Jump to Navigation
Jump to Content

Minard Run Oil Co. v. United States Forest Service

ELR Citation: 41 ELR 20294
Nos. Nos. 10-1265, -2332, (3d Cir., 09/20/2011) Aff'd

The Third Circuit upheld a preliminary injunction against the U.S. Forest Service prohibiting it from halting any drilling in the Allegheny National Forest until a multi-year, forestwide EIS under NEPA is complete. Until recently, oil and gas drilling in the Forest was managed through a cooperative process whereby private mineral rights owners would provide 60 days advance notice to the Service of their drilling plans and the Service would issue owners a "notice to proceed" (NTP), which memorialized any agreements between the Service and the mineral owner about the drilling operations. In 2009, however, as a result of a settlement agreement with environmental groups, the Service changed its policy and decided to postpone the issuance of NTPs until it completed an EIS to examine oil and gas drilling in the Forest. Mineral owners and related businesses affected by this new policy filed suit, arguing that as a result of the settlement agreement, the Service had imposed a de facto drilling ban in the Forest and that this ban exceeded the authority of the Service and was contrary to NEPA and the APA. A lower court issued a preliminary injunction enjoining the ban and requiring the Service to return to its prior, cooperative process for issuing NTPs. The Third Circuit affirmed the lower court's decision. The mineral owners and businesses are likely to succeed on their claim that NEPA does not require the Service to conduct an environmental analysis prior to issuing an NTP, as the issuance of an NTP is not a "major federal action" under NEPA. They are also likely to succeed on the merits of their claim that the settlement agreement is a substantive rule that must be promulgated pursuant to the notice-and-comment procedures of the APA. In addition, the Service's moratorium on new drilling caused irreparable harm because it infringed upon the mineral owners' property rights and threatened bankruptcy or closure for some businesses. And granting the injunction would vindicate the public's interests in aiding the local economy, protecting the property rights of mineral rights owners, and ensuring public participation in agency rulemaking as required by the APA.