Monthly Archives: April 2016

Federal Regulations Undermine Sunoco Eminent Domain Argument

The Sunoco Pipeline litigation to obtain Pennsylvania eminent domain power has consistently resulted in Sunoco arguing that Mariner East 2 is interstate and intrastate. However, the federal regulations concerning such hazardous liquids pipelines state that a pipeline is interstate or intrastate, but not both. Application of the federal regulations strongly appear to define the proposed pipeline as interstate only, so that eminent domain power would be denied per exclusive federal jurisdiction (49 CFR Part 195 – Appendix A) and the definitions of Interstate pipeline and Intrastate pipeline (49 CFR 195.2).

By |April 22nd, 2016|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Pipeline Companies Are Not Too Big To Fight

Pennsylvania property owners possess constitutional rights which protect private property. Faherty Law Firm represents property owners across the State in protection of property rights threatened by eminent domain. Sunoco Pipeline efforts to obtain eminent domain power for Mariner East 2 were defeated via Mike Faherty’s representation in Sunoco v. Loper. Sunoco then proposed onloading and offloading locations in Pennsylvania. However, a federal regulation, 49 C.F.R. Part 195 – Appendix A, states that the jurisdiction is exclusive federal jurisdiction. Judges, particularly appellate judges, may decide that exclusive federal jurisdiction prevents Sunoco from obtaining eminent domain power. Mike Faherty argued that issue on March 9, 2016 before the Commonwealth Court. A decision on this expedited appeal is expected in May or June.

Landowners lose before judge rules

Witten by: Candy Woodall and Colin Deppen |  Patriot-News

The woods that gave Pennsylvania its name have become battlegrounds in pipeline wars. These are passionately fought legal cases that pit rural landowners against huge corporations tasked with revolutionizing America’s energy future and maximizing profits amid an industry downturn.

While the fracking boom changed the country’s dependence on foreign oil, it’s the pipeline development that is reversing the U.S. from an energy importer to exporter. That’s a plan supported by the president and his federal agencies, including the commission that regulates pipeline development in Pennsylvania.

The Federal Energy Regulatory Commission has received much scrutiny in the last year from landowners and environmentalists who say the agency favors industry, while private land is gobbled up for public use with little oversight. “The big gorilla in the way is FERC,” said Alex Bomstein, senior attorney for Clean Air Council in Philadelphia.

It’s difficult to put a legal block in front of a pipeline before construction starts because the federal regulatory process overrides a lot of other decisions, attorneys say. Simply put, a pipeline builder can cut down thousands of trees across Pennsylvania long before a county judge says it’s allowed.

It’s a complicated legal system that seems to apply only to this industry. In many others, construction would have to cease while a legal challenge crawled through the court system.

But in Pennsylvania pipeline fights, landowners lose before a judge issues a ruling.

‘We’re out of options’ Last week, Ellen Gerhart and her family lost hundreds of trees on the 28-acre Huntingdon County property they purchased in 1982 and soon enrolled in the Pennsylvania Forest Stewardship Program.

The silent promise they made to never develop or profit from the land was superseded by a pipeline project the minute the Pennsylvania Public Utility Commission classified the Mariner East 2 as a public utility.

But this pipeline is not like the natural gas lines that deliver winter heat to numerous homes across the state. It’s a behemoth that stretches hundreds of miles from the shale fields of Ohio, West Virginia and southwestern Pennsylvania to a Sunoco Logistics hub in Marcus Hook, Delaware County. Once it reaches that export terminal, it can ship overseas the 450,000 barrels a day of propane and butane moving through the lower half of the state.

Those exports are why nearly all landowners and plaintiffs’ attorneys say these pipelines don’t deserve eminent-domain status. That right is usually reserved for a project with a clear plan to serve the public good, such as highways and schools.

Industry lawyers argue that whatever benefits companies is also considered a public benefit, but that rationale doesn’t fly with the Gerharts. Ellen Gerhart’s daughter Elise, who is determined to save at least one tree on her parents’ property, spent several days in a tree stand while chainsaws topple a 3-acre grove around her. But the Gerharts have landed among the hundreds of Pennsylvania residents who say these pipelines are too big to fight.

In their battle to prevent commercial use of their private property, the Gerharts have contacted nearly every regulatory agency, wrote to the governor and pleaded with the company to spare their land. They’re on their second lawyer.

Sunoco is still waiting on environmental permits from state regulators and construction is delayed until this summer, but the company has already cleared most of the trees the Gerhart property and 170 other tracts in Pennsylvania. The fallen trees can’t be removed until the company has a permit that allows it to bring heavy machinery onto the property. Ellen Gerhart aims some of her ire at the state Department of Environmental Protection, which has not stopped the tree cutting.

