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Pipeline Challengers Call for Eminent-Domain Overhaul

Fighting to stop two massive pipeline projects, dozens of landowners claim in a federal complaint that the outdated eminent-domain provisions of the Natural Gas Act no longer satisfy constitutional requirements.

WASHINGTON (CN) — Fighting to stop two massive pipeline projects, dozens of landowners claim in a federal complaint that the outdated eminent-domain provisions of the Natural Gas Act no longer satisfy constitutional requirements.

A Nebraska nonprofit called Bold Alliance is the lead plaintiff to the lawsuit filed Tuesday in Washington, D.C.

Joined by more than 50 families and businesses dotting the southeastern United States, the group brought its complaint against the Atlantic Coast Pipeline, the Mountain Valley Pipeline, the Federal Energy Regulatory Commission and that body’s three individual commissioners.

Consisting of a 42-inch pipe buried underground, the Atlantic Coast Pipeline is projected to run nearly 600 miles from West Virginia, through Virginia, to southern North Carolina. The 300-mile-plus Mountain Valley Pipeline will cut through West Virginia and Virginia as well, connecting to the Transco Pipeline, a mega-pipeline that ships gas to burn in the Southeast.

Bold Alliance and the other challengers claim that the pipeline companies are on their way to initiating eminent-domain proceedings under the Natural Gas Act against reluctant landowners.

Demanding an injunction, residents say “a challenge is long overdue” against the process by which federal regulators confer eminent-domain powers on private, for-profit companies.

What was once a heavily regulated industry is now “a deregulated market dominated by unregulated players in search of lucrative opportunities including spot market sales, participating in gas commodities markets and export,” the complaint states.

Bold Alliance notes that any company can obtain the power to condemn from FERC, even though the commission “does not require pipeline companies to demonstrate their projects serve a public use” before issuing CCNs, short for certificates of convenience and necessity.

“FERC’s standard of proof for ‘project need’ is so low as to be meaningless,” the complaint states. “Indeed, FERC effectively waives it in cases where pipeline companies obtain right-of-way before CCNs, thereby incentivizing those companies to wring easements out of landowners by any means necessary.”

The 44-page complaint runs through a laundry list of regulatory shortcomings, and specifies that neither the Atlantic Coast or Mountain Valley pipeline projects meet the standard for public use.

“The MVP Project does not meet this standard because it will transport gas for export, not for ultimate distribution to the American public,” the complaint states.

“The ACP Project does not meet this standard because it will deliver gas exclusively to utilities that are affiliates of ACP’s owners,” it continues.

The Department of Justice, which represents FERC, has not responded to a request for comment.

Bold Alliance has not responded to request for comment as well, nor has the group’s attorney, Carolyn Elefant.

Accusing regulators of encouraging an “irretrievable commitment of resources,” the complaint notes that the commission does not even require companies to post bonds or otherwise demonstrate sufficient assets before commencing projects.

This creates a “risk that those private, for-profit companies will not actually and ultimately pay constitutionally mandated just compensation for the property they take,” the complaint states.

“FERC’s policy of encouraging pre-certificate easement negotiations between impacted landowners and the pipeline impermissibly biases the outcome of the certificate approval process because FERC views pipeline proposals more favorably when the company has acquired most of the easements by negotiation,” another section of the complaint states. “In so doing, FERC emboldens private companies to abuse eminent domain rights by duping landowners into signing an easement agreement by threatening them with eminent domain powers that the company does not have, or by until by refusing to agree to any protective measures in advance of construction until the landowner agrees to sign an easement, often for constitutionally inadequate compensation.”

Another problem described in the complaint is the commission’s alleged practice of withholding information that might help landowners refute project need.   

Bold Alliance says also challenges the commission’s issuance of “conditioned certificates,” which authorize a taking of property rights that may not be necessary to construct the proposed project, and “blanket certificates,” which grant a private company eminent domain power equal to that of the state.

Such certificates “are not statutorily authorized and ... give pipeline companies eminent-domain powers far beyond constitutional limits,” the complaint states.

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