr. Mayer. Could I just add briefly? The----
Mr. Lamborn. No, I am afraid the time is up.
Mr. Mayer. OK.
Mr. Lamborn. The Chair now recognizes the sponsor of the
bill, the Representative from Pennsylvania, Mr. Thompson.
Mr. Thompson. Thank you, and thank you to the Ranking
Member for his questions, too. That is appreciated, because I
think it is important to flush that out. You heard from an
attorney. How about you hear it from a law maker, the author?
If I wanted to specifically go after that 60 days, I would
have referenced specifically that 1980 court order in terms of
60 days. I think the 60 days is within the confines of the
whole reasonable access process, in terms of that interaction
between the subsurface right owners and the surface owners.
So my questions--I want to talk about--well, there are just
so many things to talk about here, so let me be selective.
Mr. Cline, can you estimate how much money it costs to sue
the Federal Government to litigate this issue in the courts and
prove that the families and businesses of Northwestern
Pennsylvania were on the right side of the law?
Mr. Cline. I don't know the exact figure, just what Mr.
Mayer threw out, about $4 million.
Mr. Thompson. Would you agree that is the ballpark?
Mr. Mayer. That would be my estimate, having been involved
in tracking many of the expenses, that about $4 million--there
were 7 cases, ultimately, that were filed in----
Mr. Thompson. Mr. Casamassa, thank you for your service
with the Forest Service. I am a fan of the Forest Service. We
work together, as Chair of the Conservation and Forestry
Subcommittee for the Committee on Agriculture.
How much did defending this regulatory over-reach by the
Forest Service in all those cases that were just referenced
cost the American taxpayer in staff time and additional
budgetary needs, the Equal Access to Justice--I think there was
a payment that was promised to the environmental groups--I
don't know if that ever occurred--on the industry side. Do you
know what the total bill of that was? If it was $4 million for
the plaintiffs, what was it for the defendants, the American
taxpayers?
Mr. Casamassa. Congressman, I don't necessarily have those
figures to determine the total cost associated with the
litigation.
Mr. Thompson. If you could work and get that number for me
specifically, but I have to wonder--I mean reasonable minds
would say if for one party it was about $4 million, I have to
think for the other party it was about $4 million. And we have
a few more attorneys we use when it is the government, with the
Justice Department and those assets and resources.
So my question--let's just say it is $4 million. Let's be
fair and say it was $3 million. When it comes to--we spend a
lot of time talking about wildfires, and how we prevent
wildfires, and how do we make forests more healthy. What could
we do on the issue of wildfires with an additional $3 million
on a particular forest?
Mr. Casamassa. Well, I certainly think, depending on where
you are, there could be----
Mr. Thompson. You can do a lot of restorative work, right?
Mr. Casamassa. I mean activity----
Mr. Thompson. The understory and----
Mr. Casamassa. Yes.
Mr. Thompson. I was just in Washington State with one of
the members of my subcommittee that serves on this committee as
well. And they lost a half-a-million acres. Not all that was
Federal; some was state and some was private. But to continue
to appeal this in the past--and I am looking in the past,
retroactively. That is why this legislation is important,
because we are actually just trying to codify what the courts
have found.
So, my follow-up question to you, Mr. Casamassa, is in
light of the recent court decisions supporting private
property, subsurface mineral owners, can you assure this
committee that the Forest Service will not promulgate any new
rules regulating privately held mineral rights or agree to any
new settlements similar to the 2009 agreement in the ANF, or
engage in--co-join with another--some environmental groups
that, once again, spend millions of taxpayer dollars for
something that has already been repeatedly codified by the
courts.
Mr. Casamassa. Well, Congressman, the Forest Service has no
intention to move forward with anything like that in our
regulatory agenda, when it comes to codifying or proposing any
rules.
Mr. Thompson. So, the Forest Service position--not on this
piece of legislation, I will get back to that--but on what we
are talking about, the Forest Service position on what has been
codified by the courts, the Forest Service is in complete
agreement with what the courts have determined?
