Author

About Michael Faherty

Attorney Michael F. Faherty leads Faherty Law Firm in the advocacy of property rights in providing eminent domain law services to Pennsylvania property owners. He provides legal representation to property owners. He provides legal representation to property owners in conjunction with his service as the only Pennsylvania representative to the Owners’ Counsel of America. The Owners’ Counsel is the national association of leading eminent domain attorneys and property rights advocates.

Pipeline Risk Study

Quest Consultants of Norman, Oklahoma has released a study titled Quantitative Risk Analysis for the Mariner East Pipeline Project.

Findings include:

  • Risk of fatality falls to zero at a distance of about 2,100 feet from the ME2 or ME2X pipeline.
  • Along the route, the risk of fatality is about 10% as likely as being fatally involved in a motor vehicle accident and about 150 times as likely as being struck by lightning.

The study may be reviewed by clicking here.

By |December 13th, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Sunoco Pipeline Explosion

On 9/10/18 a natural gas pipeline west of Pittsburgh exploded. One home, approximately 500 feet from the 24 inch pipeline, was destroyed. The explosion and fire exemplify the risks to life and property.

Natural gas pipeline blast in Beaver County prompts evacuation

An Energy Transfer Partners pipeline exploded this morning, destroying one home, no injuries reported

Beaver County resident Chuck Belczyk, who lives across the street from where a natural gas pipeline exploded Monday morning, shot this video of the resulting fire.

A meteor, a plane crash, a helicopter. That’s how residents of a quiet street in western Pennsylvania described an explosion along a brand new natural gas pipeline in the woods behind their homes.

The fire shot up 150 feet in the air, damaged power lines, and sent neighbors scrambling out of their homes.

Authorities said the explosion occurred shortly before 5 a.m. near Ivy Lane in Center Township, Beaver County. It destroyed one home about 500 feet from where the blast occurred, prompted evacuations of others and closed an interstate. Officials said two garages, a barn and several vehicles were also destroyed by fires stemming from the explosion, but crews in the town 35 miles west of Pittsburgh said they were able to move several horses to safety.

One resident of Ivy Lane said the one destroyed home belonged to his neighbors, Sam and Joyce Rosati. Tom Demarco said the couple escaped with a young relative staying with them before the fire destroyed their home.

“They barely got out,” Demarco said. “The wind was pushing (the fire) towards (their) house. And, man it was ugly. It was darn ugly.”

Officials evacuated 25 homes, but let residents back in around 3 p.m. Monday.

Chuck Belczyk said his first thought was that a jet airplane had crashed, but then he heard a hissing sound.

“And that’s when it all hit us what was happening…you knew the pipeline went,” said Belczyk, whose home was one of the 25 evacuated.

“We looked out the window. It was like 12 noon. It was a ball of fire.”

Belczyk’s wife, Eve Lemire, described a scramble to gather what possessions the couple could take with them in the few minutes they had to evacuate. The couple tried to get their four cats inside pet carriers but couldn’t so they had to leave them in the home.

“I don’t sleep with my wedding rings on, so I went back and I took my rings,” Lemire said. “Then we left. We took nothing.”

Pipeline operator Energy Transfer Partners says the line was a 24-inch natural gas gathering line called the Revolution pipeline. Gathering lines typically transfer gas from wellheads to a larger transmission line.

The 100-mile long Revolution line was built to feed two major ETP pipelines, the Rover pipeline and the Mariner East 2 natural gas liquids line. (Sunoco, which is building the Mariner East 2 pipeline, merged with ETP in 2017). The company said the explosion was detected by its monitoring system. Valves were closed, and by 7 a.m., the fire had burned out, according to Alexis Daniel, a spokesperson for Energy Transfer Partners.

“There were no injuries and the area is secure,” Daniel wrote in an email. “All of the appropriate regulatory notifications have been made. An initial site assessment reveals evidence of a landslide in the vicinity of the pipeline.”

The Revolution line originates in northern Butler County, and began operating on Sept. 3. Both the Rover and the Mariner East 2 lines have been delayed by construction mishaps and environmental violations. The company completed construction on the Revolution line in February, but at the time officials said they were waiting for the completion of the Rover and Mariner East 2 to put it into operation.

Center Township police chief Barry Kramer said he will be asking questions about the safety of the line.

“We will be diligent on holding people’s feet to the fire,” Kramer said, referring to “the future of the line, the safety of the line, and why did this happen.”

Kramer said the explosion felled electric power lines. The Central Valley school district canceled classes. Interstate 376 was closed for several hours due to danger from falling power lines.

Pipeline critics have decried ETP/Sunoco’s track record in building and operating pipelines.

“It appears that ETP in Pennsylvania is following Sunoco’s history as one of the worst operators in the country for safety,” said Lynda Farrell, director of the Pipeline Safety Coalition.

