Monthly Archives: August 2015

Sunoco Pipeline Pursuing Power of Eminent Domain

StateImpact has provided strong journalism coverage of various impacts of the Marcellus Shale boom in Pennsylvania. The organization recently published another strong story concerning the multiple court filings of Sunoco Pipeline in attempt to obtain eminent domain power for the Mariner East 2 pipeline.

Sunoco launches eminent domain proceedings for Mariner East 2 pipeline

As Sunoco Logistics steps up efforts to create a pathway for its Mariner East 2 natural gas liquids pipeline across southern Pennsylvania, some landowners are resisting the company’s moves to build the pipeline across their properties.

Residents in at least eight counties are rejecting the company’s offers of cash compensation as too low or unacceptable at any level, and say they will go to court to challenge any assertion of eminent domain that the company makes in an attempt to force its way across private land.

Landowners contacted by StateImpact Pennsylvania accuse Sunoco of making low-ball compensation offers; proposing to locate the $2.5 billion pipeline in places where it could endanger water sources or buildings in the event of a leak or explosion, and of failing to state its plans clearly. Some who have rejected cash compensation have been served with documents that initiate an eminent domain action in court.

The confrontations may represent just the beginning of a process that will pit local communities against energy companies that are sharply expanding Pennsylvania’s pipeline infrastructure in order to ship the abundant resources of the Marcellus Shale to domestic and international markets.

The state could see as many as 30,000 additional miles of new pipeline built in the next 20 years, Department of Environmental Protection Secretary John Quigley said at the first meeting of a statewide task force on pipelines in July.

Meanwhile, Philadelphia-based Sunoco said it is committed to dealing “fairly” with landowners along the 350-mile route from Ohio and West Virginia to Marcus Hook, a suburban Philadelphia town on the Delaware River. The company argues that it has the authority as a “public utility corporation” – a status that is disputed by opponents – to seize people’s land under eminent domain but will only do so as a last resort.

Sunoco-Mariner-East-2

 

 

 

 

 


Courtesy: Sunoco Logistic
This graphic shows Sunoco’s two natural gas liquids pipelines, the Mariner East 1 and the planned Mariner East 2.

“We recognize the enormous responsibility that comes with eminent domain authority and use that authority only as a last resort when negotiations with landowners have failed,” said Jeff Shields, a spokesman for the company. For example, Shields said Sunoco has initiated action against Ellen Gerhart, a landowner in Huntingdon County, after she rejected the company’s offer of $14,000 for building two 24-inch pipelines on three of her 27 acres.

“The Gerharts were recently notified of our intention to file for condemnation in Huntingdon County under eminent domain authority,” Shields said. Gerhart, 60, a former special education teacher, told StateImpact that she’s concerned about the pipeline’s safety and the risk of the natural gas liquids leaking into a pond on her property.

She said she considered seeking more compensation but decided she doesn’t want the pipeline on her property under any circumstances. “I’m totally against this pipeline going in,” she said. “I’m even more concerned now because we are unable to get any kind of straight answer out of the company on where it will run.”

In nearby Cumberland County, landowner John Perry said Sunoco initially offered him $14,000 for his permission to build two pipelines beneath a 75-foot-wide strip of his land in Upper Frankford Township. He rejected that offer, and a later one of $43,000, saying neither came close to representing the value of the land he would lose through construction of the pipeline, which is expected to begin operation at the end of 2016.

Perry, 81, estimated that his land is worth about $10,000 an acre and that the pipeline would take between 30 and 40 acres. Even if the land had a fair market value of $5,000 an acre, a 40-acre parcel would be worth $200,000, far higher than the $43,000 that the company called its final offer, he said. Perry, who has lived on his 200-acre property for 40 years, said he told the company he would accept compensation of $250,000. He said Sunoco hasn’t said anything yet about taking the land through eminent domain but he fears that it will eventually get its way, if only because of political support for the project.

