Earlier this week, the Energy & Commerce Committee Democrats released a discussion draft of their 622-page climate energy bill (the Climate Leadership and Environmental Action for our Nation’s Future Act, or the CLEAN Future Act). By amending the relevant provision of the Natural Gas Act (NGA), section 216 of the CLEAN Future Act eliminates the use of eminent domain by interstate natural gas pipelines.
In the ordinary course, I’d be pleased by this. We believe that it is a fundamental matter of justice that government should forcibly take private property only as a measure of last resort, when truly for public use, and must compensate the property owners sufficiently to render them indifferent to the taking. And, unfortunately, using eminent domain for natural gas pipelines meet none of these criteria.
However, section 216 does not simply repeal the NGA’s eminent domain provision. Instead, it provides that a pipeline may not exercise eminent domain, until it (1) gets all the other necessary permits for building and operating the pipeline, and (2) “complies with all environmental conditions appended to the certificate order.” The certificate is the order issued by the Federal Energy Regulatory Commission (FERC) which grants permission to build and operate an interstate pipeline.
The first requirement—getting all the other necessary permits—is a good idea; preventing someone from taking your property, cutting down all the trees on a 150’-wide swathe, digging the 10’ deep trench for the pipeline, and then not being able to build the pipeline because other permits have been denied is a welcome recognition that this precise situation has occurred. Without such a change, it will occur more frequently in the future as states take a serious look at the consequences of building a pipeline and realize that they don’t pass muster for any one of a number of economic, safety, or environmental reasons. Or, as New Jersey recently did, decide not to allow the PennEast pipeline to cross state land, which effectively killed the pipeline (pending a Supreme Court appeal that the Court may or may not choose to hear).
However, section 216’s second requirement—not allowing the use of eminent domain until all environmental conditions are met—is too restrictive. This provision surreptitiously ends the use of eminent domain, because those environmental conditions apply to both the completion of construction and then operation of the pipeline. And, by definition, a condition governing pipeline operation cannot be satisfied until the pipeline is built and put into service. Ergo, no more eminent domain.
For example, Environmental Condition No. 10 in the Certificate for the Mountain Valley Pipeline provides that before FERC gives the go-ahead for the pipeline to start operating, it must determine, “that rehabilitation and restoration of areas affected by the projects are proceeding satisfactorily.” Obviously FERC cannot give such go-ahead until the pipeline has been completed (and has identified all such areas and done the required rehabilitation), and the pipeline cannot say that this rehabilitation—including on land taken by eminent domain—is “proceeding satisfactorily” when that has not even started on land that they have not yet acquired.
If that seems a little convoluted, simply look at Conditions 39 and 40, which expressly state that these conditions—concerning noise levels at the compressor stations that power the pipeline— “shall be addressed during operation of facilities.” To satisfy that condition, a pipeline developer would have to operate a pipeline that had been built without using eminent domain.
Such conditions exist in all pipeline Certificates. If the E&C Democrats want to eliminate pipeline eminent domain under the Natural Gas Act, then say so. Or, if they want to ensure that the pipeline may not use eminent domain unless it is compliance with all conditions applicable at that point, they could say that instead. But as it stands, section 216 appears to be either a mistake or a surreptitious attempt to eliminate eminent domain without saying that is its purpose, and no one should be happy with such legislative tactics.