Federal data shows Sunoco Pipeline itself has the industry’s second-highest number of incidents self-reported to federal inspectors over the last 12 years, and the fourth-largest number of federal enforcement actions.

Data from the Pipeline and Hazardous Materials Safety Administration shows Sunoco Pipeline reported 298 incidents from hazardous liquid, gas transmission and/or gas gathering pipelines nationwide from 2006 to 2018, year-to-date. That was the second-most among 2,152 operators in the agency’s database after Enterprise Crude Pipeline, a carrier of crude oil, which reported 306 incidents. Sunoco also had 175 federal inspections and 35 enforcement actions during the period.

In Pennsylvania, incidents include the leak of 20 barrels of natural gas liquids by the 1930s-era Mariner East 1 line at Morgantown, Berks County, on April 1, 2017, because of “external corrosion.”

A spokeswoman for the Pennsylvania Department of Environmental Protection said in an email that the agency tested the air near the explosion on Monday and found “no evidence of gas inside or outside homes.”

Written by: Susan Phillips and Reid Frazier StateImpact Pennsylvania

Photo caption: A sign marking the right of way for the Mariner East pipeline in Lebanon County.

Photo by: Marie Cusick/ StateImpact Pennsylvania

Jon Hurdle contributed to this report.

By |September 13th, 2018|Categories: In the News, Pipeline Construction, Property Rights|

Judges Halt Pipelines

Upon Judge direction, the Federal Energy Regulatory Commission (FERC) ordered stoppage of the construction of the Atlantic Coast Pipeline and the Mountain Valley Pipeline. The attached news story explains how environmental regulators are compelled by judges to provide mandated environmental protections.

What Happens When a Pipeline Runs Afoul of Government Rules? Authorities Change the Rules.

Federal authorities halted work on the massive Mountain Valley Pipeline this month after an appeals court ruled that federal agencies neglected to follow environmental protections.

Update, August 10, 9 p.m.: On Friday evening, the Federal Energy Regulatory Commission issued an order halting all work on the Atlantic Coast Pipeline. FERC cited an appeals court ruling that found the National Park Service and the U. S. Fish and Wildlife Service skirted environment rules when approving the $5.5 billion, 600-mile project.

A week ago, the federal government halted work on a massive pipeline project that runs from Northern West Virginia through Southern Virginia.

The government said it had no choice but to order work on the multibillion-dollar Mountain Valley Pipeline stopped after a federal appeals court ruled that two federal agencies had neglected to follow important environmental protections when they approved the project.

The court had found that the U.S. Forest Service had suddenly dropped — without any explanation — its longstanding concerns that soil erosion from the pipeline would harm rivers, streams and aquatic life. It also found that the Bureau of Land Management approved a new construction path through the Jefferson National Forest, ignoring rules that favor sticking to existing utility rights-of-way.

“American citizens understandably place their trust in the Forest Service to protect and preserve this country’s forests, and they deserve more than silent acquiescence to a pipeline company’s justification for upending large swaths of national forestlands,” Judge Stephanie Thacker wrote for a unanimous ruling from a three-judge panel of the 4th U.S. Circuit Court of Appeals. “Citizens also trust the Bureau of Land Management to prevent undue degradation to public lands by following the dictates” of federal law.

It turns out, those weren’t the only times state and federal regulators bent environmental standards for the project, which began construction in February.
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A review by the Charleston Gazette-Mail, in collaboration with ProPublica, shows that, over the past two years, federal and state agencies tasked with enforcing the nation’s environmental laws have moved repeatedly to clear roadblocks and expedite the pipeline, even changing the rules at times to ease the project’s approvals.

Projects like the Mountain Valley Pipeline, known as MVP, require a variety of approvals before being built. Developers and regulators must study various alternatives, describe a clear need for the project, and show that steps will be taken to minimize damage to the environment and reduce negative effects on valuable resources like public lands and the water supply.

But in numerous instances, officials greenlit the pipeline despite serious unanswered questions, records show.

For example:

— After citizen groups brought a lawsuit challenging how West Virginia regulators concluded that the pipeline would not violate state water quality standards, the state Department of Environmental Protection dropped its review and instead waived its authority to decide if the project complied with its rules. This effectively ended the legal challenge and paved the way for construction to begin.

— Confronted with a similar lawsuit filed by the same citizen groups, the state and the U.S. Army Corps of Engineers moved to rewrite their rules for how long pipeline construction could block the flow of rivers. Environmentalists fear that, under the plan approved by the Corps, four West Virginia rivers could be left dry for long periods of time, potentially harming aquatic life during construction.

— Developers persuaded judges to speed court proceedings and grant them access to private property along the route to cut down trees, saying they needed to do so before protected bats came out of hibernation. But then, despite guidelines saying no logging could take place after March 31, the Federal Energy Regulatory Commission twice extended the company’s deadline.

