Driller Offered $15 M for Access to Loyalsock State Forest

  • Flagging along the Old Loggers Path, in Loyalsock State Forest, could mean gas development. Photo: Reid R. Frazier

Anadarko Petroleum offered the Pennsylvania Department of Conservation and Natural Resources $15 million for surface use to a section of the Loyalsock State Forest known as the Old Logger's Path, according to a letter obtained by the environmental group PennFuture. 

The tract has been the focus of environmental groups, who argue that a rare legal clause gives the state the right to deny drillers access to the 18,000 acre portion of the forest. The DCNR says that it does not have the right to control the access, since it does not own the mineral rights. Les Greevy, a Williamsport oil and gas attorney familiar with the tract, told The Allegheny Front in January that the state did have the right. 

Anadarko owns half the mineral rights to the tract. When asked about the company's plans for the site, Mary Wolf, an Anadarko spokeswoman, said in an e-mail: "At this time, we have no approved plans for the development of our mineral interests in the Loyalsock State Forest."

In the August 2012 letter from DCNR Secretary Richard Allan to Anadarko Vice President Douglas Lawler, Allan says the $15 million represents "a substantial discount" to what the DCNR would typically get in a surface use agreement of this type. The DCNR calculated the going rate to be $22,273,401. But Allan said the department would "entertain a "one-time payment" of $15 million if Southwestern Energy--which holds a lease on the other half of the mineral rights--would also agree to Anadarko's development plan. 

Other terms, outlined in the letter:

--$4,000/acre signing bonus to DCNR

--18 percent royalties on gas that comes from the wells

--500 proposed acres of state forest to be be converted to natural gas activities

The state received about $400 million in bonuses for leasing 700,000 acres of state forest land for drilling. Anadarko is the largest leaseholder of state land, with about 150 wells drilled on 148,000 acres of leased state land.  Later, a DCNR study found no further land could be leased while maintaining the forests' integrity and health. In 2010, former Gov. Ed Rendell signed a moratorium on new leases in the state. Gov. Tom Corbett has thus far upheld the moratorium. 

The forest is known habitat for species like the timber rattlesnake and pitcher plants. A DCNR survey of the land found rare plants like creeping snowberry and the great-spurred violet, a so-called “proposed rare” plant in Pennsylvania.