Bacon's Rebellion

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Pipelines Clear Another Regulatory Hurdle

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by

James A. Bacon
in ,

Another regulatory barrier to the Atlantic Coast Pipeline and Mountain Valley Pipeline has fallen. The board of trustees of the Virginia Outdoors Foundation unanimously approved Monday applications for “conversion of open space” by the two natural gas pipeline developers that propose to cross 11 VOF conservation easements.

From the outset, VOF informed the pipeline companies that their incursions would be incompatible with the conservation values of the easements, therefore triggering a process in state law known as “conversion” of open space. (See the VOF announcement here.)

The two resolutions included several conditions, including restrictions on the footprint of the pipelines and access roads, the conveyance to VOF of more than 1,100 acres of substitute land in Highland, Nelson, and Roanoke counties, and the transfer of $4.075 million in stewardship funding for the properties’ long-term care and maintenance.

The VOF easements will remain in place on the properties with overlaying permanent rights-of-way for the pipeline developers.

Last week the Federal Energy Regulatory Commission (FERC) granted the ACP and MVP certifications of public convenience and necessity. The VOF vote eliminated one of the few remaining regulatory obstacles to the project. The pipelines still face one significant hurdle, however: meeting state regulatory standards for erosion and sediment control.

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9 responses to “Pipelines Clear Another Regulatory Hurdle”

  1. LarrytheG Avatar
    LarrytheG

    The thing that surprised me a bit was legal ability to “take” that was ostensibly put into “permanent” conservation easements.

    That’s something I had not realized … and it has implications for other future things…such as roads, powerlines, even other “necessary” public infrastructure .. perhaps schools or carpool lots, or Courthouses, etc..

    So something must have changed.. or I had a wrong idea from the get go about Conservation easements.

    1. TooManyTaxes Avatar
      TooManyTaxes

      Congress gave the power of eminent domain to interstate pipelines in 1938. It’s in the Natural Gas Act. Once a pipeline gets a “certificate of public convenience and necessity,” it has the authority to condemn land for right-of-way. But many people agree with Larry by arguing there is no good reason to continue to give a pipeline the power to use eminent domain.

      I believe the statute is section 717(h). It reads: When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipe line or pipe lines for the transportation of natural gas, and the necessary land or other property, in addition to right-of-way, for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipe line or pipe lines, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located .”

      1. LarrytheG Avatar
        LarrytheG

        TMT – if a pipeline company is automatically given the power of eminent domain why would Tallgrass Energy – the developers of the Rockies Express pipeline do this:

        The Rockies Express Pipeline covered portions of eight states and involved 1,352 miles of right of way for a 42” welded steel
        natural gas pipeline system. There were 4,843 tracts with more than 6,500 individual owners. The project was accomplished within budget and with nearly 100% voluntary acquisition – acquisition was 99.7% successful.

        https://www.irwaonline.org/eweb/upload/mar_Web_RockiesExpress.pdf

        1. TooManyTaxes Avatar
          TooManyTaxes

          I guess the REP was able to negotiate easements or fee title successfully. I don’t think any party relishes condemning property. It’s often expensive and ugly. Going to court is never fun.

          I suspect that with all the wide, open spaces out west and, often, huge landholdings, property owners might have less concern about having a pipeline than do people out east. But that’s speculation.

          The bottom line is the law is what the law is. And many people don’t like it.

  2. LarrytheG Avatar
    LarrytheG

    It’s not clear whether its’s the State or the Feds that are granting the use of eminent domain to the pipeline companies but the VOF were convinced that the FERC decision cleared the way for the land to be condemned and thus sought land to replace the land lost.

    In practical terms – the longer term impacts of pipelines and powerlines to land is minimal…… in my view… not like a road or any kind of structure … if anything – it actually provides habitat for vegetation that would not otherwise grow under a tree canopy.

    And if something goes wrong – the impacts to people are minimal.. also as they are not located nearby.

    On the other hand – it looks like there are potential issues as the land is not to be condemned for govt use but instead for a “public necessity” rather than “economic benefit” and the parties seeking the condemnation are only saying it’s for potential electricity demand – which is based on what the utilities are claiming – and that is disputed …

    The argument will be made that “public necessity” is more a viewpoint than a demonstrable fact. The claim is more along the lines of “we might need more electricity – AND .. the ONLY way we can meet that need is if we have a long pipeline that is far far away from the sources of the gas. Wny a 500 mile pipeline is a “public necessity” when gas power plants could be located much closer to the source of the gas – is going to be a source of contention if there is money enough for the opponents to contest the decision – and I’d not be so sure that there won’t be…

    We often hear, in this blog.. reported examples of various illegitimate folks “gaming” the system… and I’d assert these pipeline proposals based on “public necessity” come pretty darn close to that definition.

    there is no public necessity for 500 mile pipelines to produce electricity …

    1. TBill Avatar
      TBill

      Larry your position seems to be all power generation and industry must be located within 50-miles of the current natural gas sources, and that elimination of pipelines should be the top priority of all future build out of the national economy.