Regulatory agencies waiving standards and rewriting rules to pave the way for economic projects isn’t new. West Virginians have watched it happen for decades with the coal industry, as mine operators used variances to avoid strict land reclamation standards or fill streams with waste rock and dirt. That pattern is continuing with the natural gas boom.

“I’ve seen this kind of behavior from agencies before,” said Pat Parenteau, who teaches environmental law at the Vermont Law School. “They start out being strong, but they roll over, especially for these big energy projects that have this national interest, energy security push behind them.”

In its “stop work” order last week, FERC said, “there is no reason to believe” that the federal agencies involved would not “ultimately issue” new permits that would withstand the court’s scrutiny. But until then, FERC ordered that “construction activity along all portions of the project and in all work areas must cease immediately.”

A news release from Mountain Valley Pipeline echoed FERC’s statement that the pipeline permits would be easily reissued. Developers said they would work closely with the agencies involved to resolve the challenges to their work and “we look forward to continuing the safe construction of this important infrastructure project.”

When it is built, the Mountain Valley Pipeline will transport natural gas from Wetzel County, near West Virginia’s Northern Panhandle, to Pittsylvania County, Virginia, crossing about 200 miles in West Virginia and 100 miles in Virginia. It is one of several large transmission pipelines in the works across the Appalachians, part of the ongoing rush to market natural gas from the boom in drilling and production in the sprawling Marcellus Shale formation.

In another ruling that exposed flaws in the government’s pipeline review process, the 4th Circuit earlier this week threw out two permits for a pipeline even bigger than the MVP: The Atlantic Coast Pipeline, a $5.5 billion effort to transport gas more than 600 miles, from central West Virginia to the eastern portions of Virginia and North Carolina.

Chief Judge Roger Gregory wrote that the U.S. Fish and Wildlife Service approved the project without setting any real limits on damage to endangered species, and the National Park Service granted permission for pipeline developers to drill under the Blue Ridge Parkway without determining if doing so was consistent with the road’s protection as a unit of the Park Service.

Jeffrey Olson, a spokesman for the Park Service, said the agency is reviewing the ruling.

Because different permits for pipelines cover different parts and types of construction work, it’s not entirely clear how one court ruling that overturns one permit ultimately affects other parts of the construction. Eventually, such decisions are made by FERC, which is the lead agency for gas infrastructure projects.

So far, FERC has not decided if it will issue a broad stop-work order aimed at the Atlantic Coast Pipeline, also known as ACP. Project developers argue that it shouldn’t. They say the ruling affects only a small part of the route and that the “court’s concerns can be promptly addressed through additional review by the agencies without causing unnecessary delay to the project,” which is scheduled to go online in late 2019.

Aaron Ruby, a spokesman for the ACP and its lead developer, Dominion Energy, said the project has been under review for nearly four years by more than a dozen state and federal agencies.

“The courts have found some errors in the process, and they’ve given the agencies the opportunity to correct them,” Ruby said in an email this week.

Pipeline project opponents say the court rulings are evidence of something else entirely.

“This is an example of what happens when dangerous projects are pushed through based on politics, rather than science,” said Southern Environmental Law Center attorney D.J. Gerken, who represented citizen groups in the ACP case.

‘This Is What They’re Taking From Me’

On a spring morning earlier this year, Mark Jarrell got in his all-terrain vehicle and drove up the hill to the top of his Summers County property.

“This is what they’re taking from me,” Jarrell said, looking out onto the Greenbrier River and Keeney Mountain.

That day, Summers County was quiet. But Jarrell knew it wouldn’t last. About a month later, he heard machines whirring outside. He drove up the hill behind his house and found three machines clearing trees to make way for the Mountain Valley Pipeline — leaving behind a barren, 3,000-foot-long and 125-foot-wide swatch running down Jarrell’s property.

He’d dreaded that day for three years, “but when you see it for the first time, that’s the real punch in the gut.”

As West Virginia’s natural gas industry continues to grow, business boosters and state political leaders portray it as the key to a bright future filled with jobs, tax revenue and prosperity. Some residents in communities along the Mountain Valley Pipeline route see the project as part of that hopeful future.

“This is an infrastructure project putting money into the state,” said Bill Shiflet, an insurance agent in Union, West Virginia.

But others are wary that West Virginia has been too quick to embrace the natural gas rush and projects like the pipelines. They fear this movement is taking the state down the same path as the coal industry. And as construction proceeds this summer, some of their fears are starting to come true.

For Jarrell, the Mountain Valley Pipeline means a swath of brown, barren path snaking up the hillside. The pipeline itself will be buried, and the hillside along the pipeline’s 50-foot-wide operational right-of-way will be reclaimed with grass. But it won’t be the same.