Mr. Casamassa. We presently manage the subsurface rights of
individuals and companies on the Allegheny as it relates to the
court ruling, the existing policy, and the 1992----
Mr. Thompson. So what you are saying, representing the
Forest Service today, being the official spokesperson, so you
are saying that what has been codified--the Forest Service is
in agreement with what the courts have codified----
Mr. Casamassa. That is how we----
Mr. Thompson [continuing]. I am sorry, I used the word
``codified,'' wrong process. What the courts have ruled.
Mr. Casamassa. Presently, that is how we are managing the
subsurface activity on the Allegheny.
Mr. Thompson. If the Forest Service is in agreement with
what the courts have found, why is the Forest Service opposing
just providing clarity, so that the agency does not find
itself--that has economic or political motivations or whatever
are being sucked into a future lawsuit?
Why wouldn't the Forest Service--you tell me you actually
agree with the intent of what this legislation does, but I
don't understand why you are opposing the bill today.
Mr. Casamassa. Well, again, I go back to, based on the
existing framework of the court ruling, our policy, as well as
the 1992 Energy Policy Act, that is the frame by which we are
managing the subsurface----
Mr. Thompson. That you have never actually really used. It
was, like, 16 years to get promulgated regulations on that. So
this is not something that you have actually used. The whole
60-day notice thing, which I think is reasonable, actually
predates the 1992 Act back to 1980.
Sorry, Mr. Chairman.
Mr. Lamborn. OK. This is a good discussion. We will now
turn to Representative Hice for any questions he may have.
Dr. Hice. Thank you, Mr. Chairman, and I appreciate each of
you for joining us today.
Mr. Mayer and Mr. Cline, the Forest Service manual states
that Secretary's rules and regulations do not apply to the
administration of outstanding rights. So, with that being said,
it appears to me, at least, that the Forest Service attempt to
apply NEPA to private mineral rights in the Allegheny National
Forest is not only a violation of state and Federal law, but
even a violation of their own policy. Would you agree with
that?
Mr. Cline. Yes, I would agree with that.
Mr. Mayer. Mr. Hice, that was, I think, one of the reasons
the Department of Justice awarded PIOGA the funds under the
Equal Access to Justice Act. And commentators on the case have
noticed that very fact, that the policies and positions of the
Forest Service taken on the Allegheny in the case beginning
back in 2006 departed from their very own policies and rules,
which was even more surprising, certainly to us, when that
occurred.
Dr. Hice. So, is it your opinion that the Forest Service
staff was aware of this when drafting the regulations that led
to the ban on oil and gas leasing in the Allegheny?
Mr. Mayer. Based upon my experience, I am certain they were
aware of what the various policy statements were. They were
reminded continually by us in the oil and gas industry in
different venues and in different forums. And then, as
Congressman Lowenthal mentioned, there was a legal opinion that
came into play back in 2007----
Dr. Hice. Let me keep going with this thought, and I
appreciate your answer.
Mr. Cline, do you have anything to add?
Mr. Cline. Just that being a private business owner--most
of us know that any time a government agency or a state
agency--they are always trying to over-reach their authority
any way that they can do something to force it on you.
Dr. Hice. So, do you believe that employees at the Forest
Service purposely ignored their operating manual?
Mr. Cline. Yes.
Dr. Hice. OK. Mr. Mayer?
Mr. Mayer. I would say they took great liberties with their
interpretation.
Dr. Hice. Is this, in both of your opinions, a rogue
behavior of a single occurrence, or is this symptomatic of a
larger problem?
Mr. Mayer. In my view, I would have a hard time describing
it as rogue, simply because it went from the Allegheny through
the regional office and into the Washington office, in terms of
the policies that were being pursued with respect to the
Allegheny in this particular litigation.
Dr. Hice. OK. Mr. Cline?
