Eminent domain

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|

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|

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|

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|

Transource and Public Need

Pennsylvania law allows public utility corporations to use eminent domain power when the proposed use is “for the public”. If the proposed use is for the corporation and the public, Pennsylvania law looks to who is the primary and paramount beneficiary. If it is the corporation, Pennsylvania law precludes eminent domain power.

Transource sues landowners for access to properties where power lines are proposed

Transource Energy has sued 24 landowners, asking a Franklin County, Pa., judge to allow the public utility’s representatives to access properties to perform studies, tests and surveys as it proceeds with plans for 29 miles of overhead electric-transmission lines.

The company, through a subsidiary, requested in court documents immediate right of entry onto defendants’ properties. It claims landowners are prohibiting access despite “numerous contacts” since October.

“As a Pennsylvania public utility, Transource Pennsylvania has the power of eminent domain pursuant to the Pennsylvania Business Corporation Law of 1988,” lawyers said in filings.

Transource Pennsylvania made its filings a week ago at the Franklin County Court of Common Pleas. As of Tuesday morning, the matter had not been scheduled for a hearing or assigned a judge.

Transource Energy is seeking to spend about $320 million to connect two existing 500-kilovolt transmission lines in Pennsylvania with stations in Maryland, and provide two additional pathways for electricity.

The company’s lawyers said surveying must be done between April 15 and June 15 due to state and federal requirements associated with habitat monitoring for bog turtles. The reptiles are considered federally threatened and are an endangered species in Pennsylvania.

“Without the information from the field surveys, the (transmission-line) project’s design cannot be finalized and the project will be delayed, therefore, the (transmission-line) project requirements will not be met,” Transource lawyers said in court documents.

Written by: Jennifer Fitch | heraldmailmedia.com

By |March 15th, 2018|Categories: Condemnation, Electric Transmission, Eminent domain, Property Rights|

Mariner East 1 Shut Down

The Pennsylvania Public Utility Corporation, Bureau of Investigation and Enforcement, issued a report requesting an emergency order to stop the use of Mariner East 1 for transportation of explosive natural gas ligquids. The well grounded safety concerns compelled the PUC Chairman to stop the transportation of the hazardous liquids. Inspections and monitoring will follow.

PUC shuts down Mariner East 1 pipeline, citing public safety concerns raised by sinkholes

Pennsylvania’s Public Utility Commission on Wednesday ordered a temporary shutdown of the Mariner East 1 natural gas liquids pipeline, saying it could have a “catastrophic” effect on public safety if it leaks.

PUC Chairman Gladys Brown approved a request by the commission’s Bureau of Investigation and Enforcement for an emergency order that would halt operation of the line until inspectors are satisfied that it meets safety standards.

The panel, in a petition issued earlier Wednesday, argued that the pipeline had been exposed by the appearance of sinkholes near the construction of two other pipelines – Mariner East 2 and 2X – at several places in Chester County’s West Whiteland Township in recent days.

The panel said that the construction of the two new pipelines and the sinkholes that resulted from drilling for the pipelines – all of it near ME1 – “compromise the safety of the public.”

In a four-page order, Brown agreed with the panel, saying that risks to the public outweigh risks to the shippers of natural gas liquids.

“I agree with BIE that permitting the continued flow of hazardous liquids through the ME1 pipeline without the proper steps to ensure the integrity of the pipeline could have catastrophic results impacting the public,” Brown wrote.

She ordered Sunoco to run an inspection tool through Mariner East 1 for one mile on either side of the location where the sink holes were found, within 24 hours of the order being issued. Within 12 hours of completing the inspection, Sunoco will then shut down the line for an estimated 10-14 days, during which it will study geological conditions and submit its findings for approval by PUC inspectors.

Sunoco will not be allowed to resume operation of the pipeline until it meets all safety requirements set down by PUC inspectors, the order said.

Sunoco spokesman Jeff Shields, in a statement issued late Wednesday, said the company will comply with the PUC’s order over the next 10-14 days but insisted that Mariner East 1 is safe.

“This period should allow us to share what our professional geologist has established to date — that the Mariner East 1 pipeline is stable, is located in suitably safe geology, and will continue to operate safely as it has done for decades. The safe operation of our pipelines is of critical importance to us, and we believe the study period will reaffirm the safety of the pipeline,” he said.

