Archive | Natural Gas

Update: Sunoco/Mariner East Not a Public Utility

The Pennsylvania Public Utility Commission has initially rejected the Sunoco/ Mariner East effort to be found to be a public utility. Thus, Sunoco must comply with local zoning and Sunoco does not obtain the power of eminent domain. The decision is a significant victory for Pennsylvania property owners.

Independent judges: Sunoco Logistics pipeline can’t bypass local zoning laws
By: Katie Colaneri
July 30, 2014

Sunoco Logistics can’t bypass local zoning laws to develop its natural gas liquids pipeline project known as Mariner East. That’s the word from a pair of independent administrative law judges for the state’s Public Utility Commission, or PUC.

Sunoco Logistics wants to build 31 pump and valve stations to keep natural gas liquids flowing along the pipeline’s 300-mile route from western Pennsylvania to Marcus Hook. For months, the company has attempted to make the case – to local residents and to the PUC – that it is a public utility corporation, and that the pipeline itself offers a public utility service.

The judges dismissed that claim, resulting in a win for residents who have teamed up with environmental groups to fight the project.

“We’re happy that it proves what we’ve been saying all along,” said Tom Casey, the head of a citizens’ advocacy group in Chester County.

However, Casey, a resident of West Goshen Township, could not officially declare victory.

The case will ultimately be decided by the five-member Public Utility Commission. A PUC spokeswoman said the commission can accept, reject or modify the judges’ decision. Regardless of the outcome, the parties in the case can appeal to the state’s Commonwealth Court.

Jeff Shields, a spokesman for Sunoco Logistics, said the company believes the PUC will “continue to recognize that the proposed Mariner East service will result in numerous public benefits.”

PUC Chairman Robert Powelson was formerly the member of a group of key industry players and business leaders promoting energy projects in the Philadelphia region, leading some advocates to question his objectivity in the Sunoco Logistics case.

In May, Powelson stepped down from the group, he said, “to avoid even the appearance of bias.” Lynda Farrel, executive director of the Chester County-based Pipeline Safety Coalition, believes Powelson should recuse himself from the Mariner East vote. “Removing himself from the energy [team] was a passive way of admitting that he does have a bias,” she said.

When asked by StateImpact Pennsylvania previously, Powelson said he was not sure whether he would recuse himself, and that he was able to do his job by looking at the facts. A PUC spokeswoman said the parties in the case will have through the end of August to file exceptions and replies if they disagree with the judges’ ruling. It is not clear when the five commissioners will take up the issue.

The Mariner East pipeline would bring natural gas liquids developed in western Pennsylvania for delivery to local propane markets and to supply a demand for ethane overseas.

Correction: Sunoco Logistics plans to build 31 pump and valve stations for the Mariner East pipeline, not 18.

Commonwealth Pipeline Project Postponed

The following was posted on the Commonwealth Pipeline website: ( The sponsors of Commonwealth Pipeline have suspended development of the project.  We will be updating the website periodically to provide current information regarding the project’s status.  Thank you for your continued interest and patience. 

The following is some background information on this project posted in The Mercury by Sara Mosqueda-Fernandez, posted on April 18, 2013

The proposed 120-mile-long Commonwealth Pipeline project, scheduled to run from Lycoming County to pipelines in southeastern Pennsylvania, has been suspended indefinitely. The announcement was posted on the project’s website,   .

According to earlier presentations, the pipeline was expected to travel through North Coventry, South Coventry, Warwick and West Vincent townships. The 30-inch pipeline would also cross at least four “exceptional value” streams throughout the northern part of Chester County, including French Creek and Rock Run Creek, on the way to a compression station in Upper Uwchlan. Other affected areas would include the Hopewell Big Woods, French Creek State Park, Warwick County Park, Ryerss’ Farm for Aged Equines and Ludwig’s Corner.

Part of the pipeline would also be interred next to the Weatherstone development, which hosts 270 homes, a library and an elementary school.

While representatives for the project had reached out to municipalities to discuss the proposed project, the next step, pre-filing with the Federal Energy Regulatory Commission, was not taken prior to the project’s suspension.