“There is too much political horsepower behind this pipeline for us to get any sympathy from our political people,” he said. “So we accept the fact that probably eventually we are going to have to live with the pipeline.” He rejected the company’s first offer on the grounds that it would significantly reduce his area of usable land, while cutting the value of what was left. Perry has an existing eight-inch Sunoco pipeline on his property which is now part of the parallel Mariner 1 system, and he spent part of the 1990s negotiating the maintenance terms for the older line. “You’re not only taking 75 feet but you are planning to run a much larger pipeline through my property which will impact the value of the property,” he said.

In mid-June, Sunoco made its final offer, telling Perry that if he didn’t accept it within 10 days, the company would begin “condemnation” proceedings that would lead to an assertion of eminent domain in court.

Perry said he has heard nothing from the company since then, and has hired attorney Michael Faherty, who is representing several property owners in the battle against Sunoco’s Mariner East 2. “I’m waiting for the other shoe to drop,” Perry said.

Bryant Minnich, a building contractor who owns 133 acres in Newville, Cumberland County, said Sunoco initially agreed to pay him $10,400 as compensation for cutting down trees to maintain access to the Mariner East 1 pipeline under an agreement dating back to the 1930s.

Minnich, 50, said he only received the payment after a delay of several months when Sunoco wanted access to his land to survey it for the new Mariner East 2 pipeline. He said he initially denied the company permission to enter because the company had not made the payment.

“I said: ‘You owe me damages that you’ve not even responded to, so you can just stay off my property permanently’”, he said. “Within three weeks, because they need something, I finally get my check for the damages.”

The company then presented its plans for the Mariner East 2 work on Minnich’s property, a project that involved cutting a 50-foot swath plus the creation of a work area and a parking lot.

In return, Sunoco offered $18,000, a sum Minnich rejected, saying he might consider a “six-figure” settlement but would prefer that the company stay away altogether. He also dismissed a subsequent offer for $35,600 on the grounds that it would not compensate for the loss of land, where he and his family have lived for 22 years, or for the aesthetic value of his pond, which would be impaired by the construction work.

Within the last three weeks, Minnich said he has received another letter from Sunoco, saying it plans to clear land for Mariner East 2 by pursuing the terms of the original 1930s agreement — which did not place restrictions on the amount of land the pipeline operator can clear – and providing compensation of just $1,100. The company appears to be ignoring a 2002 amendment to the agreement that sets a limit of 40 feet, Minnich said.

Minnich is also represented by Faherty, who has told Sunoco that it must comply with the terms of the amended agreement, Minnich said. “If they come in and try to take more, then we will end up in a court case against them,” Minnich said.

Faherty, who also represents Gerhart and other Mariner East 2 opponents, said Sunoco has begun eminent domain proceedings against about 10 landowners in the last two weeks. Those property owners live between the West Virginia border and Lebanon County and the company appears to be working its way east along the proposed pipeline route, Faherty said. He predicted that resistant landowners in Chester and Delaware counties will be the company’s next target.

He argued that Sunoco has no right to assert eminent domain because, since the pipeline extends into Ohio and West Virginia, it is an interstate entity and is therefore regulated by the Federal Energy Regulatory Commission, and not by Pennsylvania authorities.

If Mariner 2 was planned to operate only in Pennsylvania, as Mariner 1 does, it would be subject to eminent domain but it is outside the state’s jurisdiction because of its interstate status, he said. The two pipelines jointly make up the Mariner East project.

Faherty said his argument was upheld by a York County judge in 2014 and that he, Faherty, will make it again in a Washington County case that is scheduled for trial in October. “The argument has already been decided so Sunoco should not get a second bite of the apple,” he said.

Opponents of Mariner East 2 include the Clean Air Council, an environmental group whose senior litigation attorney, Alex Bomstein, said the project has sparked more opposition than most pipeline plans. He argued that Sunoco has antagonized public opinion by making different arguments to the PUC, FERC and local zoning boards, depending on its needs at different times.