“Now it’s real, it’s not talking about it and worrying about it and thinking about it, it’s happening,” Jarrell said. “And there’s not a damn thing you can do about it.”

Water Pollution

Jarrell and many of his neighbors have tried to stop the pipeline, and they have been joined in their quest by state and national environmental groups.

While FERC is generally the lead agency for interstate pipeline proposals, permits and approvals are needed from a variety of other agencies. Environmental groups opposed to the pipelines have challenged the projects at nearly every possible turn, raising issues about local environmental damage, questioning the need for the pipelines and warning of the global warming implications of increased use of another fossil fuel.

Among the many permits they’ve challenged is one called a “401 Certification,” issued under Section 401 of the federal Clean Water Act.

That section was intended to give states a bit of a check on federal authority. It was passed when federal agencies were pushing through large hydroelectric projects that included dams that often upset local officials.

If a state wanted to step in and block such a project, it could refuse certification. States also may attach additional conditions to their certifications. Or they can waive their authority altogether, if they want to.

West Virginia’s Department of Environmental Protection issued its 401 certification for Mountain Valley Pipeline in March 2017, issuing a news release that touted the project’s potential to “transport West Virginia’s abundant natural gas to meet the growing need for power generation” in the Mid-Atlantic and Southeast regions. The DEP directed reporters to the pipeline developer’s own website for information about the “potential economic benefit” of the project.

Local citizens and state environmental groups urged DEP Secretary Austin Caperton to reconsider the permit approval. Caperton refused, and he provided no explanation for his decision. The citizens sued in the 4th Circuit, the federal appeals court that covers West Virginia. (Under the Natural Gas Act, appeals of permits for pipelines bypass local federal district courts and go directly to appeals circuits.)

The lawsuit alleged that the DEP had not really done a required study to determine if the pipeline would harm state waterways. It also said the agency had not required pipeline developers to determine how streams along the route were being used, what the baseline water quality was prior to construction or if the pipeline would “significantly degrade” those waters.

A week before state lawyers were due to explain the DEP’s actions in legal pleadings, the agency said it needed to study whether the information used to issue the water quality certification was adequate or needed to be enhanced. Citizen groups went along with a DEP request that the court send the 401 certification back to the state agency and expressed hope the agency was going to do a better job this time.

Weeks went by, though, and the DEP said little about how this evaluation was being conducted or when it might be finished.

Then, on Nov. 1, Caperton went on statewide talk radio and announced that his agency would not do an additional review. Instead, he said, DEP officials were going to waive their legal authority to decide if the pipeline complied with West Virginia pollution limits.

Waivers are not the normal practice for the DEP, and West Virginia political leaders and regulators usually are staunch advocates of states, not the federal government, calling the shots on environmental matters.

Caperton said a separate state permitting process aimed at controlling stormwater runoff from the pipeline was sufficient and defended the decision to waive the certification authority. He said the DEP would “use all of our resources” to ensure the pipeline would be built safely.

“We feel very comfortable that this pipeline can be installed in an environmentally sound manner and that the environmental impacts ultimately will be zero,” Caperton said on the West Virginia MetroNews program, “Talkline.”

Months later, Caperton’s own inspectors have started identifying problems that belie Caperton’s statement.

Since April, state water quality inspectors have issued citations along the pipeline route in West Virginia: sediment-laden water leaving the construction site; missing or improperly installed runoff controls; failure to add more pollution protections when existing ones were shown to be inadequate. So far, the MVP has not paid any fines for those violations.

Jake Glance, a spokesman for the DEP, defended his agency’s handling of pipeline issues.

“To suggest that we are not performing our statutory duty, or ‘putting our thumb on the scale,’ is simply not true,” Glance said in an email this week. “We remain committed to our mission of protecting the health of West Virginians and our environment, enforcing the regulations passed by our legislature, and ensuring the permits we issue are being adhered to.”

But Angie Rosser, executive director of the West Virginia Rivers Coalition, said her group warned about the water quality violations that DEP inspectors are now finding.

“There are smart people working at [the] DEP who I believe knew these shortcuts would be a problem down the line,” Rosser said. “They knew these pipelines would be a problem for water quality. But my sense is those people aren’t making the decisions. There’s a culture in this state and within our agencies that this is just what we have to deal with as a state reliant on an extractive industry economy.”

Crossing the Rivers

As it winds from West Virginia’s Northern Panhandle to the Virginia-North Carolina border, the Mountain Valley Pipeline will cross four West Virginia rivers: the Elk, the Gauley, the Greenbrier and the Meadow.

For the pipeline to be constructed, each river needs to be dammed and excavated — sometimes with blasting — so that the 42-inch-diameter pipeline may be buried beneath the streambed.