The pipeline was supported by three major partners: Inergy Midstream LP, which develops and operates natural gas and natural gas liquids storage and transportation; UGI Energy Services Inc., which owns 14.7 billion cubic feet of underground natural gas storage in north central Pennsylvania and is developing projects throughout the Marcellus Shale area; and WGL Holdings Inc., a natural gas utility and marketing firm.

Lynda Farrell, executive director of the Pipeline Safety Coalition, a nonprofit that seeks to inform the public about pipeline issues, said she was informed by a representative of Inergy that while some basic routes for the project were explored, there are no detailed routing plans and there is currently no further route work.

A project representative, who asked to remain unnamed, said the suspension was because the market for the proposed pipeline has not been developed.

The project garnered significant attention from both residents and elected officials. Both the Chester County Board of Commissioners and State Rep. Tim Hennessey, R-26th, of North Coventry, wrote letters to the Federal Energy Regulatory Commission, asking that the potential harm to the Big Woods be given serious consideration.

“The Big Woods are an ecological marvel of significant scientific research value as it currently exists,” said the letter. “While we realize that all development comes at a cost, it seems to us that the harm to the Big Woods is simply too steep a cost to pay.”

A date for the resumption of pipeline planning has not been announced.

Commonwealth Pipeline

A recent Patriot News publication titled Here It Comes described the anticipated natural
gas pipeline planned to run from Lycoming County, PA, to Rockville, MD.

The article touted the anticipated lower energy prices in Central Pennsylvania. However,
other unfavorable aspects of the process are also coming to Central Pennsylvania.
The article repeatedly quoted Bill Moler, the Chief Operating Officer of the responsible
company, Inergy Midstream. He described the company’s approach of paying for
property damages in a manner in which the various owners along the route would receive
the same amount of money per foot of the right-of-way acquisition. Unfortunately, this
plan and approach to property rights is in direct conflict with the controlling Pennsylvania
law, the Pennsylvania Eminent Domain Code.

The correct approach to damages, which may be much more costly to Inergy Midstream,
is to pay eminent damages based on the fair market value of the entire property interest
before and after a condemnation. The proper approach would suggest that a peaceful
residential property would have much more significant monetary damages than a vacant
property. Property owners would be wisely cautious in dealing with a company which
seeks to avoid paying fairly for the acquisition of property rights.

Commonwealth Pipeline Plan

This post is in response to the article by Donald Gilliland which appeared in The Patriot-News: UGI’s ‘Commonwealth Pipeline’ would spread shale wealth through Pennsylvania

The planned Commonwealth Pipeline, recently announced, would bring natural gas from Lycoming County through central Pennsylvania to the Baltimore and Washington markets. It would also bring the threat of eminent domain to property owners in central Pennsylvania. Land agents for oil and gas companies recognize that they have an obligation to negotiate with property owners, but do not have any obligation of good faith negotiations. Property owners would be wise to be wary of negotiators on behalf of company designated to build and operate the pipeline – Inergy Mid-stream. That company recently proceeded with eminent domain actions against property owners in the path of the 39-mile MARC1 pipeline in northern Pennsylvania. The company used documentation of appraisals of the strips of land in negotiations and Sullivan County court filings. Those efforts and documents are in conflict with the Pennsylvania Eminent Domain Code protections whereby property owners are protected by the property damage calculation defined as the entire property interest before the taking as compared to the entire property interest after the taking. That approach will need to be considered for the property owners to adequately protect themselves and their constitutional right to just compensation.


Natural Gas Pipeline in Sullivan County, PA

The firm’s predecessor recently began representation of multiple property owners whose land was condemned by an out of state company building a natural gas pipeline in the marcellus shale play in Northern Pennsylvania. Our firm argued in Sullivan County that the security was inadequate, based on Central New York Oil & Gas appraisal documents description of what is known as a “strip” appraisal. The Pennsylvania Eminent Domain Code requires before and after appraisals of the owners’ entire property interest.