Mr. Mayer. I find that unusual, but nonetheless----
Mr. Cline. I agree with what he says.
Dr. Hice. All right. So, this is symptomatic of a larger
problem, right?
Mr. Casamassa, your response?
Mr. Casamassa. Certainly, presently in the regulatory
framework that we work right now, if there is the potential for
some kind of regulation or proposed regulation, those go out
for public comment and notification. All of that, the content
of those comments, are then brought back to the agency. We then
distill that down to the significant points, maybe take a look
at that, and then actually frame out a final regulation.
It is done in a very transparent way right now, and----
Dr. Hice. All right. Let me interrupt you, if I can,
because I have a couple other questions for you. But you are
not answering the issue of ignoring your own policy, and that
is what is at stake here.
Let me ask you this. Roughly how much money has all the
litigation tied to regulating private mineral estate in
Allegheny cost the American taxpayer since 2007?
Mr. Casamassa. Congressman, that is the question that the
Congressman from Pennsylvania had asked me, Congressman
Thompson. At this juncture, I don't have those figures, but I
would certainly be willing to go back and roll that up and
provide it to the Subcommittee Chair.
Dr. Hice. OK. I would appreciate that greatly.
Chairman, I see my time is running out, but I thank you,
and I yield back.
Mr. Lamborn. OK. Thank you. I want to thank the witnesses
for their valuable testimony and the Members for their
questions.
The members of the committee may have some additional
questions for the witnesses, and I guess a couple have already
been asked during the course of questions. I would ask that you
respond to those in writing.
Under Committee Rule 4(h), the hearing record will be held
open for 10 business days for these responses. If there is no
further business, without objection the committee stands
adjourned.
[Whereupon, at 3:20 p.m., the subcommittee was adjourned.]
[ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]
April 29, 2016
House Committee on Natural Resources,
Subcommittee on Energy and Mineral Resources,
1324 Longworth House Office Building,
Washington, DC 20515.
Dear Subcommittee Members:
The undersigned organizations oppose H.R. 3881, the ill-conceived
and misleadingly titled ``Cooperative Management of Mineral Rights Act
of 2015.'' If passed, H.R. 3881 would strip the Department of
Agriculture of important rulemaking authority and make it easier for
oil and gas companies to drill in the Allegheny National Forest,
Pennsylvania's only national forest. In fact, H.R. 3881 would make it
so that certain mineral owners could start drilling in the Allegheny
National Forest without even notifying the federal landowner, the U.S.
Forest Service. Such a result would threaten vast areas of the
Allegheny National Forest that are important for protecting watersheds,
wildlife habitat, and public recreation.
Specifically, H.R. 3881 would amend the Mineral Leasing Act to
repeal 30 U.S.C. Sec. 226(o). This statute requires the owners of
``outstanding'' mineral rights in the Allegheny National Forest to
provide the Forest Service with at least 60 days' notice before
engaging in any earth-disturbing activities related to oil and gas
drilling.\1\ This notice must include, at a minimum: (1) a designated
field representative; (2) a map showing the location and dimensions of
proposed well sites, roads and pipelines; (3) a plan of operations
setting forth a schedule for construction and drilling; (4) a plan to
control erosion and sedimentation; and (5) proof of mineral
ownership.\2\
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\1\ See 30 U.S.C. Sec. 226(o)(2).
\2\ Id. Sec. 226(o)(3).
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These common-sense provisions, which are in no manner burdensome on
the oil and gas industry, grew out of the U.S. District Court's opinion
in United States v. Minard Run Oil Company.\3\ In that case, the Forest
Service sued Minard Run Oil Company after the company cut trees in the
Allegheny National Forest to construct roads, pipelines and well sites
``without notice and without cooperative planning'' with the Forest
Service.\4\ The court noted that Minard Run's actions caused
``devastation'' and ``irreparable damage to the surface of the land
occupied by the Allegheny National Forest.'' \5\
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\3\ 1980 U.S. Dist. LEXIS 9570 (W.D. Pa. 1980) (``Minard Run I'').
