Two Sierra Club lawyers on eminent domain, oil spill laws, and what you can do if a natural gas company shows up in your neighborhood
Image by Andrew Lichtenstein
On December 4, 2016, the Army Corps of Engineers stunned the world when they announced they would prepare an Environmental Impact Statement for the $3.8 billion Dakota Access Pipeline (DAPL), a proposed 1,172-mile oil pipeline crossing four states. The pipeline would bulldoze sacred sites at the Standing Rock Indian Reservation near Cannon Ball, North Dakota. After nearly a year of protests that mesmerized millions—complete with encampments of as many as 7,000 people in tents, teepees, and temporary housing—the tribal members and activists achieved something remarkable. As Amnesty International UK tweeted, it was “a monumental victory.”
Even so, the battle to reroute or simply suspend the pipeline is far from over. And one wonders how the situation ever became so extreme—to the point where water protectors were shot with water cannons in below-freezing weather, attacked by security dogs, and ordered to evacuate—that more than 500 people were arrested. Nighttime temperatures plummeted even further, but the protestors stayed. Why and how, as Bill Moyers asked, did Standing Rock come to symbolize so much more than one pipeline and one people? As a tribal member Kandi Mossett told Moyers: “‘They told us, ‘You are crazy. It is a done deal.’ They told us that about the Keystone XL and they are telling us that now about Dakota Access, that it is a done deal. We respectfully disagree.”
After yesterday’s news that a pipeline rupture spilled 176,000 gallons of oil into a creek about 150 miles from the Standing Rock protest site, it’s particularly crucial to note that other communities are struggling against pipelines—such as the $3.2 billion Sabal Trail Pipeline in the southeast and the Trans-Pecos Pipeline in the Big Bend region of Texas. Lawsuits against pipelines are underway around the country. How did the battle get so pitched? What are the legal issues? What rights do landowners have? And what can you do if a pipeline company shows up in your neighborhood?
Here, two experienced Sierra Club attorneys explain the basics anyone interested in pipeline issues should know. Doug Hayes, based in the Sierra Club’s Boulder, Colorado, office, worked for nearly seven years to stop the Keystone XL pipeline, which was finally rejected by President Obama on November 6, 2015. He is now a key attorney working to prevent DAPL. Diana Csank, who works in the Sierra Club’s Washington, D.C., office, has been involved in cases against numerous pipelines, from Pennsylvania to Florida. Get their take on the different regulations for gas versus oil pipelines, important legal issues at the forefront of pipeline battles now, and what ordinary citizens can do to help protest pipelines.
Many people wonder how it can be legal for a pipeline company to seize private property by invoking eminent domain. What exactly is eminent domain and where does the concept come from? Let’s start with oil. Doug, can you tell us what eminent domain means in terms of oil pipelines?
Hayes: The concept of eminent domain appears in the last clause of the Fifth Amendment of the Constitution, which states: “Nor shall private property be taken for public use, without just compensation.” Public use is the key here. Generally, property owners control their property. The exception, established here in the Constitution, is taking property for public use, even without the owner’s consent. That is eminent domain. Of course, it is controversial. Courts have decided to allow the use of eminent domain for power lines, sidewalks, roads, parks, schools and highways, where there is a clear use by the public and communities adjacent to the project.
But over the years, the concept of ‘public use’ has evolved, and eminent domain has been granted for pipelines. Typically, the pipeline company first seeks to purchase an easement from the landowner, allowing the company to use the property to run their pipeline, while the owner still owns the land and pays taxes on it. If the owner refuses to sell that easement, then the company will sue the landowner and invoke eminent domain to seize the property, often paying below market value. Today, cross-state pipelines can travel thousands of miles, and almost inevitably they will cross private property.
[quote position="right" is_quote="true"]It’s important to note that there are alarming rates of pipeline spills—around 200 oil pipeline spills a year.[/quote]
Many of these new pipeline projects transport oil or gas destined for the coasts, and from there for export abroad. For instance, with the Keystone XL Pipeline, crude oil was to be piped through the middle of the country down to the Gulf Coast for export to Asian markets. Farmers and ranchers in states like Nebraska and the Dakotas were going to lose their land to a foreign corporation and there was really no demonstrated public need or use.
Pipelines are regulated differently, depending on what will be flowing through them. For instance, the Natural Gas Act assigns oversight of gas pipelines to the Federal Energy Regulatory Commission (FERC), leaving the states relatively little authority over these projects. On the other hand, there is no comparable federal statute governing oil pipelines, meaning the states play a larger role regulating use of eminent domain. Now states are starting to recognize that pipeline companies may try to use eminent domain solely for private gain, and that does not meet the constitutional requirements. There have been several state court rulings recently denying pipeline companies eminent domain power. In West Virginia, for instance, the state supreme court ruled that because a proposed pipeline would transport gas entirely out of state with no benefit to any in-state customers, there was no clear ‘public benefit,’ so they ruled the company could not go and survey properties for that purpose. A similar result was reached in Kentucky.
In the case of DAPL, there are four different states the pipeline crosses—North Dakota, South Dakota, Iowa, and Illinois—until it meets up with other existing pipelines. Landowners brought a lawsuit in Iowa, and Sierra Club has done so as well. Those lawsuits are being consolidated, and there will be a court hearing on December 15.