Just Compensation in PA Eminent Domain

The following was an editorial posted in The Patriot News by Amanda M. Olejarski. The editorial raises legitimate concerns about the use of eminent domain by private companies. The natural gas pipeline in Lycoming, Sullivan and Bradford Counties is now under construction as authorized by the Federal Energy Regulatory Comission. Property owners should be aware that the out of state oil and gas company has no obligation of good faith negotiations or fair dealings.

In fact, the condemnor submitted to the Sullivan County court misleading appraisal documents which valued only the strips of land condemned. Fortunately, the Eminent Domain Code provides protection for property owners to be paid just compensation based on the reduced value of the entire property interest. The reprehensible tactics of the condemnor compels property owners to obtain the constitutionally guaranteed just compensation.

Eminent domain? It’s an imminent problem for Pennsylvania

Published: Friday, February 24, 2012,  5:00 AM
By Amanda M. Olejarski

“Eminent domain” is probably the most- feared phrase that a property owner can hear — besides, of course, foreclosure. But what is eminent domain? It’s also known as a “taking” because eminent domain is the governmental power to take private property.

gas pipeline.JPG
Some natural gas pipeline companies are applying for eminent domain status in Pennsylvania.

The U.S. Constitution limits the takings power in the Fifth Amendment: “Nor shall private property be taken for public use, without just compensation.” Here’s the problem: “Public use” hasn’t meant use for a long time. As far back as 1896, the Supreme Court ruled that public use doesn’t mean that the public can use the property after it’s been taken by eminent domain.

Fast-forward to 2005 when the Supreme Court ruled that economic development met the public use requirement of the Constitution in the “Kelo case.” This was the landmark case in which the city of New London, Conn., used eminent domain, in part, to construct a research facility for Pfizer after it came out with Viagra.

For all of the opportunities (and potential problems) that Marcellus Shale brings to Pennsylvania residents, eminent domain is being overlooked. It’s an imminent problem for property owners in the Keystone State. Presently, much of the focus is on laying pipes to transport the shale gas across the state and beyond. Last month, a story surfaced up in Laporte (100 miles north of Harrisburg) about a pipeline operator using eminent domain to gain access, or easement, to 150 properties in Bradford, Lycoming and Sullivan counties.

In Pennsylvania, Title 26 of the state code allows public utility companies to use eminent domain. Public utility companies can then delegate the takings power to pipeline operators. Yes, you read that correctly: Private pipeline operators can be granted the governmental power of eminent domain.

This is just the beginning of a slippery slope. Once those two magic words, “eminent domain,” are said, everyone’s hands are tied. The entity initiating takings proceedings, the pipeline operator, must pay just compensation. Just compensation is based on the market value of the property. But the property owner’s hands are tied, too, because the only recourse is a legal appeal. The bottom line is when eminent domain is invoked, negotiations outside of the court system are over. This is the real problem with the shale gas in Pennsylvania.

It’s a slippery slope to allow partial takings that don’t affect the property owner’s ability to enjoy the full range of benefits of the property, such as in Laporte. Residents there aren’t so much fighting the easement to put in the pipeline, they are fighting for their ability to negotiate in good faith on the compensation they would be paid.

But what’s coming down the slope is allowing complete takings of private property. Negotiating compensation between the property owner and the government (or pipeline operators) is the first step. No one wants to use eminent domain unless property owners aren’t negotiating in good faith. That’s why the government has the power of eminent domain — to ensure that public projects move forward, even when property owners hold out.

Eminent domain is how states and local governments build roads, bridges and schools. It can be an effective tool for governments to use to improve communities. But there is a problem when eminent domain is given to private pipeline operators and other entities in Pennsylvania without governmental protection and oversight.

Private firms aren’t accountable to the public, and citizens can’t vote them out of office. State and local governments are managed by elected officials and professional public administrators whose first responsibility is upholding the public interest. None of that exists with private organizations whose first responsibility is upholding profit.

Eminent domain is a powerful tool — with great power comes great responsibility. Our government is responsible for protecting its property owners.

Amanda M. Olejarski is an assistant professor of public administration at Shippensburg University.