When a power company tried to run cables over land owned by Larry Salois’s mother near Cut Bank, Montana, the native American fought the US$400-million project.
He lost when the state passed a law forcing him to sell a right-of-way. Typical of U.S. property battles sparked by the quest for energy security, Tonbridge Power Inc. said it needed the most direct path for its electric line to wind farms, even though it would run across land holding a historical icon.
“They were going to put it right through the middle of a teepee ring,” said his attorney, Hertha Lund of Bozeman. The cluster of stones marked a foundation for ancient settlements left behind by the Plains and other Indians. They’re an irreplaceable cultural heritage to many native Americans.
With the gas industry estimating that 450,000 miles of pipelines need to be built in the next 25 years, a distance to the moon and almost back to earth, conflicts will multiply over eminent domain, or the legal power to condemn private property.
Land owners increasingly are pit against private businesses in state legislatures and courts as the U.S. confronts the new transmission lines, pipelines and compressor stations needed to reduce oil imports and produce clean energy at home. Lines between pro-green energy Democrats and pro-economic development Republicans can blur as farmers and ranchers object to being handed lease agreements and a pen, with little room to negotiate.
“Eminent domain is an emotional issue,” says Lund, whose client eventually settled. “Up here, it’s caused a real crossover in politics.”
A 2011 study conducted for the National Renewable Energy Laboratory estimates that between 17,000 and 22,000 miles of new transmission lines, plus the corridors to accommodate them, would be required for the eastern half of the U.S. alone if the nation were to provide 20% of its electricity with wind power by 2030.
In the oil and gas industry, much more land will be needed as pipelines are built to connect growing production from shale fields to refineries and markets. Just one facet of the network — long-haul natural gas pipelines — may grow by 23% by 2035, according to a report from the Interstate Natural Gas Association of America.
That much pipeline could require thousands of square miles for easements and right of way. The exact amount is unclear, since builders will follow existing routes and re-use old pipelines as much as possible, Don Santa, the trade group’s president, said in an interview.
Typically, pipeline companies negotiate 95% of right-of-way agreements, Santa said. About 5% require some type of court proceeding, in which the company invokes its eminent domain power and asks a court to set a fair price for the land it needs.
Because eminent domain laws vary from state to state, no central clearing house tracks the number of eminent domain cases.
Private companies have had eminent domain power since at least the 1800s. Most state and federal law allows private property to be taken for “common carriers,” meaning projects that serve the public by carrying power or providing transportation for all customers.
The U.S. Federal Energy Regulatory Commission holds hearings to determine the routes for interstate gas pipelines. Most other eminent domain disputes, including disputed interstate oil and liquids pipelines, are handled in local courts under state law.
Landowners have had little luck with direct challenges to eminent domain laws.
In 2011, the Texas Supreme Court ruled that Denbury Green Pipeline, a Plano, Texas company, had overstepped the law when it used eminent domain to acquire a right-of-way for a carbon dioxide pipeline across the land of Texas Rice Land Partners in Beaumont.
The farm’s owners argued that the pipeline, though it crossed from Texas to Louisiana and received permits from Texas regulators, was not a common carrier because only Denbury would be served by it. The court ruled that Denbury needed to do more to prove it was a common carrier — including proving it was carrying carbon dioxide for third parties — and sent the case back to a lower court for more review.
Subsequently, Julia Trigg Crawford, a Paris, Texas farmer, argued that the Denbury ruling prevented TransCanada Corp.’s disputed Keystone XL oil pipeline from seizing a 50-foot right- of-way on her property. A judge determined that Keystone meets the Texas common carrier definition. Crawford is appealing that verdict.
Michael Bishop, a 64-year-old retired chemist, is also suing TransCanada in state court to keep Keystone off his 20- acre farm near the small town of Douglass, Texas. He contends he granted the company an original easement under duress and that TransCanada misrepresented the pipeline as a crude oil project when it primarily will transport liquefied Canadian bitumen, a form of thick crude oil, to Texas refineries.
The company denies his claims. A judge decided in January that Bishop’s bid to rescind the Keystone easement contract belonged in a different court and dismissed his case. Bishop vows to continue the litigation.
“I’ve told those Keystone people from the beginning, ‘I don’t like your bully tactics. I just want you to leave my homestead alone,’” Bishop said.
Article source: http://business.financialpost.com/2013/03/02/land-battles-rise-as-u-s-eyes-450000-miles-of-new-pipe/