Big Green groups continue to sue pipeline companies and their projects in an attempt to block any new pipeline anywhere from getting built–period. One of their favored angles of attack is to try and find loopholes in, or even overturn, the Natural Gas Act of 1938.
Antis claim once pipelines are approved by the Federal Energy Regulatory Commission (FERC), they still can’t use eminent domain to begin construction (i.e. can’t “condemn” a property) until all the details are worked out for how much money the pipeline company will pay the landowner. The game then becomes to tie up the project with years-long litigation over price–to claim the Natural Gas Act does not provide for eminent domain to happen ahead of price settlement.
A pipeline in Georgia that flows Marcellus/Utica gas is the latest project to defeat antis on this issue.
In March 2015, Williams announced that its Transco pipeline subsidiary had filed an application with the Federal Energy Regulatory Commission (FERC) for its Dalton Expansion Project, which expands the Transco to flow more Marcellus Shale gas all the way to Mississippi, primarily for electric generation plants, but also for local natural gas distribution by utilities (see Williams Files with FERC to Expand Transco Pipeline from NJ to MS).
Most of the Dalton project was built in, and benefits, the State of Georgia, by delivering natural gas to an existing electric generating facility in northern Georgia operated by Oglethorpe Power Corp., delivering gas for local distribution company Atlanta Gas Light, and delivering gas for the City of Cartersville.
Transco has customers for 100% of the gas that now flows through the Dalton Expansion Project, a project which increased Transco’s capacity by 448,000 dekatherms per day of natural gas.
Construction was completed and the pipeline expansion went online in March 2017 (see FERC Grants Dalton Expansion Permission to Begin Flowing Gas).
Fast forward. A group of Georgia landowners, using Big Green money, sued Transco claiming (as they always do) that the company had no right to condemn and build the pipeline before the matter of payment was settled. You need to understand these landowners refused to negotiate with Transco and tried to block the pipeline from their property. They could have had their money long ago, but they wouldn’t negotiate. In such cases, once the pipeline is approved by FERC, the builder has the right to enter properties and build the pipeline, while a separate court case works its way through the system to settle the issue of compensation.
If pipeline companies had to wait until all compensation court cases are settled, projects would be delayed by years. Which is, of course, what Big Green is after.
So the landowners sued, and appealed, and appealed, all the way to the federal Eleventh Circuit Court of Appeals.
In December the Eleventh Circuit ruled in favor of Transco. So the landowners, again using Big Green money, appealed to the U.S. Supreme Court. On Monday the Supremes gave the case a pass, meaning it’s done. Finished. The landowners have lost, and Transco has won. More importantly, the rule of law in maintaining the Natural Gas Act of 1938 has been upheld.
The U.S. Supreme Court on Monday passed on reviewing an Eleventh Circuit ruling that allowed a Williams Cos. unit to build a Georgia pipeline expansion despite landowner opposition to the project.
The Eleventh Circuit held in December that pipeline companies can be given immediate access to property after the Federal Energy Regulatory Commission greenlights the project.
Georgia landowners had urged the high court to review the decision, in which the Eleventh Circuit agreed with a lower court that Transcontinental Gas Pipe Line Co. could access properties where owners had resisted the construction of the Dalton Expansion Project.
The appeals court said the Natural Gas Act allows pipeline companies to exercise eminent domain once their projects are approved — a view it said is consistent with other circuit courts — and allows a federal court to issue a preliminary injunction “granting a pipeline company access to a landowner’s property before the conclusion of condemnation proceedings.”
But that conclusion, the landowners said in its March 6 certiorari petition, expands the eminent domain authority enshrined in the NGA far beyond what Congress intended.
“If Congress had felt quick take authority was warranted under the NGA, then it certainly could have delegated this authority to pipeline companies,” the landowners said. “The historical reticence of Congress to delegate quick take authority to private entities makes the courts’ willingness to confer a judicially-created quick take procedure on natural gas companies all the more extraordinary.”
The Dalton Expansion Project is now built and in operation. FERC signed off in August 2016 on the project, which involved building 115 miles of new pipeline in Georgia.
In upholding the lower court ruling, the Eleventh Circuit said that there’s nothing in the NGA “indicating that Congress intended to foreclose the district court from issuing a preliminary injunction granting a pipeline company immediate access to property for which it has established a right to condemn under the act.”
The appeals court looked at whether Transco’s move to take the property was valid. The debate was over whether the property was necessary for the project and whether an agreement could have been reached by the company to acquire the easements. The landowners argued that discovery, which the district court did not allow, was important for figuring out whether the land at issue “conformed to the right-of-way approved by FERC.”
But the Eleventh Circuit said the landowners hadn’t shown that further discovery was necessary and weren’t able to show the company needed to do more to reach an agreement.
The appeals court also said the record supported the district court’s conclusion that the harms to Transco from project delays outweighed the harm the landowners would suffer by having the company access their properties prior to litigation over compensation.
“As a result, petitioners have now been deprived of their property without any compensation for over two years, even as respondent profits from its use — pumping as much as 44.8 million cubic feet of natural gas through it every day,” the landowners said in their Supreme Court petition.
Harry Camp, an attorney for the landowners, said he’s disappointed the Supreme Court passed on the case and hopes it will reconsider after reviewing similar petitions that have been filed challenging pipeline companies’ eminent domain authority.
“This judge-made procedure that allows pipeline companies to access private land without any payment is an area in desperate need of reform,” Camp told Law360 Tuesday. “It is at odds with the entire canon of eminent domain jurisprudence — state and federal.”*
*Law360 (Apr 29, 2019) – High Court Won’t Hear Ga. Pipeline Land-Taking Dispute
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