PA Public Utility Commission Grants Utility Status to Pipeline Company Giving it Eminent Domain Powers

The Pennsylvania Public Utility Commission (PUC) has voted to grant Laser Northeast Gathering, a natural gas pipeline company, status as a public utility. The decision will grant Laser the power to condemn private property by eminent domain. That is, Laser will have the power to run pipelines under people’s property even if they don’t want it.


The state Public Utility Commission intends to declare natural gas pipeline company Laser Northeast Gathering a public utility, giving it the power to condemn private property by eminent domain.

By a 3-2 vote, the commission tossed back to Administrative Law Judge Susan D. Colwell her recommendation to deny Laser’s application for a "certificate of public convenience," which would grant it utility status and the right to wield eminent domain.

The narrow majority of the commission disagreed with Judge Colwell’s arguments that the commission lacked the authority to regulate the activity and that Laser didn’t meet the definition of a public utility.

In a fiery dissent, Commissioner James Cawley warned of "grave implications for individual Pennsylvanians and their communities." He said his colleagues’ decision would upset the balance in easement negotiations, giving more power to pipeline companies.*

MDN’s opinion: This is a bad move by the PUC. Commissioner Cawley is right. Before you spend millions on a well, you should first make sure you’ll be able to run a gathering pipeline from the well to a larger pipeline. Don’t force a pipeline on someone who doesn’t want it!

*The Citizen’s Voice (May 20, 2011) – PUC gives nod to eminent domain power for pipeline company

  • RHouck

    Next step, forced pooling (which I am for). To get there, the owners DO have to be protected in a meaningful way. Without lots of lawyers, suits, etc. A sort of no-fault process. In much (all?) of Europe, these gas deposits are owned by the state, so these issues don’t even come up there!

  • NYShaleGasNow

    Jim,

    Your headline makes this decision sound made, whereas other outlets have reported this decision as more like a punt.  What’s true?  What’s real?  What’s the deal?

    http://www.bizjournals.com/pittsburgh/blog/energy/2011/05/puc-marcellus-pipeline-maybe-utility.html

  • http://marcellusdrilling.com Jim Willis

    Good point Andy. It’s not an automatic, foregone conclusion, there is still some possibility it won’t happen–but it’s about a whisker away from happening. The PUC’s ruling makes it (in my opinion) a fait accompli. That is, they’ve said with this ruling “do it” to the judge and now the only delay is to wait for her to do it.

  • dell

    What is wrong with the governments? Our rights are going down the drain. To take from a person his property and give it to a company for their profit is wrong.

  • http://marcellusdrilling.com Jim Willis

    I agree with your sentiment. Eminent domain is a long established rule. Sometimes there are cases–an interstate highway for example–where there is a “greater good” for the public and hence the government can take the land, but in the taking, they must fairly compensate the landowner. Although getting this shale gas energy is very important in my book, it’s not a “vital public interest”. It’s not in the same league as a highway or other public works project.

    The same way forced pooling should not be allowed (don’t drill under me if I don’t want you to), neither should forced pipelines be allowed. If there’s a single landowner holdout somewhere, make it worth that person’s time and up the compensation to the point they will allow it… ie, buy them off! But don’t *force* them to allow it. It’s just not right in this case in my opinion.

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  • Letty

    If you want to talk about eminent domain, try living in WV where mineral ownership can be severed from surface ownership.  Not only do mineral owners trump sufrace owners giving them a sort of twisted eminent domain over them, but now surface owners in WV are  facing the possibility of “pooling”.  There are internet sites which discuss how some banks are thinking twice before financing mortgaging if gas leases and/or Marcellus wells are on a property. Banks can consider that gas pooled from unleased land devalued and considered damaged good by banks and insurance companies when those unwilling parties seek financing or insurance. So in states where mineral severance exists, should we post signs over their interstates stating, “Buy at your own risk”.  Or how about “Gasland–guaranteed to devalue your property”.     

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