\4\ See Minard Run I, 1980 U.S. Dist. LEXIS 9570, at *9, *16.
\5\ Id. at *1, *16.
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The court stated that ``a mineral operator cannot presume to be
capable of adjudging without reasonable advance notice to the surface
owner and therefore, unilaterally, that his operations will not
unnecessarily impair the use of the surface.'' \6\ The court
specifically highlighted the need for oil and gas companies to provide
advance notice when the surface owner holds the lands in trust for the
American people:
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\6\ Id. at *20.
The public has a substantial interest in reasonable advance
notice being afforded for the reason that no natural resources
of value to the public should be compromised unnecessarily in
the process of obtaining another natural resource. The public
has an added interest here, given that the natural resources
owned by [the Forest Service] are held specifically in trust
for the public . . . The public has an interest in preservation
of the Allegheny National Forest as a part of preservation of
environmental resources and our abundant forest areas and so
the public benefit is to this extent involved in the rights of
the [Forest Service] considering the use to which the land has
been put . . . The interest of the public lies in the
preservation of valuable natural resources on the surface of
lands from unnecessary impairment in the course of development
of a mineral resource.\7\
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\7\ Id. at *11, *16, *20 (emphasis added).
Eliminating the notice requirements in 30 U.S.C. Sec. 226(o), as
H.R. 3881 would do, will not promote ``cooperative management of
mineral rights'' in the Allegheny National Forest. Rather, it will
trample federal safeguards for managing public natural resources that
have been in place for nearly forty years. This will only embolden oil
and gas companies to be less cooperative, as they were before the
court's opinion in Minard Run I.
To advance H.R. 3881, its proponents have severely mischaracterized
recent litigation regarding the Forest Service's authority to regulate
the exercise of private mineral rights in the Allegheny National
Forest.\8\ In that litigation, the U.S. District Court for the Western
District of Pennsylvania enjoined the Forest Service from requiring
preparation of an environmental analysis under the National
Environmental Policy Act before mineral owners could exercise their
mineral rights because, according to the court, ``the Forest Service
does not possess the regulatory authority that it asserts relative to
the processing of oil and gas drilling proposals.'' \9\ The proponents
of H.R. 3881 erroneously claim that ``[t]hroughout this litigation, the
sole authority claimed by the Forest Service and environmental groups
for promulgation of regulations to exercise regulatory authority over
private mineral estate[s] was . . . 30 U.S.C. Sec. 226(o).'' \10\ In
doing so, the proponents of H.R. 3881 imply that the most recent Minard
Run litigation nullified 30 U.S.C. Sec. 226(o), which they refer to as
an ``antiquated statute.'' \11\ This is emphatically untrue.
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\8\ See e.g., Subcommittee on Energy and Mineral Resources, Hearing
Memorandum, pp. 3-4 (Apr. 18, 2016) (``Hearing Memo''), available at
http://naturalresources.house.gov/uploadedfiles/hearing_memo_-
_leg_hrg_on_hr_3881_04.l9.16.pdf.
\9\ Minard Run Oil Co. v. U.S. Forest Service, 2009 WL 4937785, *31
(W.D. Pa. 2009) (``Minard Run II''), aff'd 670 F.3d 236 (3rd Cir. 2011)
(``Minard Run III'').
\10\ Hearing Memo, pp. 3-4 (emphasis added).
\11\ Id. at 4.
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Indeed, the District Court's 2009 preliminary injunction opinion
was limited to interpreting whether the Forest Service's authority
under an entirely different statute, the Organic Act (16 U.S.C.
Sec. 551), applied to the exercise of private mineral rights in the
Allegheny National Forest.\12\ While the court stated that the Forest
Service lacked authority to regulate under 16 U.S.C. Sec. 551, the
court nevertheless affirmed the applicability of ``the procedures set
forth in [Minard Run I] and 30 U.S.C. Sec. 226(o).'' \13\ The Third
Circuit affirmed this holding.\14\
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\12\ See Minard Run II, 2009 WL 4937785, *28-*31.
