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.
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.
Based upon information recently issued by PennEast Pipeline Company, LLC, it appears that the project is moving forward and that PennEast has or may soon start approaching property owners in an effort to secure the necessary easements for the project. The PennEast pipeline is reported to be slightly over 100 miles of 36 inch diameter pipe which will run from Luzerne County, Pennsylvania to Mercer County, New Jersey carrying natural gas. PennEast has indicated that pipeline construction would likely begin as soon as all required permits and approvals are secured from FERC with a targeted completion date in late 2017. In light of this information, we expect that property owners in the impacted areas will likely soon start to receive communications from PennEast representatives, if they have not already. These initial contacts are usually either in the form of a home visit or a telephone call and are generally for the purpose of either securing an easement or taking the preliminary steps towards filing a condemnation proceeding.
A new lawsuit was filed last week in the Philadelphia County Court of Common Pleas by the Clean Air Council and a number of residents of Delaware County claiming that Sunoco is not a public utility as it pertains to the Mariner East II pipeline and does not have the power of eminent domain. As of the date of this entry, Sunoco has not filed a formal response to the lawsuit. We will post further updates as additional information becomes known by our office.
During a recent public meeting, Sunoco released information about a possible plan for a third pipeline. As many are aware, Sunoco has been utilizing a pipeline which was placed into service in the mid 1930's. More recently, Sunoco started the process to construct a second pipeline referred to as Mariner East II. Sunoco is still in the process of acquiring the necessary right of ways for the Mariner East II Project. During the recent meeting, however, Sunoco advised that they are considering building two parallel pipelines as part of the Mariner East II Project while the original plans only contemplated one line as part of the project. That second line is the third line which is presently under consideration. Based on the most recent information of which we are aware, the third pipeline is not yet confirmed. Rather, Sunoco advised that, as of the meeting, they were still in the process of determining whether they have sufficient commitments to warrant the installation of the third line. Nevertheless, as a third pipeline is a possibility, we caution property owners to be cognizant of the easement and right of way terms proposed to them by Sunoco. The terms of the easement agreement will dictate whether any additional compensation is due or required if the additional line is sought or placed.