For this work, the Mountain Valley Pipeline needs another type of permit, a Clean Water Act “dredge-and-fill” permit. If the construction is not handled correctly, sediment can increase in the water, oxygen can decrease and aquatic habitats can be harmed. And, of course, while each river is dammed, there is no stream for aquatic life there to live in.

Because of those effects, state officials, working with the Corps of Engineers, put a 72-hour time limit for completing these kinds of stream crossings in West Virginia. That time limit applies to all projects that seek approval under a streamlined Corps of Engineers review process, as Mountain Valley Pipeline did.

The problem is, Mountain Valley Pipeline says each of its stream crossings will take four to six weeks to complete. And despite the 72-hour time limit, the Corps approved the Mountain Valley Pipeline permit anyway, using the streamlined process that saved the developers time, money and scrutiny.

In May, the Sierra Club, the West Virginia Rivers Coalition and other groups sued again in federal court. On June 21, the 4th Circuit issued a stay of the Corps-approved permit until the appeals court could hold an oral argument this fall.

The court order prompted a late-night news release from Gov. Jim Justice.

“This project represents thousands of jobs and millions of dollars being spent to benefit this state, not to mention the long-term stability and boost the energy economy of this country will see as a result of this project’s completion,” the governor said.

Justice said he had talked with DEP officials and “they report that the builders of each segment of this pipeline work hard to protect the waters of this state, and they are doing a good job.”

“While there have been violations that have resulted from the WVDEP’s inspection of this pipeline, these violations have been corrected quickly,” Justice said.

The governor said his administration would “continue to monitor these proceedings closely to determine what role the state may play expediting the construction of this pipeline.”

In early July, the Corps of Engineers rewrote its approval of the pipeline to essentially waive the 72-hour time limit on the river crossing construction. In a court filing, Corps lawyers defended the move, saying the alternative of digging a trench for the pipeline without diverting water flow would cause more environmental damage.

And just this Wednesday, the DEP released a proposal to exempt the stream-crossing method Mountain Valley Pipeline proposed from the 72-hour limit.

Environmental groups said the agencies could instead push MVP to use a more conventional method to bore under the rivers, perhaps reducing the effects.

All sides are now waiting for the court to decide if the new Corps approval, revised to meet MVP’s needs, is enough to lift the stay of the Clean Water Act permit.

Extending Time to Cut Trees

When MVP developers told three federal judges in early 2018 that they needed access to private property to build the pipeline, their lawyers argued that they needed it quickly.

They were up against a strict March 31 deadline — the day federally protected, threatened or endangered bats come out of hibernation in certain areas along the pipeline route, and roost in the trees.

If developers didn’t start cutting down trees quickly, they’d miss that deadline, and they’d have to wait to clear trees until November, MVP developers said in court.

That would have pushed the project’s finish date past the end of 2018, its goal, costing the company hundreds of millions in lost revenue and termination clauses, the project’s senior vice president of engineering and construction testified in court hearings when the pipeline developers sued landowners to secure easements through eminent domain. The landowners were not willing to sell on their own, forcing developers to go to court.

The landowners urged MVP to slow down, but within weeks of each hearing, judges granted possession of the land, allowing developers to start clearing trees. Two of three judges mentioned the bats in their decisions to allow construction on private property.

But March 31 came and went, and MVP hadn’t cut down all the trees it needed along the route. So lawyers asked FERC to extend that March 31 deadline by two months, to allow them to cut down trees on a small portion of the Jefferson National Forest. Tree-sitting protesters had delayed the company’s logging, MVP lawyers told FERC, and the small area of the national forest they wanted to work in was not believed to be home to any of the threatened or endangered bats.

The U.S. Fish and Wildlife Service, whose job is to protect threatened or endangered species, signed off on an extension for MVP to cut trees in the national forest, so long as it was finished by May 31.

“If there is a desire to extend tree clearing past May 31, that answer would change,” Troy Andersen, a supervisory Fish & Wildlife biologist, wrote in an email to the Forest Service, which MVP later filed with FERC.

FERC granted that extension.

In June, MVP asked FERC for another extension, complaining that “obstructionists continued to prohibit Mountain Valley from felling the trees” by the deadline, and asking to keep working through July 31. FERC approved the request. The 4th circuit decision on July 27 put a halt to construction in the Jefferson National Forest, four days before the deadline. At that point, trees had mostly been cut down but hadn’t been cleared from the road. According to the most recent construction status report filed with FERC on July 26, tree-cutting was still in progress, but not entirely finished. As of Friday morning, MVP hadn’t asked for an extension.

“This may seem to be just a minor adjustment allowing them to tree cut until the end of July,” said Bill Price, field organizing manager for the Sierra Club, “but the impact of that to the habitat in the area, I don’t know anyone knows for sure.”

The federal agency also has approved other requests by the MVP developers that residents along the route say affect their quality of life in more straightforward ways.

