Blog

Eminent Domain

Published in May, 2017

Trump’s rural voters fighting to keep their land from a growing web of pipelines

BY STUART LEAVENWORTH

sleavenworth@mcclatchydc.com

WEST CHESTER, PA. 

Norm MacQueen would seem to fit the profile of a property owner comfortable with an oil and gas pipeline running through his land. A retired oil refinery employee, MacQueen worked amid risky conditions for more than 20 years, as a pipe fitter and a welder.

But early last year, MacQueen learned that an oil company, Sunoco, was planning to install two more pipelines past his family’s home in eastern Pennsylvania, where one already runs. According to MacQueen, Sunoco’s agents told him the company will force his neighbors and him to sell the rights to some of their land – through a process called eminent domain – if they don’t agree to turn it over.

“These oil companies have so much power,” fumed MacQueen, standing in his yard on a recent weekday. “They think they can do anything they want.”

Eminent domain is often used by governments to gain right-of-way for projects such as highways or government buildings. But state and federal regulators who authorize pipeline projects also typically grant the private companies that are building them the right to use eminent domain to secure needed right-of-way.

That means rural and suburban landowners from Pennsylvania to the Dakotas are finding it increasingly difficult to combat an ever-growing network of pipelines that companies are racing to build to accommodate the prodigious amounts of oil and natural gas that fracking is producing.

MacQueen, who voted for President Donald Trump, says he has no problem with the need for pipelines. His beef is with what he calls the industry’s “bullying tactics” and its mixed safety record. He and others describe a process in which agents pressure them to sign easement agreements and then threaten court action if they don’t agree to the offered terms.

“People used to be surprised, and now they are just angry,” said Lynda Farrell, who heads a Pennsylvania group called the Pipeline Safety Coalition that advises landowners affected by pipeline projects. “They are angry at their legislators. They are angry at the powers that be that allow this to happen.”

Those “powers that be” might include Trump, an unapologetic user of eminent domain as a private developer who owes his election in no small way to the owners of the farms and yards these pipelines would run through. Trump wooed rural voters by pledging to be attentive to their concerns, but one of his first acts as president was to expedite the Dakota Access and Keystone XL pipelines, both of which have employed eminent domain to secure needed land.

And the White House is squarely on the side of pipelines. For the last three months, Trump’s aides have been reviewing proposals to help expedite various infrastructure projects nationwide. Unions and industry groups have provided the White House with their favored proposals, which include pipeline projects in Pennsylvania, Virginia, North Carolina and other states, according to documents obtained by McClatchy.

Tens of thousands of landowners could soon find themselves in the paths of new pipelines. As of 2016, more than 34,000 miles of new oil and gas pipelines were in the planning stages, according to Pipeline and Gas Journal, an industry trade publication. Many are being spurred by the rich deposits of gas in the Marcellus shale region of West Virginia, Pennsylvania and Ohio.

Lawmakers in some states are pushing back. Georgia and South Carolina recently passed laws banning private companies from using eminent domain for oil pipelines. Both states were taking aim at a project by the Kinder Morgan pipeline company – suspended after Georgia’s law was signed – that would have carried gasoline and diesel fuel from South Carolina to Florida.

Eminent domain has become an issue in the Virginia governor’s race, where the five leading candidates are split over the $5 billion Atlantic Coast Pipeline, a joint venture of Dominion Resources and Duke Energy that would ship natural gas from West Virginia to North Carolina. Two of the candidates – one Democrat and one Republican – have come out against the use of eminent domain for the project.

GOP politicians face a particular conundrum with pipeline proposals. For years, the tea party and other GOP allies have campaigned to end what they call government “takings” of private property for economic development. Republicans were highly critical of a 2005 U.S. Supreme Court decision – known as the Kelo case – that allowed local governments to use eminent domain if it served a “public purpose” or “public benefit.”

But Republicans are also big supporters of energy interests. In Pennsylvania, Texas, the Dakotas and many other states, the fracking industry and pipelines are seen as major job creators, supported by business groups and construction unions.

Ilya Somin, a property rights expert and law professor at George Mason University in Virginia, said that some in both parties had been less than consistent in supporting property rights when energy projects were involved. But the passage of the Georgia and South Carolina laws, he said, shows that a bipartisan coalition is emerging on the issue, making unlikely allies out of environmentalists and tea party activists.

“Pipeline takings are starting to get much more attention,” said Somin. “It is not my view that all pipeline takings should be categorically banned. But they should be much more tightly constrained than they are now.”

Utilities and other pipeline developers gained the ability to use eminent domain during World War II, when oil and natural gas was needed to support the war effort and postwar industrialization. The authorization remained after the war ended. One of the earliest big interstate gas pipelines was financed by a group of wealthy Texans in 1949. The Transco pipeline now stretches from the Gulf of Mexico to New York and is owned by Williams Cos., an Oklahoma-based energy company.

Williams and other pipeline developers describe their projects as “the safest, most reliable and efficient manner of transporting energy products.” More than 15,000 miles of oil and gas pipelines crisscross the United States. Mishaps are rare, they argue.

Yet when a pipeline leaks or breaks, the results can be catastrophic. In 2010, eight people died when a Pacific Gas & Electric natural gas pipeline exploded in San Bruno, California. Last year, a man was seriously burned when a gas pipeline owned by a Texas company exploded in Salem Township, Pennsylvania, about 30 miles east of Pittsburgh.

Rural landowners often cite such accidents when asked about their pipeline resistance. “Sure, they tell us it is safe,” said Marvin Winstead, who owns a 70-acre farm in Nash County, North Carolina. “But if I put a gun down here and asked you to play Russian roulette, would you do it?”

