Author: mlansing

Blurring Necessity and Just Compensation – Pipeline Development Dilemma

As renewable energy increases, and with coal being phased out, landowners and environmental advocacy groups have begun to focus on pipeline development, concentrating on the “need” to account for downstream greenhouse gas emissions and pipeline developers’ use of condemnation powers. For eminent domain, the argument includes that its application against landowners may be “improper”, even raising constitutional claims once thought previously addressed. Such arguments have blurred the line between the public necessity of a pipeline project—the constitutional prerequisite for a valid taking—and the appropriate just compensation due a landowner. For natural gas pipelines and other pipelines subject to federal regulation, the pipeline company’s eminent domain authority arises after the necessity determination (conditional or otherwise) by the Federal Energy Regulatory Commission (“FERC”).[i] Thus, a landowner’s rights are not “jeopardized.” Instead, the landowner is, ultimately, paid just compensation for the taking. Thus, necessity for the pipeline project, arguably, has nothing do with what just compensation should be paid or, thereby, the exercise of eminent domain. Moreover, eminent domain litigation most often arises when the landowner seeks to preclude access to their property for testing and studies or to simply maximize their just compensation (whether state or federal court). Once necessity has been determined, state and federal courts lack authority to consider whether the pipeline route is appropriate or not.[ii] Recently, the Pennsylvania Supreme Court has rejected a number of landowner applications...

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As the recent decision in Algonquin Gas Transmission, LLC v. Weymouth Conservation Commission[1] illustrates, local units of government have limited options to foreclose the siting of natural gas pipelines and appurtenances. The Natural Gas Act (the “NGA”) provides FERC broad preemptive authority to site natural gas facilities, with only a few enumerated exceptions.[2] On October 22, 2015, Algonquin Gas Transmission, LLC (“Algonquin”) and Maritimes & Northeast Pipeline, LLC (“Maritimes”) filed an application for a Certificate of Public Convenience and Necessity with the Federal Energy Regulatory Commission (“FERC”), seeking regulatory approval of their Atlantic Bridge natural gas pipeline project (the “AB Project”). As a part of the AB Project, Algonquin sought to construct a compressor station (the “Weymouth Compressor Station”) in the town of Weymouth, Massachusetts (the “Weymouth”) on land near the Fore River currently owned by Algonquin and on which Algonquin presently operates a pipeline and metering and regulating station. Following environmental review and the close of a public comment period, on January 25, 2017, FERC issued the Certificate of Public Convenience and Necessity (the “AB Certificate”), authorizing the construction and operation of the AB Project, including the Weymouth Compressor Station.[3] Weymouth’s attempt to preclude construction of the Weymouth Compressor Station is a fascinating case study in the preemptive power of the NGA, as well as the extent localities try to apply NIMBY, even though natural gas supplies are...

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Although it granted Millennium Pipeline Co. LLC’s request, the Federal Energy Regulatory Commission (“FERC”) refused to overrule New York’s denial of a Clean Water Act (“CWA”) permit, rejecting Constitution Pipeline Co. LLC’s argument that the state waived its authority under Section 401 of the CWA. Under Section 401 of the CWA, state agencies have one year to act on a permit application by a pipeline company, or else their authority may be deemed waived. Although New York State Department of Environmental Conservation’s April 2016 denial of a CWA Section 401 water quality permit came nearly three years after Constitution Pipeline initial application, FERC found that the NYSDEC had acted within the statutory limits imposed by Section 401. FERC based its finding on Constitution’s two withdrawals and resubmissions of its applications, finding each resubmission reset the one-year deadline. Constitution Pipeline submitted its original application in 2013, then, refiled its application in May 2014, only to resubmit it again in April 2015 (to give NYSDEC additional time to review). “By withdrawing its applications before a year had passed, and by presenting New York DEC with new applications, Constitution gave New York DEC new deadlines,” FERC said in its order. “The record does not show that New York DEC in any instance failed to act on an application that was before it for more than the outer time limit of one year.”...

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The DW Energy Blog is published by Dickinson Wright PLLC to inform the public of important developments within the firm and practice areas. The content is informational only and does not constitute legal or professional advice. We encourage you to consult a Dickinson Wright attorney if you have specific questions or concerns relating to any of the topics covered in this blog.