Allegany State Park eyed for development by private oil and gas company

Drake Well, Titusville, PA. The first successful oil well, drilled 150 years ago this August.

The roots of the global petroleum and natural gas industry don’t reach into Texas or the Middle East, but into Northwestern Pennsylvania and Southwestern New York. In the middle of the 19th century, over a period of a few decades, refineries sprung up, along with the occasional millionaire as more and more uses were found for the black gold and its derivatives. This history is echoed in brand names like Pennzoil and Quaker State, even though the Royal Dutch/Shell Group purchased those brands in 2002.

As we all know, the whole world runs on the stuff. But it’s still not easy or clean to obtain.

Now, the national debate about drilling in natural, public areas is heating up locally as the US Energy Development Corporation, a private company located at 2350 North Forest Road in Getzville, proceeds with plans to develop five new wells in Allegany State Park.

According to a 2005 Business First article, US Energy “specializes in the exploration and drilling of natural gas for investment. Acquisitions, joint ventures and strategic alliances are also part of the company’s growth strategy.” The story explains that the “economic return along with the associated tax advantages has made this type of investment profitable for many investors.”

Recently, New York State Assemblyman Sam Hoyt and other concerned citizens have been turning their attention to the issue, as they did over a decade ago when the Pataki administration was moving toward selling timber rights in the park. Back then, former 10,000 Maniac Natalie Merchant hopped on the bandwagon and public opinion swung against the lumber industry. The old-growth trees got a reprieve.

Hoyt is currently spearheading efforts with the NYS Office of Parks, Recreation and Historic Preservation “to forever protect Allegany from commercial logging and oil and mineral mining.”

Just as pro-drilling forces are losing their perkiest national cheerleader in ex-Alaska Governor Sarah (“Drill, baby, drill!”) Palin, their case is further compromised by US Energy Development Corporation’s recent rebuke from the Pennsylvania Department of Environmental Protection, for their activities just south of Allegany State Park, across the state border in McKean and Warren counties, Pennsylvania.

On July 10, the department issued a cease-and-desist order to US Energy “for persistent and repeated violations of environmental laws and regulations. The order prohibits the company from conducting all earth disturbance, drilling, and hydro-fracturing operations throughout Pennsylvania.”

Over a period of just two years, beginning in August, 2007, US Energy chalked up 302 violations of the Clean Streams Law, the Dam Safety and Encroachments Act, the Oil and Gas Act, and the Solid Waste Management Act. US Energy is the owner and operator of the wells in the Allegheny National Forest in Pennsylvania, which borders Allegany State Park in New York. They also operate wells on land owned by the City of Bradford Water Authority.

According to the order, one third of the violations have been corrected, but the civil penalties for those violations have not been resolved. Violations cited by the DEP include the unpermitted discharge of residual and industrial waste into the ground and the waters of the Commonwealth.

In Pennsylvania, US Energy has had to “cease all gas and oil well activities including, but not limited to well stimulation, well drilling, road construction, pipeline construction and any other related well activities” in the state until the DEP notifies them in writing that they have complied with all the obligations of the order. They must also stop all “earth disturbance activities” except those necessary to fix the damage they’ve already done. The actual cease and desist order, including a list of the hundreds of violations is available at Artvoice.com.

Prior to Allegany State Park’s official designation in 1921, the area was widely drilled for oil, including the first oil well in New York State, which was completed in 1864. While the state controls the surface rights to the park land, private interests have been unwilling to relinquish ownership of what lies beneath to this day.

One bill supported by Hoyt would create a sunset provision for privately held oil and gas interests beneath the park.

US Energy spokesperson Matt Iak confirmed that they have access to mineral rights in Allegany State Park, and that they are “going through the various channels” to make those wells a reality.

However, a spokesperson for the NYS Department of Environmental Conservation reports that “US Energy has never applied for drilling permits in Allegany State Park. That being said, they have been drilling wells on a regular basis in other parts of Region 9 area (Western New York), and DEC does receive drilling applications from them on a regular basis.”

When asked about the Pennsylvania DEP order, Iak said, “It’s premature for us to make a comment. I can tell you that we’re both working with the same interest at heart, and it’s in very good spirit right now.”

He would not respond to any particular charges listed in the order, including failure to maintain secondary containment at oil stock tanks, unpermitted discharge of polluting substances including residual and industrial waste, and dozens of cases of failure to implement best management practices.

“I’m not saying I don’t want to respond. I’m not in a position to respond until they give you the final word on what’s going on, and I think you’ll have a different opinion at that point in time,” Iak said.

A spokesperson for the Pennsylvania DEP said “the scope and magnitude [of US Energy’s violations] is not commonplace, and that’s why we took the action that we did.”

—buck quigley

Further Reading (files in PDF format)

• 2009 Final Order
• Exhibits A & B
• DEP orders U.S. Energy to cease drilling