“It gives different answers to different agencies,” Bomstein said. “People are encountering this type of dishonesty at different levels.” Bomstein estimated that Sunoco has begun eminent domain proceedings against about 20 landowners so far.

Shields of Sunoco reasserted the company’s right to assert eminent domain based on its status as a public utility company regulated by the Pennsylvania Public Utility Commission. “If we file for condemnation, we are proceeding under eminent domain authority, which we consider a last resort,” he said.

Nils Hagen-Frederiksen, a spokesman for the PUC, said the regulator first confirmed Sunoco’s status as a public utility corporation in 2002 and did so again in 2014. Shields would not say how many cases of eminent domain the company is pursuing, how much compensation it has paid, or how many landowners have agreed to Sunoco’s plans.

He declined to confirm the compensation figures reported by Gerhart, Perry and Minnich but said the company’s plan on the Perry property involves a 10-foot extension of an existing 40-foot right of way, while the proposed easement on the Minnich property parallels a right of way for the existing Mariner 1 line.

Written by: John Hurdle | StateImpact

Photo: AP Photo/Cliff Owen
Photo Caption: The planned Mariner East 2 trans-Pennsylvania pipeline is running into resistance from landowners.

By |August 26th, 2015|Categories: Condemnation, Pipeline Construction, Property Rights|

Pennsylvania Property Owners Are Served With Condemnation Papers

Faherty Law Firm is defending property owners that were served with these condemnation papers. The Sunoco Pipeline attempts to obtain eminent domain power are progressing along the proposed route for Mariner East 2 from Ohio, across West Virginia, across Pennsylvania and into Delaware. Eminent domain litigation in Washington County, south of Pittsburgh has been stayed following submission of Attorney Mike Faherty. Sunoco recently filed additional eminent domain actions in Washington, Huntingdon, Cumberland, Dauphin and Lebanon Counties. Faherty Law Firm represents owners of approximately 100 of the threatened properties.

Sunoco recently switched allegations from admitting that Mariner East 2 crosses state lines to allege that Mariner East 2 is now a pipeline only within Pennsylvania! The pleadings of Faherty Law Firm request payment by Sunoco of property owners fees and costs based on the false assertion of eminent domain power.

Sunoco’s fight to build natural gas pipeline heads to Pennsylvania courts

Sunoco Logistics’ effort to build a second natural gas liquids pipeline across Pennsylvania is shifting to the courtroom as it gathers land for its $2.5 billion project. The move sets up a legal battle over the status of pipeline companies as utilities that can take land through eminent domain.

“The issue of public utility status and eminent domain remains unsettled,” said attorney Robert J. Burnett, chair of Pittsburgh firm Houston Harbaugh’s oil and gas practice, who predicted the state Supreme Court eventually would pass judgment. “For purposes of clarity and certainty in the law, this issue needs to be addressed by an appellate court,” Burnett said. Philadelphia-based Sunoco filed at least two dozen condemnation cases in counties, including Washington and Huntingdon, to gain rights of way to land by eminent domain for its Mariner East 2 project. The company considers the action, which follows months of more friendly outreach and open-house meetings, a “last resort” when negotiations with landowners over access and price break down.

“We much prefer to reach an amicable solution,” said spokesman Jeff Shields. “That’s a better outcome for everyone involved.”

The 350-mile pipeline mostly would run parallel to a decades-old line Sunoco reworked as Mariner East 1 to carry ethane, propane and butane from Western Pennsylvania shale wells to a terminal near Philadelphia. State and industry officials have cited such projects as necessary to getting gas and liquids from the abundant deep shale to lucrative markets. Sunoco would not disclose how many cases it filed regarding the more than 2,500 property tracts it seeks to cross. Court records show 14 cases filed in Washington County since May 29.