In recent weeks, residents fought a request for FERC to extend the construction day until as late as 9 p.m. Letters poured in from residents, organizations and county governments, urging FERC to turn it down. Extending construction would create more noise and more workers on the road while commuters try to get to and from work, they said. Longer hours would mean tired, and careless, workers. And, residents said, it was just another example of developers rewriting the rules to make things more convenient for them.

It’s enough that crews have to work during the day, said David Werner, who lives on the pipeline’s route in neighboring Virginia. He was one of the dozens who wrote to FERC, urging the commission to reject the proposal. If construction continues until dark, it disrupts his ability to play ball with his four grandkids or keeps him from sitting on his porch and enjoying the quiet.

FERC approved the request over the residents’ objections.

“They’re already working weekends,” Werner said in an interview. “Now they want to expand well beyond that. They’re violating what they said they were going to do.”

On Wednesday, Jarrell was back on his all-terrain vehicle, weaving through the construction area, which has been mostly abandoned since FERC’s stop-work order. Other than a few workers stabilizing the construction sites — per FERC’s order — Summers County was quiet again.

Jarrell doesn’t think it’ll last.

“They just don’t care, because there’s so much money at stake,” he said. “It’ll get built, no matter what.”

Written by: Kate Mishkin and Ken Ward Jr., The Charleston Gazette-Mail, and Beena Raghavendran, ProPublica
This article was produced in partnership with the Charleston Gazette-Mail, which is a member of the ProPublica Local Reporting Network.

By |September 6th, 2018|Categories: Condemnation, In the News, Pipeline Construction, Property Rights|

FERC Approval of Pipelines

The Wall Street Journal published an opinion which criticized the Federal Energy Regulatory Commission process by which property owners are denied the due process right of judicial review of eminent domain actions.

Pipeline Builders Abuse Eminent Domain

How FERC denies landowners the right to meaningful appeal.

Across the country activists are speaking out against the use of eminent domain to construct natural-gas pipelines. Some have climbed trees and refused to come down. The agency in charge of approving these pipelines—the Federal Energy Regulatory Commission, or FERC—is reconsidering how eminent domain, by which the government legally expropriates private property for public purposes, is used.

While we stand with those who stand for individual rights—and enjoy a good tree-climb—protests like these can only go so far. The U.S. is a country of laws, and if a court rules that eminent domain can be used to construct a pipeline, then Americans must respect that ruling. But judges haven’t actually issued many such rulings. Right now FERC presides over a system that strips property owners of their rights without courts getting involved.

When FERC approves the use of eminent domain to build a pipeline, landowners have the right to appeal to a federal court only after they have asked the agency to reconsider its decision and had their request denied. But FERC has developed the habit of granting these requests so that it can draw out the time it spends “thinking” about them. While FERC dawdles, the pipeline companies use eminent domain to snatch thousands of landowners’ properties free from judicial review.

Furthermore, FERC’s approval comes with eminent domain authority, allowing pipeline companies to seize property before seeking other necessary approvals. In one instance, a company seized part of a Pennsylvania family’s property to build a FERC-authorized pipeline only to have the project fall apart when officials in New York refused to grant a permit to build another part of the pipeline. The taking, which also involved cutting down more than 500 of the family’s trees, was ultimately for nothing.

As rotten as these procedural shenanigans are, FERC is guilty of a more consequential deception. Under current law, the agency can approve a pipeline without telling property owners that decisions will be effectively unreviewable unless they file an immediate appeal. When states have behaved this way, federal courts have deemed it unconstitutional. Yet FERC continues to harm eminent-domain victims by failing to inform them how to protect their rights.

No one’s property should be taken without a real chance at judicial review. Property owners who go to court don’t always win, but some do. Property owners in both Pennsylvania and Texas have persuaded state judges to reject pipeline-related property seizures in recent years. Perhaps property owners who’ve been subject to eminent domain expropriations by FERC-approved pipelines would find similar success. The agency should afford them the chance to find out.

Written by: Robert McNamara and David Bookbinder

Mr. McNamara is a senior attorney with the Institute for Justice. Mr. Bookbinder is chief counsel for the Niskanen Center.

By |August 14th, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Hearsay Evidence

A recent Commonwealth Court decision reaffirmed the opportunity for a property valuation witness to rely upon hearsay evidence in forming an opinion of property value. In re Condemnation by Turnpike Commission, No. 1131 C.D. 2017 (April 10,2018) a property owner appraiser relied upon an affidavit of a neighbor about the property owners ability to obtain a driveway easement. The affadavit was relied upon in support of a highest or best use for hotel development. The decision cited 26 Pa. C.S.A 703 and the Eminent Domain Code provision which allows an expert to rely on “facts or data” which the expert did not personally observe. Use of this particular rule for eminent domain evidence can be very beneficial in production of evidence of full just compensation.