SURE, THEY TELL US IT IS SAFE. BUT IF I PUT A GUN DOWN HERE AND ASKED YOU TO PLAY RUSSIAN ROULETTE, WOULD YOU DO IT?

Marvin Winstead, owner of a North Carolina farm that a gas pipeline is slated to cross

Like many of his neighbors, Winstead has been approached by land agents employed by Dominion, which is partnering with Duke Energy on the 600-mile Atlantic Coast Pipeline. So far, Winstead has refused to sign an easement agreement and is preparing for legal proceedings.

“If they take me to court and the judge rules in their favor, I won’t have any choice but to accept it,” he said. “But I am not going to swing open the gate at this time.”

To the south of Winstead’s farm, Barbara Exum also has been approached about signing an easement agreement for the pipeline. Along with safety concerns, she fears the easement could reduce the value of her property in Kenly, North Carolina, which includes her house and a 30-acre family farm.

“Before this, I knew all about eminent domain, but I never had any idea it could be used this way,” she said. “This is a private company, seeking private property.”

Not all landowners are resisting use of their land for pipelines. The Atlantic Coast Pipeline is expected to cross the farms and yards of some 2,900 property owners in Virginia and North Carolina. Over the last two years, nearly two-thirds of them have signed easement agreements, said Aaron Ruby, a spokesman for Dominion Resources. To highlight some satisfied landowners, the Virginia-based company has produced videos of them.

Ruby said there were two primary drivers of the project: abundant gas production in the Marcellus shale, but also regulatory demands that electric utilities retire their coal-fired power plants. The Atlantic Coast Pipeline will allow Dominion and Duke Energy to close several of these plants and replace them with cleaner gas-fired generation stations, he said. Some 80 percent will be used by utilities for electricity generation and the rest will go to natural gas utilities, to supply homes and businesses.

Aside from compensating landowners for the use of their property and construction disruptions, Dominion has made 300 adjustments to its planned route, Ruby said. “Eminent domain is always an absolute last resort,” he added. Such proceedings can occur only after the Federal Energy Regulatory Commission has issued a permit, or “certificate,” for the project, which the pipeline developers are expecting to receive by this fall.

EMINENT DOMAIN IS ALWAYS AN ABSOLUTE LAST RESORT.

spokesman for Dominion’s Atlantic Coast Pipeline

In Pennsylvania, seven major pipeline projects are under construction or regulatory review. One of the most controversial is the Mariner East 2, which would add two pipelines along the route of the Mariner East 1 pipeline in the southern part of the state.

Built in the 1930s, this pipeline formerly shipped petroleum east to west from Sunoco’s Marcus Hook refinery, near Pennsylvania’s border with Delaware. Sunoco briefly started idling the refinery in 2011. The next year, Energy Transfer Partners – the same company that’s building the Dakota Access pipeline – purchased Sunoco and soon came up with a novel way to repurpose the old pipeline.

Energy Transfer recognized that the Marcellus shale was producing a glut of what’s known as “natural gas liquids” – products such as propane, ethane and butane. It also knew there was a demand for these liquids in Europe, particularly among plastics manufacturers and gasoline refiners.

So the company re-engineered its pipeline to run west to east, and started transferring natural gas liquids to Marcus Hook, where they were being loaded into ships heading to Europe.

In Marcus Hook, town leaders are celebrating the project and the jobs it has created. But along the pipeline route, numerous landowners were surprised to learn that a different kind of product was running through their property. Many are just becoming aware that the company is planning to build two new pipelines along that same route, to ship more natural gas liquids overseas.

At a recent meeting in Chester County, Pennsylvania, along the pipeline route, more than 100 residents gathered to discuss safety concerns. Several speakers noted that the Mariner East 1 pipeline had been built in the 1930s, when the area had far fewer people. Now there will be two new pipelines, carrying explosive liquids, running within 50 feet of homes and a retirement community, and within a few hundred feet of schools.

“This thing was routed with nobody looking at the safety of the route,” said Seth Kovnat, an engineer who serves on the Pipeline Safety Advisory Committee for Middletown, one of the townships where the new pipelines would run.

Sunoco declined requests for a direct interview and would respond only to emailed questions. In an email, spokesman Jeffrey Shields said the company’s pipelines and safety checks went beyond federal safety requirements. “We exceed numerous safety requirements in regard to welding, pipeline monitoring, pump station design, integrity testing, release detection and emergency response,” he wrote.

Asked why the Sunoco pipeline should be considered a “public good” with authority to use eminent domain, Shields said the issue had already been addressed by the Pennsylvania Public Utility Commission, which determined that the Mariner East pipelines “provided a public utility.” Some propane shipped by the pipeline is used within Pennsylvania, although the bulk of the project’s liquids are shipped overseas.

Although Sunoco says it works to monitor leaks and avoid accidents, Norm MacQueen is dubious. In April of 2015, MacQueen noticed a strange smell wafting through his yard in Edgmont Township, Pennsylvania, where a Sunoco refined-products pipeline is buried. “It smelled like hydrocarbons,” he recalled.

MacQueen contacted Sunoco, and an hour or so later a crew arrived and confirmed the leak. They then brought in extra crews, made a temporary repair to the pipeline and later installed monitoring wells. “Their smart pig didn’t find the leak. I found it,” said MacQueen, referring to a device that pipeline companies use to inspect their lines.

A year later, Sunoco dispatched a land agent to inform MacQueen about the two new pipelines the company plans to build through his land. The agent, he said, said eminent domain was likely if MacQueen didn’t sign an easement agreement.

Not wanting to go to court, MacQueen and his wife eventually agreed to sign. He said he was far from comfortable with the outcome.

“This is a crazy situation,” he said. “I don’t feel too safe living here next to this line.”

Stuart Leavenworth: 202-383-6070, @sleavenworth