Pipelines are a necessary part of drilling for and transporting shale gas. But they can also be one of the most contentious parts—especially when the government confers the power of eminent domain to a pipeline company who then can force landowners to accept the pipeline, weakening their bargaining position. A recent example is the MARC 1 in northeast Pennsylvania, a key piece of infrastructure for the Marcellus Shale. The MARC 1 is a high-pressure 30 inch steel pipeline that will connect to major interstate pipelines and to a gas storage facility in southern New York state.
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.
Some of the landowners are now fighting the company in court, complaining that Central New York Oil and Gas Company LLC steamrolled them by refusing to negotiate in good faith on monetary compensation and the pipeline’s location. Their attorneys say CNYOG has skirted Pennsylvania’s eminent domain rules.
The company, a subsidiary of Inergy LP of Kansas City, Mo., insists it’s trying to reach a "fair settlement" with all property owners and wants to be a good neighbor.
CNYOG hopes to start construction soon and finish by July, but it awaits permits from Pennsylvania environmental regulators and the U.S. Army Corps of Engineers.
It also needs to answer the legal challenge from residents.
Many of the complaining landowners say they favor natural gas drilling and some have leased land to gas drillers. What rankles them is that FERC has invested CNYOG with the power of eminent domain, taking away their bargaining power.*
One landowner reports the company used strong-arm tactics when they came to talk:
Amy Gardner said a company representative who made them the lowball offer told them to "take it or leave it."
"There’s no negotiating with this company. They come and they tell you what they’re going to do. They’re telling you what they’re going to pay. And they’re counting on the government to enforce it," Gardner said in a recent interview at the Sullivan County Courthouse, where a judge has scheduled a mid-February hearing on the landowners’ concerns.
…the company had prepared condemnation papers for dozens of properties even before winning commission approval on Nov. 14. Within a few days, it began eminent domain proceedings against 74 of 152 property owners along the pipeline’s route through the mountains of Bradford, Lycoming and Sullivan counties.*
*Biloxi-Gulfport Sun Herald/AP (Jan 31, 2012) – Landowners fight eminent domain in Pa. gas field