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Eminent Domain: Laws and Loopholes that Benefit Fracking and Pipeline Companies

Eminent Domain: Laws and Loopholes that Benefit Fracking and Pipeline Companies

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The rapid expansion of fracking — a process that the oil and gas industry uses to extract natural gas and oil from shale rock formations buried deep within the Earth — has caused environmental and public health problems, and weak eminent domain laws and laws that cater to fracking and pipeline companies will only help spread these problems.
The rapid expansion of fracking — a process that the oil and gas industry uses to extract natural gas and oil from shale rock formations buried deep within the Earth — has caused environmental and public health problems, and weak eminent domain laws and laws that cater to fracking and pipeline companies will only help spread these problems.

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Published by: Food and Water Watch on Aug 01, 2013
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08/28/2013

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he rapid expansion of hydraulic fracturing, or fracking — a process that the oil andgas industry uses to extract natural gas and oil from shale rock formations burieddeep within the Earth
1
— has caused environmental and public health problems,
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andweak eminent domain laws and laws that cater to fracking and pipeline companies willonly help spread these problems.
Eminen domain is he governmen’s power o ake privaeland or “public use” as long as “jus compensaion” is pro-vided, as required by he Fifh Amendmen’s “akings” clause.
3
 Saes delegae eminen domain auhoriy o ciies, quasi-pub-lic eniies and even cerain privae companies,
4
bu he degreeand ype o power varies in each sae.
5
Some local govern-mens can urher delegae eminen domain powers o speciic“designees,” such as a developmen auhoriy.
6
Indeed, many ederal and sae eminen domain laws seem oavor or provide explici regulaory loopholes and exempionsha benei oil and gas companies.
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Seizing land or he developmen o oil, gas and coal — alsoreerred o as naural resource developmen akings — ofensuppors corporae gain, no public use.
7
Tradiionally, “publicuse” reerred o public projecs like roads, civic buildings,parks and oher aciliies ha could be direcly used by all.
8
 Bu in he las cenury, case law has broadened wha consi-ues a “public use” o include economic developmen.
9
Now,pipeline and oil and gas companies can more easily pursueland grabs by claiming ha eminen domain or he consruc-ion o pipelines or shale gas and oil developmen will osereconomic developmen and is hereore a “public use.”
10
As Universiy o Minnesoa Law proessor Alexandra Klassexplained, “[E]minen domain is ofen a ool used by privaeindusry o promoe privae ineress a he expense o oherprivae paries wih no sae or local governmen involve-men in he eminen domain proceeding.”
11
She also saed,“In many naural resource-rich areas o he counry … heknock on he door is less likely o come rom a governmenoicial and much more likely o come rom a mining, oil, orgas company represenaive.”
12
 The conroversial
Kelo v. Ciy of New London, Connecicu (2005) 
opinion is one o he hree Supreme Cour decisionsha helped broaden he Fifh Amendmen’s akings auhor-iy wih is broad inerpreaion o “public use.”
13
In his case,he Supreme Cour ruled in avor o New London, decidingha he ciy could ake privae propery and give i o anoher
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Eminent Domain
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 No person shall be deprived of life, liberty or property unless the oil and gas industry says so
 
2
privae eniy or “economic developmen.”
14
A public use, ineec, became reinerpreed o mean public purpose.
15
Now i seems ha oil and gas companies are capializing onhis, and oher preceden-seting cases, by claiming ha emi-nen domain or he consrucion o a naural gas pipeline orracking well will oser economic developmen.
16
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Pipeline inrasrucure and racking ofen go hand in hand.
17
 By expanding access and opening up markes, pipelines canaccelerae he developmen o unconvenional oil and gasresources hrough racking.
18
 Under he ederal law known as he Naural Gas Ac,
19
heFederal Energy Regulaory Commission (FERC) is he leadgovernmen agency involved in approving or rejecing pipe-lines ha cross sae borders.
20
I FERC concludes, based on isnarrow review, ha “he public beneis rom he projec ou-weigh any adverse eecs,”
21
hen FERC can gran a pipelinecompany a “ceriicae o public convenience and necessiy.”
22
 This ceriicae grans he company he righ o exercise emi-nen domain and ake privae propery or consrucing andmainaining a pipeline.
23
For insance, a 2012 FERC decision allowed Tennessee GasPipeline Co., a subsidiary o Kinder Morgan, o use eminendomain o ake propery rom an 87-year-old New Jersey manand his wie or he consrucion o a pipeline ha will rans-por Pennsylvania’s Marcellus Shale gas.
24
In December 2012,a ederal cour relied on FERC’s decision ha he pipeline wasin he public ineres o auhorize he company o ake hecouple’s propery beore even compensaing hem.
25
By Feb-ruary 2013, even hough consrucion permis had ye o beapproved, he company began cuting down he rees direclybehind he couple’s home.
26
 Moreover, FERC ails o ully accoun or how individualpipeline projecs, aken ogeher wih any resuling increasein drilling aciviy, negaively impac public healh and heenvironmen.
27
And his is jus one example o how he oil andgas indusry’s legal advanages can hur homeowners.
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Alhough individual sae laws vary, several saes also providespecial righs and beneis o he oil and gas indusry. Indeed,a review o eminen domain laws shows ha rom he eas ohe wes coas, no one is sae rom indusry land grabs.
West Virginia
Wes Virginia considers oil and gas pipeline consrucion andmainenance a “public use” or which privae land can beaken or damaged.
28
 