Shields said the order does not affect construction for the Mariner East 2 pipelines, which continues throughout the state.

The order is a victory for anti-pipeline campaigners who have argued that natural gas liquids represent a threat to public safety, especially in densely populated areas like the suburbs of Philadelphia.

Mariner East 1, which was built in the 1930s, has been repurposed to carry ethane, propane and butane from the Marcellus Shale of southwest Pennsylvania to a terminal at Marcus Hook near Philadelphia, where most of it will be exported.

The existing pipeline runs parallel to the two new lines. The first, ME2, is scheduled for completion by the end of the second quarter.

Potential ‘catastrophic’ consequences

In its petition, the panel said it is concerned about how close homes and an Amtrak line are to the existing pipeline, and to the construction of the new lines, after the sinkholes appeared.

In language similar to that frequently used by community groups opposing the Mariner East project, especially in Philadelphia’s western suburbs, the PUC panel said public safety would be “jeopardized” without the proposed review of pipeline integrity.

“The pipeline in question transports hazardous liquids in densely populated areas defined by PHMSA [the federal Pipeline and Hazardous Materials Safety Administration] as High Consequence Areas,” the petition said. “Any compromise or failure of the pipeline would have dire results, and the injuries resulting therefrom would most certainly be irreparable.”

PHMSA spokesman Darius Kirkwood said the agency is investigating the sinkholes and looking into whether Sunoco complied with pipeline construction safety rules.

The first sinkhole, measuring about eight feet wide by three feet deep, was discovered in December last year just south of railroad tracks used by Amtrak, the document said. A second hole, about 15 feet deep, was discovered on March 1 about 300 feet from the rail line, and a third, about 15 feet wide and 20 feet deep, was found on a private property at Lisa Drive in West Whiteland on March 3, the document said.

The third sinkhole was about 10 feet from a foundation wall of a house on that property, and partially exposed the ME1 pipeline, the petition said.

It said that Sunoco did not notify PUC or PHMSA about the sinkholes, and that the company’s own Compliance Group was unaware of the events until March 3.

All three sinkholes were filled with a concrete mix on March 3, and construction stopped when PUC inspectors visited the site on March 5. The inspectors found more sinkholes developing that were in the path of both ME1 and ME2X.

Beth Toll, a spokeswoman for Amtrak, said inspectors had found no changes to track structures at the West Whiteland location during or since the construction of that part of the pipeline.

‘Can’t afford to wait’

Before PUC’s decision to temporarily shut down Mariner East 1, State Sen. Andy Dinniman, a Chester County Democrat who has argued that the local limestone geology does not support Sunoco’s drilling technique, urged the PUC to issue the emergency order.

“We can’t afford to wait on this,” Dinniman said in a statement. “The number of sinkholes appears to be growing and the heavy snowfall only seems to be exacerbating the problem.”

Clean Air Council, an environmental group that has led legal challenges to the Mariner project, also urged the PUC to shut down ME1 because of its proximity to “this densely-populated neighborhood with busy Amtrak railroad lines and unstable geology,” said executive director Joe Minott, in a statement.

Sunoco restarted construction on the 350-mile cross-state lines in February after a month-long shutdown ordered by the Department of Environmental Protection in response to multiple violations.

This story has been updated with comment from Sunoco.

Written by: Jon Hurdle | StateImpact Pennsylvania

Photo credit: Eric Friedman
Photo caption: | Crews work to stabilize sinkholes in a West Whiteland Township neighborhood on March 3. The sinkholes appeared recently near a construction site for the Mariner East 2 pipeline.

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

PennEast and Eminent Domain

Eminent domain power is available only for a public use with the need for certain property rights. Public use and the need are two issues raised in a county suit to protect property rights.

Northampton County challenging PennEast on eminent domain

Northampton County wants a jury to decide whether publicly protected open space should be disturbed by the proposed PennEast Pipeline.

The county is one of dozens of landowners in Northampton and Upper Bucks counties targeted by the consortium of energy companies for property acquisition through eminent domain.

