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Our opinion: FERC and private property

February 1, 2012
The Times Observer

These are the kind of stories that put the Marcellus Shale gas industry in a bad light:

"When federal regulators approved a 39-mile natural gas pipeline through northern Pennsylvania's pristine Endless Mountains, they cited the operator's assurances that it would make sparing use of eminent domain as it negotiated with more than 150 property owners along the pipeline's route.

Yet a few days after winning approval for its $250 million MARC 1 pipeline in the heart of the giant Marcellus Shale gas field, the company began condemnation proceedings against nearly half of the landowners - undercutting part of the Federal Energy Regulatory Commission's approval rationale and angering landowners." - The Associated Press.

Eminent domain, technically the right of government or its agent to expropriate private property for public use with payment of compensation, is always a ticklish subject, particularly among those who believe that private property is a right equal to those four enumerated in the First Amendment.

In most cases, land is acquired through the method for the clear public good, a road for emergency services for instance.

In this case, FERC is allowing a private company to expropriate the land for a gas pipeline, with the caveat that eminent domain should be used sparingly and only as a last resort.

But that's not what is happening, and private landowners are feeling betrayed by their government.

They are taking their case to court, contending that the pipeline's owner, Central New York Oil and Gas Company LLC, hasn't negotiated with them in good faith, because, with eminent domain, it doesn't have to.

What has harmed the natural gas industry in the Marcellus field hasn't been onerous regulation or taxation; it has been the mad rush to get the gas in the network before the price starts falling. When there is an opportunity to make billions of dollars instead of mere millions of dollars, the motivation for steamrolling becomes very strong.

Central New York Oil and Gas may fare well in court; it may have done all it could to acquire its pipeline route. The court will decide the issue, but the matter leaves the public with the sense that the rights of property owners are being trampled in a rush to profits.

And that's bad public relations.

 
 

 

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