Hershey-based attorney Michael Faherty is representing three of those property owners and said he’s handling a dozen cases in four other counties. He said a case he won against Sunoco in York County last year, and a lack of special certification by the Federal Energy Regulatory Commission, mean the company does not have eminent domain authority. “I’m protecting property rights. Those rights are being threatened,” said Faherty, whose blog on his firm’s website has several posts devoted to Sunoco’s proceedings. “In particular, Sunoco has been telling property owners it has eminent domain authority.”

State law allows public utilities to use eminent domain. Sunoco points to a ruling in October by the Public Utility Commission — regarding pipeline facilities for Mariner East 1 — that the company is assumed to have that designation. “Sunoco has been certified as a public utility in Pennsylvania for many years,” commissioners wrote.

Although the York County ruling does not set a precedent for other counties, it could persuade other judges, said Burnett, who is not involved in the Sunoco cases. Courts need to reconcile such conflicts between county rulings, state agency rules, and federal regulations, he said. As for Sunoco’s lack of a federal certification as a public utility, Shields said, the status can come from the state, the FERC or both. “They are not mutually exclusive,” he said.

Washington County Judge William Nalitz consolidated some of the 14 cases there and scheduled a trial for October. In Huntingdon County, Ellen Gerhart hopes the cases take much longer to decide. “I’m just not in favor of this pipeline,” said Gerhart, 60, Faherty’s client and the subject of a recent Sunoco filing. Gerhart said she and her husband refused Sunoco’s offer of $4,000 for a 1.69-acre right of way on their 37 acres in Union Township, partly because she couldn’t get answers to questions about environmental concerns. “No pipeline can be 100 percent foolproof,” Gerhart said, citing worries about impacts on a spring, creek and pond on and around her property, and the proximity to neighbors’ homes.

Sunoco conducted open houses in each county in the path of the pipeline, but Gerhart said she didn’t know about the event in her county. Shields said Sunoco invited the Gerharts. “We made every effort to have those meetings, which we’re not required to have, to answer questions,” he said.

Written by: David Conti | TribLive

Photo by: Steph Chambers | Trib Total Media
Photo Caption: Adam Pope, a spokesman for Sunoco Logistics, shows off its plans for the Mariner East 2 liquids pipeline project and answers questions from potentially impacted Westmoreland County residents during an open house at the Adamsburg Volunteer Fire Department on Thursday, Feb. 26, 2015.

 

By |August 13th, 2015|Categories: Condemnation, Pipeline Construction, Property Rights|

Pipeline Companies and Preserved Farms

New Jersey’s adoption of preserved land protection in the face of pipeline threats presents a good model for protections in Pennsylvania and other states.

SADC to Pipeline Companies: Stay off Preserved Farms

The State Agriculture Development Committee (SADC) has provided a procedural overview that highlights many potential roadblocks for pipeline development in New Jersey. These procedures deny attempts for intrastate gas pipelines and electric utilities to cut through preserved farms. The procedures show statewide implications for pipeline companies to adhere to, including no other mechanism to obtain rights of land without condemnation, and setbacks to obtain eminent domain. It includes a long approval process for right of easement, compensation of impacts to land owners and SADC, in addition to forcing the company to use a higher assessment value for preserved farms based on if they were developed.

“We applaud SADC’s position that they cannot sign away their easements on preserved farmland. The people of New Jersey paid to protect these farms from development, not to save them from pipeline companies to through them. SADC is standing up for open space and against these damaging pipelines,” said Jeff Tittel, Director of the New Jersey Sierra Club. “The SADC policy is not to let them come on or survey your land. The pipeline companies do not have this right since the development rights are owned by the SADC. This cannot be done until after they do surveys. By keeping them off your land, you can prevent them from getting eminent domain powers. This has statewide implications because pipelines tend to target open space and preserved farmland.”