      From an engineering perspective, it is not easy to use natural gas, because well, it’s a gas. As such expensive equipment is needed to allow greater reliance on that relatively clean source of energy, partially because the past reliance on nearly 100% coal left us behind on nat gas, and also wind energy, we delayed decades. Solar I think we are not so far behind as a Country, because that is a newer development.

      Just because the nat gas today is coming from Pa. does not mean we have to cede all economic development to Pa. Tomorrow (in the long term sense) that gas could be imported or come from a different state. The point is, if we are to be in a position to utilize nat gas as a country as part of our energy picture, we should be able to get supply and be a stronger country, to the extent other countries are in less well positioned to include natural gas a strategic element of their energy portfolio.

      How we go from there, to actual siting decisions is a difficult process, but I favor doing a competent good job that has minimal negative impact on the environment and landowners.

      1. LarrytheG Avatar
        LarrytheG

        Nope, Tbill.. My position is to ask why it is a “public necessity” that they be 500 miles away… that’s not a public necessity.. those plants could be a lot close … The 500 miles is basically a for-profit venture that should not be using eminent domain from individual property owners as a de-facto subsidy for the investors.

        I LOVE gas… but I think it should be developed by Capitalism not right-of-way subsidies for investors.

        re: ” Just because the nat gas today is coming from Pa. does not mean we have to cede all economic development to Pa. ”

        I totally agree but I think that is a market issue not one that is a “public necessity” that merits the use of eminent domain to take private property.

        The Rockies Express Pipeline covered portions of eight states and involved 1,352 miles of right of way for a 42” welded steel
        natural gas pipeline system. There were 4,843 tracts with more than 6,500 individual owners. The project was accomplished within budget and with nearly 100% voluntary acquisition – acquisition was 99.7% successful.

        https://www.irwaonline.org/eweb/upload/mar_Web_RockiesExpress.pdf

        Now if these folks can build a pipeline 3 times as long through 8 different states without using eminent domain why can’t Dominion do it 1/3 the distance over two states?

        re: ” The point is, if we are to be in a position to utilize nat gas as a country as part of our energy picture, we should be able to get supply and be a stronger country,..”

        I totally agree.. but “country” is not just Virginia nor property-owners in Va. This should be a wholly capitalistic venture because it is , in fact, a for-profit venture with investors who intend to sell the gas at the highest price they can – for the most profit they can… that’s pure capitalism and the way that such investor-owned businesses should function..

        Once we cross the line to subsidies for business ventures.. we’ve shot ourselves in the rump.

  3. TomH Avatar
    TomH

    I have two main concerns about this:

    First, it severely disrupts what was intended with the easements. The conversion process exists to allow land that is under conservation easements to be converted for a public use. Usually a small amount is nibbled away to make room for a road expansion, or a public building.

    Allowing a pipeline to go through the middle of these properties fundamentally changes their nature. The owners of these properties purchased them because of their diverse and unique habitat that they thought should be preserved in perpetuity. By granting access for the pipelines through the national forests and these adjoining properties, they will now be designated as a utility corridor for long-term development by other projects.

    Trading open farmland that Dominion has purchased in another location for forested, unique habitats does not seem to be an equal exchange.

    The Virginia Outdoors Foundation felt that this process significantly undermined the concept of conservation easements but they believed they could not resist the federal preemption of their authority.

    Second, is the entire issue that these pipelines serve a “public good”. Under the Natural Gas Act anyone building an interstate gas pipeline is considered a “Natural Gas Company” (not a utility). Even though FERC issues a Certificate of Public Convenience and Necessity, they evaluate neither of those issues.

    FERC does not assess the market demand for more gas supply nor the ability of existing pipelines to serve it. They rely only on contracts with shippers. For most pipeline projects, these contracts are primarily with affiliates of the owners of the pipeline. Such self-dealing arrangements do not necessarily reflect market demand, as Commissioner LaFleur’s recent dissent identified. Nor is there a consideration of the economic effect (convenience) on ultimate customers of the gas created by the new, more expensive pipelines.

    If the projects are not needed to have an adequate supply of gas and they cost us more, how do they serve a “public purpose”? They exist purely for the financial gain of their owners.

    If no greater good is provided, how can they qualify to override conservation easements and permit the use of eminent domain?

    A lawsuit has been filed against FERC that raises this very issue. It claims that FERC’s process in awarding the right to use eminent domain does not qualify on constitutional grounds.

    1. TooManyTaxes Avatar
      TooManyTaxes

      Re Conservation Easements. I’ve always found both Fairfax County and VDOT fairly ready to swap land under a conservation easement for other land when the former was needed for some legitimate public purpose.

      I don’t see a legal problem condemning private property that is subject to a conservation easement. I fail to see how granting a conservation easement is different from granting some other type of easement (or no easement at all) that transforms a parcel into one that cannot be condemned. It strikes me that giving land subject to a conservation easement freedom from eminent domain, while no exempting other property, raises equal protection grounds.

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