PowerSource Voice: FERC approval can ensure eminent domain doesn’t stop new pipelines



Historians credit Chinese philosopher Lao Tzu with saying, “A journey of a thousand miles begins with a single step.”

In the latest chapter for energy companies in pipeline expansion and land acquisition, Sunoco Logistics is looking to impose eminent domain on 50 miles of Washington and Westmoreland counties to help it complete a journey of about 300 miles to the East Coast — and potentially farther.

This 50-mile extension to the Mariner East Pipeline will join Sunoco’s existing pipeline in Delmont, where its products can then be transported to the Marcus Hook Refinery outside Philadelphia.

Property owners throughout Washington County, however, have gone to court to prevent the pipeline from crossing their land.

Sunoco claims it is a public utility corporation that could impose eminent domain on private property because the pipeline will serve the public good by providing products derived from Marcellus Shale drilling efforts to consumers across the state.

Attorneys representing the property owners argue that Sunoco needs to receive eminent domain authorization from the Federal Energy Regulatory Commission (FERC), because — as a private company — Sunoco’s activity in this case falls under federal law.

In an effort to speed the process of acquiring the land, Sunoco’s attorneys have countered that previous FERC rulings have set precedents allowing private companies to build a pipeline if the project serves the public good.

Avoiding lengthy eminent domain battles will play a role in how quickly energy companies can move forward in building their pipelines and how fast their products get to customers on the East Coast.

The reality remains that energy companies likely won’t be able to acquire the land without FERC approval, regardless of previous decisions favorable to the industry. Once energy companies receive approval at the federal level, however, they likely won’t have to argue again before courts at the local level.

Previous FERC approvals have determined these types of pipelines do serve the public good by efficiently providing cheaper gas and that the energy companies are, in fact, acting as public utilities.

To manage this process and avoid stalemates in local courts, it is incumbent upon the energy company to seek out and hire the most effective outside counsel to guide them through a complicated FERC approval process featuring multiple layers that include — among other provisions — conducting an environmental impact statement and seeking public comments from the local community on the project.

Local and state officials are under the microscope from their constituents to ensure the pipelines are environmentally safe and blend into the land as seamlessly as possible. They want to know how the pipeline will look from an aesthetic standpoint and what the impact might be on the surrounding trees, water and wildlife.

Addressing these types of issues still might not appease individual property owners who covet their basic rights to own and determine the fate of their land. That’s why it’s even more imperative for these companies to have their ducks in a row before submitting their applications to FERC. Otherwise, eminent domain battles will continue with individual property owners.

A number of factors indicate the stalemate for Washington County landowners is likely just delaying the inevitable.

Joe McGinn is the senior manager for public affairs at Sunoco Logistics. He told an audience in Washington County last month that Sunoco already has contracts from other energy companies to get their ethane to the refinery near Philadelphia and also has begun discussions to build a second Mariner East pipeline that starts in Ohio, travels through West Virginia and ultimately connects with the same pipeline currently being argued before the courts.

In addition, news outlets have reported that Consol Energy plans to use Mariner East to get ethane to Philadelphia and then transport it across the Atlantic to Europe. So, in that case, a journey of 3,500 miles will in fact begin with the completion of a 50-mile long pipeline.

The supply of natural gas is readily available and millions of people stand to benefit from new pipelines and pipeline expansion. It is a matter of when, not if. Once FERC determines the gas needs to get to customers for the benefit of the greater good, it will get there.

The Sunoco case in Washington County is the tip of the iceberg. More and more private companies are going to want in on this opportunity. The proper guidance as to how to manage the FERC process is essential to avoiding court battles that might halt them in their tracks.

William P. Bresnahan II is a principal in the Pittsburgh office of Dickie, McCamey & Chilcote, P.C. He can be reached at bbresnahanii@dmclaw.com or 412-281-7272.

To contribute to PowerSource Voice, a regular feature offering insight and opinion on energy subjects, contact Associate Business Editor Teresa F. Lindeman at tlindeman@post-gazette.com

 

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