Utah
In Uah, eminen domain can be pursued o condemn landor “gas, oil or coal pipelines, anks or reservoirs” and or roadconsrucion o access oil and gas resources.
29
 
Washington
The Underground Naural Gas Sorage Ac in WashingonSae declares, “The underground sorage o naural gas willpromoe he economic developmen o he sae and provideor more economic disribuion o naural gas o he domesic,commercial and indusrial consumers o his sae, herebyserving he public ineres.” As a resul, naural gas companieshave cerain eminen domain righs.
30
 
North Carolina
Despie legalizing horizonal drilling and racking in 2012,Norh Carolina has no begun o develop shale gas due oa racking moraorium,
31
bu he sae grans oil and gascompanies he righ o condemn land o consruc pipelinesor naural gas ransporaion.
32
As a supervising atorney a
 
3
he Duke Environmenal Law and Policy Clinic poins ou,here could be even bigger implicaions han aking land orpipeline consrucion.
33
 Norh Carolina grans eminen domain auhoriy o cerainprivae eniies; sae law explicily says, “Corporaions … havehe power o eminen domain or he consrucion o … pipelinesor mains originaing in Norh Carolina or he ransporaion o peroleum producs, coal, gas, limesone or minerals.
34
 According o an aricle in he Norh Carolina Journal o Law& Technology, Norh Carolina should proec he righs o individual propery owners by amending is consiuion andeminen domain laws o limi he oil and gas indusry’s con-demnaion auhoriy.
35
 
Pennsylvania
 
On Valenines Day 2012, Pennsylvania Governor Tom Corbet— who personally received $1.8 million in campaign conribu-ions rom he naural gas indusry beween 2000 and April2012
36
— showed his love or he indusry by signing ino lawAc 13,
37
a piece o legislaion revising he commonwealh’sOil and Gas Ac.
38
Among he dieren aces o he law wereprovisions inended o preven local zoning rules or gas drill-ing and racking, bu in July 2012, he Commonwealh Courruled hose provisions unconsiuional.
39
Unorunaely,challenges o he eminen domain provisions o Ac 13 weredismissed,
40
so oil and gas companies now have he auhoriyo pursue eminen domain o ake cerain propery or “injec-ion, sorage and removal rom sorage o naural gas.”
41
 Pennsylvania’s pro-indusry Ac 13 is no surprising consid-ering he inancial growh ha is occurring in he pocke-books o Pennsylvania’s eleced oicials. MarcellusMoney.org — a projec o Common Cause PA and ConservaionVoers o PA — repored ha as o April 2012, naural gascompanies and associaed indusry groups had spen $8million on campaign conribuions since 2000 and nearly $16million on lobbying expendiures since 2007 jus in Penn-sylvania, and $5 million was spen o lobby Pennsylvaniaoicials in 2011 alone.
42
 
Texas
Upon signing a bill curbing some uses o eminen domain,Texas Governor Rick Perry old he sae Agriculure Commis-sioner, “I don’ suppose here’s anyhing ha’s more impor-an han our privae propery righs in he sae o Texas.”
43
 Ye he rule ha Perry signed ino law exemped oil and gaspipelines rom he new resricions on eminen domain.
44
Thelaw expressly exemped energy ransporers, which ransporoil, gas or oil and gas producs by pipeline,
45
and common-carrier pipelines, which are pipelines ha ranspor crudeperoleum, coal and cerain oher subsances.
46
 To become designaed as a common carrier, a company simplysubmis a one-page paper o he Texas Railroad Commission,he sae agency ha oversees inrasae pipeline raes andsaey, and claims saus on he paper (called a T-4 orm) bychecking he righ line.
47
Neiher he Railroad Commissionnor any oher sae agency mus approve or permi he con-srucion o an inrasae pipeline by a common carrier or gasuiliy pipeline company.
48
The process o esablishing common-carrier saus lackscerain due process proecions, such as public noiica-ion and hearings, which are necessary or eminen domainproceedings under he Foureenh Amendmen’s due processclause.
49
For example, in he Texas Supreme Cour case
Texas Rice Land Parners Ld. v. Denbury Green Pipeline-Texas, LLC,
 he cour’s opinion by Jusice Don Willet said: “The RailroadCommission’s process or handling T-4 permis appears o beone o regisraion, no o applicaion. The record suggessha in acceping an eniy’s paperwork, he Commissionperorms a clerical raher han an adjudicaive ac. The reg-isran simply submis a orm indicaing is desire o be clas-siied as a common (or privae) carrier. No noice is given oaeced paries. No hearing is held, no evidence is presened,no invesigaion is conduced.”
50
 Alhough he Texas Supreme Cour ruled in his March 2012opinion ha he curren mehod o sel-declaring commoncarrier is insuicien under Texas law o acquire “unchallenge-able condemnaion power,
51
as o he second quarer o 2013no reormaion bills had been passed.
52
And, in Augus 2012,Lamar Couny Judge Bill Harris ruled via an email rom hisiPhone ha TransCanada, he company behind he KeysoneXL pipeline, had he power o eminen domain and could akepar o a armer’s land or pipeline consrucion.
53
 
PHOTO BY SHUTTERRUDDER/BIGSTOCK.COM

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