New Investigation Shows Pipelines Always Get Their Way With FERC

Photo: Greta Cross, News Tribune

The Federal Energy Regulatory Commission (FERC) sides with pipeline companies over private landowners in 99% of the cases when landowners refuse to grant a company permission to bury a pipeline on their land.  FERC has granted these companies “eminent domain” to “take” the private land over 1000 times and denied the companies only 6 times in the last 20 years, according to a Congressional report released yesterday.  Worse, if a landowner appeals the decision, the agency has been dragging its feet for months, thereby effectively blocking landowners from going to court to stop the company, so that by the time FERC hears the appeal, it’s too late because the company has already laid the pipe.

Why This Matters:  The FERC’s stilted process may soon end. In addition to Congressional oversight, a federal appeals court is considering whether to disallow FERC from blocking landowners taking their cases to court right away, before ground is broken.  FERC recently committed to landowners that it would hear appeals within 30 days — but given their track record, that promise is not worth much. And President Trump has stacked FERC with Republicans and refused to appoint Democrats to the Commission even though it is supposed to be politically balanced.  

Why Do Pipelines Always Win?

The Natural Gas Act, which governs the process for pipelines being built, favored pipeline development as a way to bring energy to many parts of the country.  Under the law, if FERC approves a pipeline, the company can use eminent domain to seize private land to build the pipeline.  But the law (and the Constitution) requires the landowners a right to appeal the FERC decision granting the pipeline, and FERC is supposed to respond in 30 days. If FERC denies the landowners’ appeal or does not respond in time, then the landowner can go to court to try to stop the company from taking their land.  But to get around the 30-day requirement, FERC has been granting a rehearing “for the limited purposes of reconsideration,” that allows FERC to delay action on addressing petitions but it doesn’t delay a pipeline company’s approval for the project.  So they start digging and then by the time FERC actually takes up the appeal, the pipeline is in the ground and operating.

A challenge to this practice was heard in federal court last December, and one of the judges described the injustice of the FERC delays as “a Kafkaesque regime. Under it, the Commission can keep homeowners in seemingly endless administrative limbo while energy companies plow ahead seizing land and constructing the very pipeline that the procedurally handcuffed homeowners seek to stop.” This week the full court of appeals heard the same case, and the full panel may strike down the FERC practice.

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