\13\ Id. at *34 (emphasis added). Note: the undersigned
organizations disagree with both the District Court and Third Circuit
opinions regarding the Forest Service's purported lack of authority to
regulate the exercise of private mineral rights pursuant to 16 U.S.C.
Sec. 551.
\14\ See Minard Run III, 670 F.3d at 244, 254 (citing 30 U.S.C.
Sec. 226(o) and stating the Forest Service ``is entitled to notice from
owners of these mineral rights prior to surface disturbance[.]''
(emphasis added))
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During the merits stage of the Minard Run litigation, the District
Court reiterated the applicability and importance of the notice
provisions contained in Minard Run I and codifIed in 30 U.S.C.
Sec. 226(o):
As has been recognized by all parties, my previous opinion
reaffirmed what I referred to as the ``Minard Run [I]
approach,'' which included a 60-day notice requirement derived
from the holding in the prior Minard Run [I] case. However, my
order did not, and was not intended to, grant the drillers
carte blanche to enter the ANF and commence drilling operations
on the 61st day if unable to reach an accommodation with the
Forest Service . . . Depending upon the unique circumstances of
any given case, a period of time longer than 60 days may be
entirely appropriate and necessary in order for the dominant
and servient estateholders to engage in a meaningful and
cooperative accommodative effort.\15\
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\15\ Minard Run Oil Co. v. U.S. Forest Service, 894 F.Supp.2d 642,
647 (W.D. Pa. 2012) (``Minard Run IV'') (emphasis added).
Contrary to the proponents of H.R. 3881, both the District Court
and the Third Circuit unequivocally affirmed the applicability of 30
U.S.C. Sec. 226(o). Thus, this statute is not ``antiquated''--rather,
it is an important part of the Forest Service's statutory authority to
protect the Allegheny National Forest from ``unnecessary impairment in
the course of development of a mineral resource.'' \16\
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\16\ Minard Run I, 1980 U.S. Dist. LEXIS 9570, *20.
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Finally, it is important to note that the ramifications of
repealing 30 U.S.C. Sec. 226(o) would likely be felt far beyond the
boundaries of the Allegheny National Forest. For example, the Forest
Service Manual (``FSM'') incorporates provisions quite similar to 30
U.S.C. Sec. 226(o).\17\ These provisions apply to the administration of
outstanding mineral rights in all national forests, not just the
Allegheny. Therefore, repealing 30 U.S.C. Sec. 226(o) would likely be
just the opening salvo of a broader push by industry to curtail
regulation of oil and gas drilling on National Forest System lands
throughout the nation.
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\17\ See FSM 2832.
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We urge members of the Subcommittee to vote ``no'' on H.R. 3881.
Sincerely,
Ryan Talbott, Executive
Director Joe Lovett, Executive Director
Allegheny Defense Project Appalachian Mountain Advocates
Tierra R. Curry, Senior
Scientist Denise Boggs Executive Director
Center for Biological
Diversity Conservation Congress
Gary Macfarlane, Ecosys.
Def. Dir. Tabitha Tripp, Co-President
Friends of the Clearwater Heartwood
Amy Mall, Senior Policy
Analyst Janet Keating, Executive Director
Natural Resources Defense
Council Ohio Valley Environmental
Coalition
Jenny Lisak, Co-Director Lori Andresen, President
Pennsylvania Alliance for
Clean Water and Air Save Our Sky Blue Waters
Laurie Barr, Co-Founder Lena Moffitt, Director
Save Our Streams PA Inc. Beyond Dirty Fuels, Sierra Club
Thomas Au, Conservation
Chair Misty Boos, Director
Sierra Club Pennsylvania
Chapter Wild Virginia
[all]