These properties are part of the proposed route for the 36-inch-diameter natural gas line connecting Pennsylvania’s Marcellus Shale region 120 miles southeast to Mercer County, New Jersey.

PennEast opened eminent domain proceedings, suing property owners in federal court after efforts failed to purchase land for the route.

Federal regulators approved the $1 billion pipeline Jan. 19, conditioned on PennEast securing other necessary approvals.

The county disputes PennEast’s power to condemn publicly preserved open space through eminent domain. The parcels in Lower Nazareth and Williams townships are protected from condemnation, according to the county.

“The county’s position is that PennEast is trying to use eminent domain for a private enterprise, not one that benefits the public,” the county says in a news release. “The county is also disputing that PennEast is offering fair market value for the easements and that attempting to acquire the title to the property rights prior to payment for compensation violates the separation of powers doctrine.”

Michael Corriere, the county’s first assistant solicitor, requested a jury trial, maintaining that taking the conservation easements are not required for the installation, operation or maintenance of the pipeline. The county also requests PennEast’s suit be dismissed and the county be awarded attorney fees and costs.

PennEast declined to comment on the county’s position. But in a statement following the Jan. 19 conditional approval by the Federal Energy Regulatory Commission, PennEast spokeswoman Patricia Kornick said of eminent domain proceedings:

“Through hundreds of meetings and discussions, PennEast has worked collaboratively with landowners, with approximately 75 percent providing survey access

“Unfortunately, organized and unaccountable opposition groups have their own political agenda and use landowners’ withholding survey access to advance that agenda — to the detriment of the landowners. While PennEast views legal proceedings as emotional, burdensome and costly for all involved, it exercised that last-resort option Feb. 6.”

PennEast hopes to begin construction this year on the pipeline, first proposed in August 2014. It is designed to carry up to 1.1 million dekatherms per day of natural gas for domestic energy use, the equivalent of supplying 4.7 million homes. Construction is projected to take about seven months.

Written by: Kurt Bresswein | lehighvalleylive.com

Graphic caption: This PennEast Pipeline Co. LLC shows the route of its proposed 116-mile, 36-inch-diameter natural gas line from Luzerne County, Pennsylvania, to Mercer County, New Jersey, as of September 2016, the most recent map available on the energy company consortium’s website. Visit penneastpipeline.com for a more detailed version. (Courtesy image | For lehighvalleylive.com) 

By |March 12th, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Mariner East Additional Easements

The Sunoco Pipeline Mariner East 2 pipeline construction as resulted in many spills and permit violations. The Pennsylvania Department of Environmental Protection warned Sunoco Pipeline and then suspended construction. Later, the DEP agreed to allow the restart of construction via a $8,600,000 fine. Faherty Law Firm had negotiated temporary construction easement down from 36 months to 18 months. Now, Sunoco seeks an extension of the temporary construction easements to complete required work. Property owners are not obligated to sell the extension of the prior easements. Faherty Law Firm represents property owners threatened by additional property rights requests from Sunoco Pipeline.

By |March 9th, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Protect Our Pennsylvania

A new volunteer organization is working to protect private property rights in Pennsylvania. Join in this admirable cause via ProtectOurPA@gmail.com.

Pennsylvania Landowners Coalition Fighting to Restrict Eminent Domain for NatGas Pipelines

A new coalition formed by landowners in Pennsylvania wants to strengthen private property rights and lobby lawmakers to limit the use of eminent domain by natural gas pipeline companies working across the state.

Protect Our Pennsylvania organized its first rally at the state Capitol in Harrisburg on Tuesday. It issued an invitation to supporters on social media, indicating the rally would be a public meeting to strengthen its mission of “individual rights to private property and public safety over statewide abuse of eminent domain.”

The coalition cited landowners’ struggles with Sunoco Logistics Partners LP’s Mariner East (ME) 2 pipeline and said it wants eminent domain to be applied more narrowly as more midstream companies work to build-out infrastructure to serve Marcellus and Utica shale production.

