Busting FERC's Myth Busting
FERC Answers NWPRC's Questions
National Energy Board of Canada Landowner Rights
Drawing The Line
Why it’s Time To Rein In the Use of Eminent Domain for Natural Gas
When the country was young, vast, and undeveloped and the government strategy of expansion was supported by its people for the benefit of themselves alone, the need to condemn property to extend roads, electricity and rail did confer enormous benefits to the country as a whole. Indeed expansion, even up to and including the construction of the interstate highway system, was part of securing the very territorial integrity of the United States itself. This is not the situation we find ourselves in today. Today thousands of landowners are now facing what may be the largest mass condemnation action in the Northwest's history, granting private corporations permanent right of ways and access to thousands of acres of prime farm and forest land.
The Natural Gas Act (NGA) of 1938 grants FERC the power to issue a "certificate of public convenience and necessity" enabling the taking of property for pipelines. There is 300,000 miles of interstate and intrastate transmission pipeline buried under U.S. soil (By contrast the US federal and state highway system is 160,000 miles). Starting in 1978 the gas industry started a path to deregulation and increased competition. This in combination with increases in demand has led to a boom in the natural gas business.
In the process FERC, the Federal Energy Regulatory Committee, has moved from regulator to free-market cheerleader. FERC's inclination is to consider multiple projects and let "the market" decide which ones get built. But where these projects are sited is not entirely a function of a free market. Eminent domain makes it possible to put them wherever pipeline technology will allow. And therein lies a host of issues.
Eminent domain is not a fair game. It forces unwilling sellers into a transaction they wouldn’t enter into in a free and open market. There is no requirement for pipeline companies to honor property lines or to start with willing landowners or to prefer existing rights-of-way. There is no provision enabling owners along a pipe route to pool their resources to strike a good and fair agreement. Companies have a responsibility to do the most good for the public with the least harm to individuals. But it seems the “least harm” component has been replaced with a “least cost” one. When it comes to eminent domain the pipeline company holds all the cards.
Eminent domain, in theory, provides for “just compensation.” However, while gas companies negotiate contracts every day, for most landowners this is a once in a lifetime event. There is no help in assessing the other losses such as loss of value to the rest of the property outside the easement area; the owner must prove it anew in each case. There is no ongoing revenue, simply a one-time payment—even though there are ongoing restrictions to the landowner and the gas company maintains ongoing rights to access. And no legal assistance. In practice, eminent domain for gas pipelines falls far short of the just compensation standard.
Eminent domain enables LNG facilities to be sited far from the markets they serve. For example, California wants the environmental benefits of generating more of its electricity from natural gas, but it has resisted putting LNG facilities on its coast. No matter, eminent domain makes it possible to put the plants in Oregon and pipe it down.
Eminent domain enables multinational corporations and well funded venture firms to raise money for speculative projects. This system places too heavy a burden on those targeted for pipelines. Merely drawing the line on the map, for projects that may or may not be realized, has uncompensated, real-world effects. People in the path of the preliminarily pipeline route (routes often move up to miles away) may not be able to sell their land when and how they would like; they may experience stress and anxiety; precious time is taken up in meetings and phone calls, and all of this activity is uncompensated; while corporations stand to reap millions.
Eminent domain has strayed far from the original intent of "public use" when it comes to mean turning over control of one's property to foreign corporations or their subsidiaries. The international private market has responded to demand and the overwhelming public benefit has been achieved. The marginal additional extensions to the existing system by private companies for private gain puts it at the same level of public benefit as fast food restaurants and large retailers. That is, able to pay their own way and in no need of special status.
What would happen if pipelines did not have blanket access to eminent domain? The best pipeline routes might be sought after and possibly bid on by competing customers. Landowners might be paid for options on their property while a route was assembled. The difficulty in creating long haul lines might cause facilities to be built closer to their point of use. What would happen without eminent domain? I don't really know, but I'm willing to let a free market figure it out.
Our Mission
Our mission is to ensure that the 5th Ammendment to the Constitution is not abused by taking people's property for private economic gain under the guise of the "public good." As a first step we are approaching our city and county governments with the Resolution & Order below. If you would like assistance in presenting this to your local government send an email to info@nwprc.org.
Before the [Council or Board] of
[Your city or county]
WHEREAS, The founders realized the fundamental importance of property rights when they codified the Takings Clause of the Fifth Amendment to the Constitution, which requires that private property shall not be taken for public use, without just compensation, and
WHEREAS The determination as to whether a contemplated use be really public is a judicial question, best determined as such without regard to any legislative assertion that the use is public, and
WHEREAS Ownership rights in rural communities are fundamental building blocks for our Nation's agriculture and forestry industries, which continue to be some of the most important economic sectors of our economy, and
WHEREAS Rampant, speculative, and careless routing of proposed right-of-ways causes undue stress and anxiety, and real and wasteful expenditures of time and money to those affected, and
WHEREAS The Energy Policy Act and Natural Gas Act, usurp the jurisdiction of state and local governments for utility right-of-ways, and denies control by residents and state and local officials, who have a better understanding of the economic, environmental, and safety concerns that exist in their communities, now
THEREFORE BE IT RESOLVED THAT the [your governing body] finds that the use of eminent domain for the purpose of private development of rights-of-way is a threat to agricultural, forestry, and other property in rural [your county] and that the [your governing body] should protect the property rights of county residents, including those who reside in rural areas. Where utility rights-of-way are sought, they should always prefer, in order: uninhabited areas, existing rights-of-way, unoccupied lands, willing landowners; never forced upon unwilling landowners.
Property rights are central to liberty in this country and to our economy. The use of eminent domain to take farmland and other rural property for private economic development threatens liberty, rural economies, and the economy of [your county or city]. The [your governing body] has a duty to protect the property rights of its residents in the face of eminent domain abuse
If you agree, please sign our petition