On Friday, February 3, 2017, the Federal Energy Regulatory Commission (FERC) approved the Atlantic Sunrise natural gas pipeline which will run through portions of Pennsylvania. It is our understanding that the pipeline still requires the issuance of certain permits from the Department of Environmental Protection and the United States Army Corps. Based upon the most recent information issued by Williams, construction is expected to begin on the pipeline in the second quarter of 2017 with the pipeline going online in mid-2018. In light of this information, we anticipate that Williams may soon start to file eminent domain or condemnation actions against those property owners with whom Williams has not yet reached an agreement for the acquisition of the requested right-of-way.
In a filing issued on or about October 20, 2016, the Federal Energy Regulatory Commission (FERC) indicated that it would rule on the Atlantic Sunrise pipeline project no later than March 30, 2017. This delay apparently is due to the agency's consideration of a minor pipeline route change of approximately 1.4 miles in Lancaster County as well as consideration of potential air pollution impacts associated with the construction and operation of the necessary facilities for the pipeline project.
Recently, the Commonwealth Court of Pennsylvania issued a decision in a case arising from an appeal filed by a number of property owners in Cumberland County, Pennsylvania challenging Sunoco's status as a public utility and Mariner East 2's status as a public utility service. The property owners raised a number of arguments in support of their appeal which included:
Recently, we posted an article about a lawsuit which was filed against FERC by the Delaware Riverkeeper and the Delaware Riverkeeper Network which alleged, among other things, that FERC has not rejected any pipeline plans submitted to it for review. However, more recently, on March 11, 2016, FERC issued an Order denying the application for a Certificate in connection with the Jordan Cove Energy Project in Coos County, Oregon. The project had proposed to site, construct and operate a Liquefied Natural Gas (LNG) export terminal and associated facilities. In the decision letter, FERC indicated that the project developer had failed to demonstrate a need for the pipeline as the developers had not signed any formal contracts to sell the gas it intended to move to the Asian markets. Further, the developers had failed to negotiate easements with 95% of the property owners along the 232 mile pipeline.
Sunoco Logistic Partners has announced that the Mariner East I Pipeline is now carrying both ethane and propane from the Washington County shale fields to the Marcus Hook Industrial Complex in Delaware County. Sunoco also announced that the first tanker carrying ethane to Europe departed from Marcus Hook on March 9, 2016.
We recently received information that a law suit has been filed against the Federal Energy Regulatory Commission (FERC) by the Delaware Riverkeeper Network and the Delaware Riverkeeper in the United States District Court for the District of Columbia challenging FERC's relationship with the pipeline industry. Based upon information set forth within the Complaint, it is alleged that FERC receives funding from the industry which it regulates thereby creating a bias. The Plaintiffs also allege that FERC has a 100% approval rate on pipelines. Through this suit, the Plaintiffs are seeking to have FERC's reimbursement mechanism in the Omnibus Reconciliation Act of 1986 declared unconstitutional and/or a declaration that FERC's power to grant pipeline projects the power of eminent domain is unconstitutional and that the ability of FERC to pre-empt local and state laws is unconstitutional. Additionally, the suit also seeks a declaration that the procedure utilized by FERC to issue Certificates of Convenience and Necessity relative to the PennEast Pipeline and the other projects within the Delaware River Basin deprives the Plaintiffs of due process.
On February 5, 2016, Judge Carpenter of the Court of Common Pleas of Philadelphia County issued a Decision in The Clean Air Council, et al. v. Sunoco Pipeline LP matter. The matter arose from a Petition for Preliminary Injunction and a Complaint filed by the Clean Air Council and some local property owners challenging the Mariner East II pipeline. In September 2015, Sunoco filed Preliminary Objections in response to that Complaint claiming that Plaintiffs lacked the standing to bring suit and that the court lacked jurisdiction for a number of reasons including, but not limited to, that the action was barred by the Eminent Domain Code and must be brought before the Public Utility Commission. Following briefs and argument, Judge Carpenter issued a Decision. The most significant part of the Decision is that Judge Carpenter overruled the bulk of Sunoco's Preliminary Objections which included the rejection of Sunoco's arguments that the Plaintiffs lacked standing to bring the suit and that the Court lacks jurisdiction to hear these claims.
On February 17, 2016, Lavery Law attorneys Sunshine J. Thomas and Peter J. Carfley presented at the Pennsylvania Bar Institute ("PBI") Eminent Domain Seminar in Pittsburgh, Pennsylvania. Additionally, Sunshine and Peter also presented at the same seminar in Mechanicsburg, Pennsylvania on February 24, 2016. The conference was entitled "The Legal Issues Surrounding Pipeline and Right-of-Way Agreements in the Marcellus Shale Region" with Sunshine and Peter presenting the section on "The Legal Issues Surrounding Pipeline and Right-Of-Way Agreements in the Marcellus Shale Region". Sunshine spoke about the eminent domain condemnation process, the steps that a pipeline company must follow in order to initiate the process, and the defenses available to property owners. Pete spoke about valuation and the Board of View process.
The Pipeline Task Force held its final meeting last week. With that completed, it is now anticipated that the Task Force's report will be delivered to Governor Wolf soon. That report is expected to consist of over 180 recommendations regarding how to prepare for and manage the impact of pipelines within Pennsylvania. It is believed that some of the Task Force's recommendations will include, among other things, increased training for state regulators and emergency responders, creating state level coordination and infrastructure systems and suggestions on how to minimize environmental impacts. Other areas likely to be addressed by the report include agriculture, conservation and natural resources, historical and cultural resources, public participation, and economic development.
As new and additional pipeline projects are undertaken in Pennsylvania, many property owners are being confronted with a situation with which they have little to no prior experience. This often takes the form of a pipeline company representative approaching the property owner seeking to purchase an easement across the property owner's land. During this process, the land agents will often claim that the pipeline will have no or only a minimal impact on the property and its value. We caution property owners to be wary of these statements and representations. Experience has reflected that pipelines can impact property values in a number of ways. One possible way is that a pipeline can lower the fair market value of a property. In some cases, the pipeline can have a significant impact on the property's value. Second, the pipeline can limit the property owner in utilizing the property in the future. By way of example, if the easement were to cut through the center of a vacant lot, it may render the lot no longer usable for development. In addition, if a pipeline runs through the center of a back yard, it may prevent the property owner from adding an addition to an existing residence and/or installing a pool. Third, pipelines can potentially limit the number of individuals who may be willing to purchase the property in the future. On this basis, we suggest that property owners carefully consider any offer which is made to them by a pipeline company before accepting the offer.