The 350-mile ME 2 would transport ethane, butane and propane from processing and fractionation facilities in Eastern Ohio, Western Pennsylvania and West Virginia to the Marcus Hook Industrial Complex near Philadelphia for storage, processing and distribution to domestic and international markets. ME 1 is fully operational, delivering ethane and propane within the state from Western Pennsylvania to Marcus Hook, and the company is gauging interest in a third pipeline that would run parallel to ME 2 and be constructed at roughly the same time (see Shale Daily, Sept. 15, 2015).

State courts have ruled against landowners that have challenged the pipeline (see Shale Daily, Feb. 26). Opponents argue ME does not have eminent domain powers as an intrastate system because it’s been designed as an interstate pipeline to primarily serve overseas and out-of-state markets.

Sunoco has claimed in court that it has a right to condemn property because of its status as a regulated public utility under state law. At trial, it has produced orders and certificates of public convenience relating to ME. It also has argued that the project would have a major economic impact in the state.

Protect our Pennsylvania said it has started conversations with lawmakers about its goals. The coalition has been formed at a time when gathering and transmission pipelines are facing growing opposition across the country. In addition to the infrastructure that has already been built or expanded to handle more shale gas, the Pennsylvania Department of Environmental Protection has said it expects 25,000 miles of gathering lines and up to 5,000 miles of transmission lines to be built in the state over the next decade.

Written by: Jamison Cocklin | www.naturalgasintel.com

By |March 7th, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Further Challenge To PennEast Pipeline

The New Jersey Department of Environmental Protection had previously presented concerns with the environmental impacts of the proposed pipeline from northeastern Pennsylvania into New Jersey. Now, the Department has taken the more agressive step of asking the federal regulators of FERC to reconsider the FERC approval from last month. Traditionally federal and state regulators have been very supportive of pipeline development. This filing follows the recent trend of more active regulatory oversight.

NJDEP asks Feds to reconsider PennEast pipeline decision, setting up potential legal battle

The NJDEP has asked FERC to place a stay on eminent domain proceedings by the controversial pipeline company.

The New Jersey Department of Environmental Protection filed a request with federal regulators Friday, asking that they reconsider a key decision regarding the controversial PennEast pipeline. The move signals an escalation in the DEP’s opposition to the project and could set the table for a legal battle.

In January, the Federal Energy Regulatory Commission granted a certificate to PennEast that would allow the company to use eminent domain to access public and private lands to survey for the pipeline, and obtain the land if necessary for construction. The tool is essential for the PennEast Pipeline Co., which is seeking to build a 120-mile natural gas pipeline from northeast Pennsylvania to Mercer County. The company has been hamstrung by landowners along the proposed path who have denied it access, including the state of New Jersey.

The DEP has cited the lack of access in denying PennEast’s applications to the state, initiating a Catch-22 that suggested the agency opposed the project. But the agency’s request that the FERC hold a rehearing, and also stay the use of eminent domain until one can be held, shows it is taking a more active role in filing against the project.

In its filing, the DEP argued that the FERC incorrectly confused PennEast’s promises to “mitigate” environmental concerns, with legal requirements that pipelines avoid environmentally sensitive areas.

“Although the pipeline proposes to cross over 30 streams in New Jersey, NJDEP has not been provided with any site-specific stream crossings detailing how environmental impacts would be avoided or minimized,” the filing stated.

The state also argued that simply allowing surveyors to access land “undoes the preserved nature of the land, even if the pipeline will never ultimately cross that land due to route changes.” It also made the argument that the department would require up to a year to review any new application submitted by PennEast, and thus a stay would cause no harm to PennEast as the FERC considers the rehearing request.

The DEP also noted that it wasn’t the only entity requesting a rehearing: The pipeline’s docket showed at least 14 parties also filed rehearing requests this past week, including the New Jersey Sierra Club, Delaware Riverkeeper Network and New Jersey Natural Lands Trust.

In a phone interview, New Jersey Sierra Club Director Jeff Tittel said the filings set up a potential legal battle.

“If FERC doesn’t grant (the requests), you can then go to federal court to challenge the decision,” Tittel said.

Court records show PennEast has filed eminent domain proceedings against more than 180 noncompliant properties in New Jersey and Pennsylvania. The DEP’s rehearing request noted that PennEast had filed proceedings against 150 parcels in New Jersey.

Written by: Kyle Bagenstose | The Intelligencer

By |February 21st, 2018|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|