But the DEP can’t intervene because it doesn’t have authority to prohibit work that doesn’t disturb wetlands or waterways. However, state regulators recommend that companies refrain from cutting down trees or any construction until all required permits and authorizations are approved, DEP spokesman Neil Shader said. But that recommendation is not a law, and there is no DEP permit required to cut down trees.

A harder fight

Mike Faherty, a Derry Twp. attorney, is working on 100 eminent-domain cases throughout the state, a sign of the high number of pipeline struggles and the low number of local lawyers with experience in these property fights.

While he’s often the sole attorney representing numerous landowners in county courtrooms, he faces off against seven or eight corporate attorneys in each case.

Oklahoma-based Williams Partners, which is building the Constitution Pipeline from northern Susquehanna County through New York and New England states, hires outside counsel because regulations vary in each state, a spokesman said.

Sunoco doesn’t comment on legal representation, company spokesman Jeff Shields said.

Faherty has reached agreement on seven of his 100 cases, generally getting his clients much greater compensation than what was originally offered for an easement. Sunoco recently asked Commonwealth Court to review the cases on an expedited schedule, and Faherty didn’t oppose the motion. A decision is expected in 60 days.

Root of the issue

At the crux of the issue is the nearly ubiquitous use of eminent domain in securing routes for pipeline projects as they wind their way toward what is, in essence, a superhighway system feeding fossil fuels to markets in the U.S. and around the globe.

It’s a situation that has many Pennsylvania landowners citing the Fifth Amendment: “No person shall be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.”

Pipeline builders say they’re serving the public good because they’re moving energy to consumer markets, a position backed up by state and federal approvals. But the landowners, who often support oil and gas development while opposing the use of eminent domain, say if a pipeline ships fuel outside the U.S., it’s serving company profits and not the public interest.

“How does propane shipped overseas benefit the public in Pennsylvania?” Faherty said.

A Sunoco executive answered that question when he testified in a Cumberland County case last month. Aaron Alexander, the company’s vice president of business development, said the public benefit can also include shipping companies.

How to define the public good is being considered by the state Supreme Court. “The whole industry is a public benefit to the Pennsylvania consumer,” Justice Max Baer said last month.

During the same March 9 session, Justice Christine Donohoe said, “What is public? Pennsylvania or citizens of the world?” Attorney Matthew Haverstick, who represents the Pennsylvania Public Utility Commission, told her a broad definition of public is appropriate.

Chief Justice Thomas Saylor said it’s a problem if the result benefits private companies and not the public.

But with prices so low and domestic consumption declining, the case in favor of pipelines as a public benefit is getting harder to prove, said Dennis Whitmer, an energy analyst and Lancaster County native. Industry hopes were pinned on a growing global market, a projection that now seems unrealistic, he said.

“Everyone expected India and China to start importing more natural gas, but the growth rate of LNG [liquid natural gas] consumption in China is not going up because their economy is in trouble,” Whitmer said. “It now looks like the world market for LNG is glutted and probably will be for a long time to come.”

‘Already too late’

In Lancaster and Lebanon counties, landowners continue to oppose Williams’ planned Atlantic Sunrise pipeline project, fearing its impact on property values and their quality of life.

The pipeline will divide Lebanon County, north to south, for 27 miles.

About 35 landowners have refused to sign easements, while 60 to 70 have.

“Most people signed because they wanted the money, but a lot felt they had no option,” said Ann Pinca, a member of the Lebanon Pipeline Awareness group, a nonprofit that formed two years ago in response to the Atlantic Sunrise pipeline.

“A lot of what we hear is that there’s nothing you can do. It’s coming through anyway,” she said.

Landowners who oppose the pipelines face two major hurdles: money and public perception.

Litigation is expensive and mostly funded by individuals and volunteers, Pinca said.

There’s also an assumption in the conservative Republican county that what the oil and gas industry says is true and what community organizers say is not, she said.

Pinca pointed to grants awarded to local fire departments and entities by gas and pipeline companies as a possible reason, calling it “PR disguised as philanthropy.” The industry also has influenced local politicians, according to Lancaster County landowners who oppose pipelines.

More than $7 million has flowed from the oil and gas industry to campaign coffers during the last five years, according to state records.

Some 40 Lancaster residents continue to resist the Atlantic Sunrise project, with a higher holdout rate in the southern tier of the county. Even if landowners can afford to fight the pipeline in court, they grapple with the reality of the cart-before-the horse regulations that allow pipeline builders to clear land before a judge decides if their eminent domain status is upheld.

“It’s very possible that we win this case down the road, but it’s already too late,” said Mark Clatterbuck, a member of Lancaster Against Pipelines. “The pipeline is already in, and they’re not going to pull the pipeline back up.”

By |April 13th, 2016|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|