By |June 6th, 2018|Categories: Uncategorized|

Penn East Pipeline

The Penn East pipeline across northern Pennsylvania and northern New Jersey continues with FERC approval and multiple eminent domain challenges. Recently another challenge was added via a New Jersey request that FERC reconsider the pipeline impact. Although unlikely, the effort could derail the pipeline in both states.

New Jersey asks appeals court to review FERC’s approval of PennEast pipeline

FERC erred in awarding Public Convenience and Necessity certificate, AG says

One of the first acts of Gurbir Grewal when he became New Jersey’s attorney general was to ask the Federal Energy Regulatory Commission to rehear its decision to certify a crucial aspect of the controversial PennEast pipeline; the proposed pipeline would carry natural gas from Pennsylvania to Mercer County. Monday, Grewal filed a petition with a federal appeals court that challenges FERC on that certification.

Grewal filed a petition yesterday with the District of Columbia Circuit Court, asking it to hear the state’s arguments that the Federal Energy Regulatory Commission (FERC) erred when it issued a Certificate of Public Convenience and Necessity to the pipeline project in January.

In February, Grewal asked FERC to stay the certificate and rehear the case, in a motion that was seen as a precursor to the legal challenge that it has now made.

FERC responded to the rehearing request with a “tolling order,” a mechanism that in theory gives it more time to consider the request but which in practice means that the agency takes no action for about six months and then summarily dismisses the request, critics say.

Other groups seeking a rehearing include three New Jersey municipalities, three New Jersey state lawmakers, a Pennsylvania township, and activist groups in both states. If constructed, the $1 billion pipeline would carry natural gas about 120 miles from Luzerne County, Pa. to Mercer County, NJ.

NJ says FERC doesn’t have authority

In the latest motion, New Jersey argued that FERC does not have the authority to issue a tolling order when a rehearing request is combined with any other request such as a stay.

The state argues that FERC was wrong to give PennEast the certificate that has allowed it to file eminent domain suits against some 150 New Jersey landowners who have refused its offers of compensation for building the pipeline on their land.

The state has also declined the company’s offers of compensation for easements on several parcels of state-protected land in Hunterdon County, totaling about 1,300 acres.

Since many landowners have denied the company access to their land to survey for the pipeline, the company lacks knowledge about environmental impacts on about two-thirds of the route, the state said in its motion to FERC in February. Even so, FERC’s certificate allows condemnation — the process by which land is taken via eminent domain — for all the route, the motion said.

“Enabling PennEast to condemn perpetual easements before knowing whether the route must be shifted to avoid environmental impacts undoes the preserved nature of the land even if the pipeline will ultimately never cross that land due to route changes,” the state said in February.

‘Arbitrary and capricious’

In the new petition, the state calls FERC’s certificate “arbitrary and capricious” because it lacked environmental information, improperly relied on PennEast’s contracts with its affiliates to demonstrate public need for the line and tried to minimize or avoid environmental impacts rather than mitigating them, as required under federal law.

The motion is a rare or perhaps unprecedented example of a state challenging FERC on its certificate of approval in a pipeline case, said Jennifer Danis, an attorney who represents the New Jersey Conservation Foundation, a leading opponent of the pipeline. “I don’t know of another state that has taken a broad legal challenge at a FERC certificate in a pipeline case,” Danis said.

FERC is likely to respond by asking the court to dismiss the petition, and the real question is whether the court agrees to hear the case on the merits, Danis said.

Tom Gilbert, campaign director for the NJCF, said the motion challenges FERC’s “flawed” process and its findings. “PennEast never should have been approved in the first place,” he said in a statement.

FERC spokewoman Tamara Young-Allen said the agency can’t comment on matters that are subject to a final commission order.

PennEast spokeswoman Pat Kornick said FERC’s approval of the project is consistent with the agency’s longstanding policies and that the company is confident that the courts will uphold the review process. The company says it expects to begin construction this year and for the pipeline to start operating in 2019.

In a separate case, a federal judge in Trenton is expected to rule shortly on whether PennEast can use eminent domain to take land from about 130 landowners along the New Jersey portion of the pipeline route.

FERC’s approval of PennEast was a blow to opponents but the project still needs permits from a number of agencies including the New Jersey Department of Environmental Protection and the Delaware River Basin Commission.

Written by: John Hurdle | StateImpact Pennsylvania

Photo caption: Part of the proposed PennEast pipeline could run through this stretch of land in Bucks County, Pa. New Jersey has taken a stronger position toward the pipeline. The Attorney General’s office has filed a federal appeals case to try to halt construction while Pennsylvania has approved water crossing permits.

By |May 31st, 2018|Categories: Uncategorized|

Clean Air Council v Sunoco Pipeline

An April 30, 2018  decision of the Pennsylvania Commonwealth Court rejected six of seven claims against Sunoco re environmental harms and eminent domain overreach. One claim, based on the Environmental Rights Amendment, was directed to further consideration by the Commonwealth Court.