It’s also important to note that there are alarming rates of pipeline spills—around 200 oil pipeline spills a year. And though the majority of pipeline leak detection systems are touted as state of the art, the vast majority of the ruptures for both oil and gas are reported by the public. The emergency detection systems are actually weak.
How significant is the recent Army Corps decision not to grant the easement at Standing Rock?
Hayes: It was an incredible decision that the Army Corps made after finally listening to the tribe and their allies. But it’s not over. The Army Corps did not deny the final easement process. It’s still pending. They agreed to an environmental impact assessment and to look at alternative routes. I’m encouraged going forward, but there’s still a long way to go before this is over.
Image by Scott Olson
Diana, how does the battle against gas pipelines differ from oil?
Csank: The main difference is the federal government’s role at the outset. Before pipelines go into the ground to transport gas across state lines, they need certificates from FERC. There is no equivalent for oil pipelines.
The federal government does perform some preconstruction reviews of domestic oil pipelines—but these are spotty. One agency looks only at water crossings, another looks only at public land crossings, yet another looks only at federally protected species. No public official fully evaluates these massive projects, not at the federal level, nor at the state level. That’s the rub. Without a proper record, courts have trouble applying the constitutional test of public use—and we now have cases badly decided extending eminent domain to pipelines.
[quote position="left" is_quote="true"]Big monopoly power companies across the country have been buying up pipeline companies because there are tremendous profits to be made.[/quote]
Turning to gas pipelines, the same is true, despite the mandate for FERC to evaluate projects as a whole. FERC does not investigate these pipelines with enough rigor. That’s why you have industry openly acknowledging that gas pipelines will be overbuilt. Many of these projects are not necessary.
Yet we often have FERC saying ‘Ok, you have everything you need to start construction.’ FERC has only denied one gas pipeline in recent memory (there is no official count). But by federal law, FERC is not supposed to allow construction to proceed until the agency fully understands the implications of these projects, which cut across land and water and sensitive ecosystems. People are rightly concerned when pipelines come to their community, because wherever pipelines extend, deadly accidents and explosions have followed.
However, FERC’s reviews are falling short on public safety, the environment, and economics. In 1999, FERC adopted a new policy—still in use with minor amendments—to look at open-ended ‘indicators of public benefit,’ leaving market studies to industry and even making them optional. FERC has stated that there is ‘no reason for an applicant to do a new market study of its own in every instance.’ That is stunning. It allows massively destructive projects to go forward based on poorly supported industry assertions.
The scale of the pipeline build-out is overwhelming. I work across the East Coast, and Pennsylvania stands out as a place where the pipeline industry is trying to literally quadruple the number of pipelines in that state. The entire fracked-gas infrastructure is huge, with the pipelines, the wells, the power plants.
I understand that there are monopoly issues emerging with some of the pipelines. Can you explain that?
Csank: Yes, we are now seeing serious conflicts of interest concerns raised around gas pipelines and the big monopoly power companies that are backing them. Big monopoly power companies across the country have captive customer bases, and in recent years these companies have been pouring billions of dollars into mergers and acquisitions. They have been buying up pipeline companies because there are tremendous profits to be made. But if they are building the pipelines and buying the gas, essentially shaking hands with themselves at the expense of the ratepayer, there is a conflict of interest. FERC takes that contract for gas as evidence that the pipeline is needed, but it isn’t necessarily so.
[quote position="right" is_quote="true"]Connect to others and organize. Don’t be swayed by company bullying.[/quote]
We recently filed a complaint against Michigan’s largest electric utility, DTE Electric Company, which is pushing a 250-mile, multibillion-dollar gas pipeline project owned by its affiliate, NEXUS Gas Transmission, LLC. While these corporations stand to make huge profits, their captive customers would foot the bill—through electric rate hikes. Michigan is not alone.
What can a landowner do when the pipeline company comes knocking at their door?
Csank: Connect to others and organize. Don’t be swayed by company bullying. A lot of Nebraska landowners organized to successfully challenge Keystone XL. Just because a company is confident that (it) will obtain permission to use eminent domain, doesn’t mean they have the right to come onto your property without that permission. Numerous pipelines have been rejected recently. Those include the St. Clair River Pipeline in Michigan; the Constitution Pipeline from Pennsylvania to New York; the Northeast Energy Direct Pipeline, which would have crossed several northeastern states; the Takoma methanol terminal in Washington; and others. (See this blog by Lena Moffitt, Director of the Sierra Club's Dirty Fuels campaign, for more information). Regulators will often reference whether or not a company has been able to obtain easements from landowners or whether they will have to use eminent domain when assessing a project’s viability. If enough landowners say no, it can help decrease the likelihood the project will go forward.
Csank: As soon as you know a pipeline is headed in your direction, seek legal advice. Build a coalition. Find other landowners who are at risk, and share information. Form collective power. Reach out to other stakeholders, whoever they may be. That could include local businesses, elected officials, environmental and community organizers, waterkeepers and riverkeepers, the local Sierra Club office. Coordinate your efforts. That can be really powerful.