The SADC requires utility companies to gain easements or rights to the land along the proposed route prior to submittal of application. Current law governing the New Jersey’s Farmland Preservation Program (FPP) (the “ARDA”, N.J.S.A. 4:1C-11, et seq.) makes it difficult to transfer easements. Even more important, this applies to all pipelines. The SADC explicitly states natural gas intrastate pipelines and electric entities do not have eminent domain. The only way these companies can obtain rights to cross preserved farmland is if a Court approves condemnation.

“The SADC’s position is a serious blow to the pipeline industry in New Jersey. Projects that do not have eminent domain or pipelines that do not cross state boundaries cannot cross a preserved farm. That would prevent the Pilgrim Pipeline and South Jersey Gas and New Jersey Natural Gas proposals from crossing a preserved farm,” said Jeff Tittel. “The SADC decisions come on top of the NJDEP letter last week saying that the PennEast application was incomplete because people didn’t let them survey. These pipelines cut through environmentally sensitive areas, cut through important category 1 streams, and create an ugly scar through our communities. This is a one two punch. It shows that by sticking together and not letting them on your property, we may have the tools to stop this project. Without allowing them on your property, they cannot obtain eminent domain. You should tell them, ‘I don’t hold the development rights, talk to SADC.”

Another setback in a utility’s decision to cut through a preserved farm includes the cost of impacts like crop loss, interference with the planting season, or other damages. That means any damages to the value of the development rights previously purchased must be reimbursed to the grantee (the county/SADC/nonprofit) by the utility company. Another payment goes to the landowner, who is reimbursed because the value of those impacts of the preserved farmland they own.

“Not only can you keep pipeline companies from getting on your property, but if they try to take your property they will have to pay a lot more. They would have to pay you, the SADC, and other agencies; must pay fair market value based on development potential, and consider crop losses and other additional costs. This means the amount of money to receive eminent domain will be significant. That’s why they want to cut a deal with you because they know they would have to pay more if they have to go to court, including lawyer fees and everything else,” said Tittel.

The appraisal process could be another long and costly hurdle for utility companies. The utility company must state exactly what areas of a farm will be affected by the condemnation, and seek new utility easements for those areas. Even more stringent, the appraisers must value the impacts of the project based as if the property was NOT preserved. That means the impacts must be paid based on the value of developed property. Importantly, unpreserved farms are not necessarily the most cost effective.

“One of the lies from the pipeline companies is that if you don’t let them on their land under eminent domain, you will get less money. However, SADC says the appraisal determination is at a higher value because they need to purchase the full development rights. That means it pays you to not let them on your property and force them to go to Court,” said Jeff Tittel. “Even if the development rights are severed, the value of the property is based on if the preserved farm were developed. This puts a monkey wrench into pipeline companies running destructive projects for preserved farms. N.J. has preserved over 150,000 acres of farmland. We have spent a total of $500 million on these properties. This is land paid for by the tax payers and held in the public trust. We are saving farmland to grow crops not pipelines.”

The SADC must approve the appraisal offered and or it has to be fixed in Court based on the fair market value of the easement. The utility company must first obtain the right to construct their projects through a court order to condemn farmland preserved property before the SADC can consent to the negotiated value. SADC can assist landowners, however they make it clear that they cannot provide legal advice to landowners nor represent them through the condemnation process.

“This will not only stop pipelines from going through preserved farms, it may stop pipeline projects all together. It will take these projects longer, slow down the process, and is an important decision in the arsenal to stop pipelines from cutting through our land. There are proposals to push all types of dirty fuel pipelines all over New Jersey. There at least 11 pipelines that have either been approved or proposed crisscrossing our state, changing us from the crossroads of the Revolution to the crossroads of pipelines,” said Jeff Tittel, Director of the New Jersey Sierra Club. “All the public outcry and the people who have said no to these projects is the reason SADC has made a strong commitment to preserve these lands. The advocacy and public opposition has helped SADC do its job. SADC to Pipeline Companies: ‘Can’t Touch This.’ ”

By |August 11th, 2015|Categories: Pipeline Construction|