Read the Pennsylvania Commonwealth Court decision here.

By |May 31st, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Boy Scout Award

Mike Faherty was provided the “Ideal Scout” award by the Lancaster Council of Boy Scouts. Mike an Eagle Scout and former Boy Scout employee, provided pro bono services to the Scouts when a scout camp was threatened by eminent domain. Mike was able to decrease the land acquired and increase compensation.

By |May 29th, 2018|Categories: Condemnation, In the News, Property Rights|

$5,000,000 Increase From Turnpike

The Pennsylvania Turnpike Commission condemned 70.9 acres through a 240 acre sportsman’s club. The Turnpike paid $1,750,000 for property damages and no funds for relocation damages. Faherty Law Firm provided representation and obtained a settelement  for an additional $5,000,000 in total damages.

Turnpike buys gun club land near near McDonald for $5 million

The Pennsylvania Turnpike Commission has acquired a key piece of property to allow the construction of an interchange on the Southern Beltway — and protect the safety of motorists.

But it came at a hefty price: $5 million.

That’s the amount the commission agreed to pay last week to buy 70.9 acres of land from the McDonald Sportsmen’s Association, leaving the association 168.4 acres of property off of Cooks Road between McDonald and Midway, Washington County.

The commission needs the land to build interchange 11 on the $800 million, 13-mile toll road that will link Route 22 to Interstate 79 on the Allegheny-Washington County border. That interchange will be on the northeast corner of land formerly owned by the association and will include construction of access roads from Route 980 to the north and Noblestown Road to the south.

Jeanmarie McLaughlin, the commission’s assistant counsel, said the property was among the last and most expensive pieces of land the commission has had to acquire for the project. Several factors besides the amount of property were at play in the cost, she said, among them activities the association conducts on that part of the property and the need to protect motorists who will use the new highway from activities on the shooting ranges at the association.

“The settlement amount includes more than the price of the land,” Ms. McLaughlin said. “In order for us to get them back to whole, we needed to pay for the activities they lost as a result of taking the land.”

Ms. McLaughlin said it was “a challenge” to reach an agreement that provided the land the turnpike needed, allowed the association to continue its programs and protect motorists.

“We’re not taking any of their buildings, but we are impacting their ranges,” she said. “They were very involved from the beginning to make sure they could continue their activities. That was especially important that them continuing their activities would continue to be safe for everybody.”

The association offers a variety of shooting ranges and training programs, including nighttime skeet shooting, but it isn’t clear which activities occur on the land acquired by the turnpike commission. Association President Bernie Dhans referred questions about the sale and changes the club will have to make to Harrisburg attorney Mike Faherty, who declined comment.

With this purchase, the commission has purchased just over 300 properties for the Southern Beltway at a cost of about $68 million.

Parts of the highway are under construction but none of it will open until all of it is complete in early 2021.

Written by: Ed Blazina | Pittsburgh Post-Gazette

By |May 10th, 2018|Categories: Condemnation, In the News, Transportation|

Deferring Taxes On Eminent Domain Payments

DEFERRING TAXES ON §1033 EXCHANGES

Eminent domain lawyers work hard to secure just compensation for property owners. However, in gain situations, the IRS and most states want their share, too. Fortunately, solutions are available that seek to soften or eliminate the tax bite. When property is involuntarily converted, I.R.C. §1033 provides guidelines to defer capital gains and other taxes. Known as a “1033 exchange”, the code allows for non-recognition status if the proceeds are invested in similar property within 2 years after the close of the first taxable year in which any part of the gain is realized. Similar generally means property that is “similar or related in service or use” to the property so converted, terms that the IRS narrowly defines. Note that this period is extended to 3 years for condemnations of investment property, and more liberal “like-kind” rules apply to replacement property. The longer exchange period provides ample opportunity for tax planning. If properly structured, property owners can complete a valid 1033 exchange, yet still “cash out” a significant portion of their award proceeds tax free. Passive, turn-key options may be available to qualified landowners unable to find suitable replacement property. Lastly, taxes that have been already paid can potentially be refunded via an amended tax return. To learn more about these powerful tax codes, see https://www.1031dst.co m/investments/1033-exchanges/ or conference with Catharine Fulmer at (631) 474-1610 Ext. 210. Catharine can also be reached at catharine@fortitudeinvestments.com

By Alan N. Lichtenstein
Senior Investment Advisor
Fortitude Investment Group

The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Consult an advisor as investor situations and objectives vary. This information is not intended to indicate suitability for any particular investor, nor to be interpreted as tax or legal advice.
Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA). Fortitude Investment Group is independent of CIS, CAM and CIA.
By |April 15th, 2018|Categories: Eminent domain, Property Rights|