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Eminent-domain questions divide even pipeline companies

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Ronnie Moore, from Oklahoma City, OK, and working for Appalachian Pipeline Construction finishes off the top weld of the connection bewteen the two pipes sections in the Springville Line just north of Dallas, PA. (Michael Bryant / Staff Photographer)
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The issue divides even pipeline companies operating in Pennsylvania: Should they have the power to bury their lines on people's land without permission?

Equipped with the potent - and to some, controversial - tool of eminent domain from the state Public Utility Commission, companies would gain broad power over their pipelines' pathways.

The major companies that operate interstate gas transmission lines already have such condemnation power to acquire the right-of-way; it comes along with the required approval of their lines from the Federal Energy Regulatory Commission (FERC).

A New York company that last month won FERC approval to build a $257 million pipeline in Northeastern Pennsylvania already has filed nearly 100 condemnation motions for its right-of-way.

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    But in Pennsylvania, most of the thousands of miles of new pipelines being "trenched" or on the drawing boards are so-called gathering lines, wholly within state borders, that tie into transmission lines. Extending eminent-domain rights to them would vastly expand the number of homes and communities that could be affected.

    As part of the eminent domain process, there would be a court hearing to determine a fair price for the right-of-way. Even so, Stephen Saunders, a Scranton lawyer and an expert on pipeline issues, said that condemnation strips residents of the right to walk away from a deal - and dramatically undercuts their negotiating position.

    For nearly two years, a fight to gain eminent-domain clout for these lines was spearheaded by Laser Northeast Gathering Co., a Scranton-area firm building a $37 million, 30-mile pipeline in Susquehanna County.

    In a closely watched case, Laser was the first pipeline company to ask the PUC to deem it a utility, a prerequisite for exercising eminent domain.

    Two other pipeline companies made similar applications. And in a ruling in one of those, a hearing examiner has already said the case could trigger a granting of utility status to all pipeline firms.

    Opposition to Laser was swift, from environmental activists, some residents, and even other pipeline firms.

    Industry opponents argued that PUC oversight, which could mean approval of rates, made no sense for the competitive pipeline business.

    In an unusual alliance, though, Laser reached an agreement with the client of an environmental law firm, Earthjustice, to make safety and environmental upgrades to the pipeline in return for support before the PUC.

    In an interview, Earthjustice attorney Deborah Goldberg said her group was concerned that, unlike federal regulators, the PUC would grant firms eminent-domain rights, yet impose few environmental controls.

    She called that "the worst of all worlds."

    Last year, a hearing examiner rejected Laser's argument that it was akin to a utility, but in a significant ruling in May, the PUC reversed her by a 3-2 vote. Then, before a final PUC decision - and a required ruling on whether it would serve the public to label Laser a utility - the firm withdrew its application.

    The other applicants, Peregrine and Pentex, both from Texas, still have cases pending.

    Pentex wants PUC permission to transport gas from new shale wells in seven Bradford County communities. Its president, Mark Casaday, did not return calls.

    In filings to the agency, residents zeroed in on eminent domain, a power granted under the theory that a project's public good outweighs private-property rights.

    In one letter, Trudy Gerlach, who lives in Bradford County, strongly opposed granting Pentex the power to condemn.

    "I think that people who have land should have the right to say what they want done with the land," Gerlach said in an interview.

    As for Peregrine, it wants to build a $16 million, nine-mile pipeline system to serve wells in three Western Pennsylvania counties.

    D. Loren Fuller, a top executive with the small Fort Worth firm, said Peregrine was aware of community resistance.

    "We're not a heavy-handed company," he said. "We don't use condemnation very often at all, well less than half the time."

    Before the owner of the Marc 1 line, Central New York Oil & Gas, won approval, it similarly assured federal regulators it would minimize the use of eminent domain.

    In a critical letter to FERC last month, Goldberg, of Earthjustice, cited the recent flurry of Marc 1 condemnation filings.

    "The number of condemnation applications and the speed at which they were submitted raises significant doubt about whether [the pipeline's owner] in fact was negotiating with property owners in good fath," she wrote.

    Marc 1's owner said it still hoped to reach amiable deals with property owners, but that it was facing pressure because the line won approval later than the firm expected. The firm also said it had to file quickly to start the legal clock ticking for the actions.

    Debbie Hagen, a spokeswoman for Marc 1, said the final number of condemnation filed was a "moving target."

    She said the owner had already withdrawn some of its condemnation filings as it reached agreements.

     


    Contact staff writer Craig R. McCoy

    at 215-854-4821 or cmccoy@phillynews.com.

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