Eminent Domain revolt scuttles pipeline — Virginia next?

Fearing they will lose part of their land through condemnation to make way for a petroleum pipeline, farmers and other landowners in South Carolina and Georgia have prevailed on their respective state legislatures to approve bills that put the project on hold indefinitely.

 At the center of the debate over the proposed Palmetto Pipeline was Houston-based pipeline developer Kinder Morgan’s intent to use eminent domain to acquire private land for the project.  As envisioned by Kinder Morgan, the $1 billion, 360-mile-long Palmetto Pipeline would run southeast from Belton, South Carolina into Georgia then due south to Jacksonville, Florida.  The pipeline would transport gasoline, diesel, and even corn ethanol to markets in Augusta and Savannah and on to Jacksonville.

 While many landowners and communities in the path of the project didn’t object to the pipeline per se, the threat of eminent domain sparked fierce resistance.  Under eminent domain, landowners in the pipeline’s path would lose the right to choose to sell or lease their land. They would be forced to accept Kinder Morgan’s “offer,” which would be in the form of a nominal, one-time payment, regardless of their personal desires for their property. This payment would not even cover the annual taxes on the land for the life of the pipeline let alone the impact to property value. Although property owners would retain ownership of the land on paper, they would lose the right to build on it or to restrict Kinder Morgan from re-leasing it to other pipeline or utility projects against the landowner’s wishes.

 South Carolina

 Eminent domain was also the driving force that brought the Palmetto Pipeline to a screeching halt in the Palmetto State.  Kinder Morgan, a major energy and pipeline company, repeatedly emphasized that it didn’t wish to condemn anyone’s land for the project, saying it hoped to reach amicable agreements with landowners.  But the threat of eminent domain wipes out any bargaining power a landowner has and those landowner’s who simply wish to keep the family farm intact or preserve the forests on their land have no power to refuse. The uproar united landowners, local businesses, and community groups as well as Republicans and Democrats in the state legislature.

 South Carolina’s laws governing how for-profit companies can use eminent domain are murky, so lawmakers coalesced around the idea of putting the project on hold while studying ways to bring legal clarity to the situation.  By overwhelming majorities – 53-1 in the Senate and 165–2 in the House — , legislation was approved that prohibits private, for-profit oil pipeline companies from using eminent domain in the state for the next three years.   During that moratorium, lawmakers will study the issue and decide whether to re-write the law or extend the ban.  The new law does not, however, cover natural-gas pipelines which have, since the 1960s, been treated as “public utilities” regardless of the ownership and economic benefits of the pipeline.

 Rep. Bill Hixon, an Aiken County Republican who supported the bill, said he had received numerous complaints from property owners about the prospect of eminent domain.  “Anything that better protects people’s property rights is a good thing,” he told The State (March 30).  “Kinder Morgan probably did us a favor by alerting us to what is going on and giving us a chance to sit back and look at our laws.”  

 Georgia

 Under Georgia law, companies seeking to build petroleum pipelines in the state must apply for a “certificate of need” (essentially, a document outlining how the state will benefit economically from the project) from the state Department of Transportation (DOT) and a permit from Georgia’s Department of Environmental Protection.   Kinder Morgan, or any other pipeline developer, can’t use eminent domain unless Georgia’s DOT gives its approval. Transportation Commissioner Russell McMurry refused to give such permission, because, he argued, the “need” described by the developer was both speculative in nature and more properly described as potential “benefits.” Russell’s decision was upheld by a state judge.  

 Meanwhile, the tide of public opinion turned against Kinder Morgan.  Some 200 miles of the pipeline would pass through Georgia, crossing five rivers and parcels owned by hundreds of landowners.  This spring, Georgia’s legislature approved legislation barring Kinder Morgan from seizing land against the owner’s wishes until at least July 2017.  The new law establishes a 15-member citizens’ commission to study laws and policies for granting eminent domain for petroleum pipelines.  

 “Kinder Morgan has suspended work on the Palmetto Pipeline project, following the unfavorable action by the Georgia legislature regarding eminent-domain authority and permitting restrictions for petroleum pipelines,” the company said on its website.    

 House Energy, Utilities & Telecommunications Chairman Don Parsons (R-Marietta) was careful to clarify that opposition to eminent domain is not the same as opposition to pipeline infrastructure.  “It’s going to be necessary to have more pipeline distribution in this country,” he told the Savannah Morning News (March 15). But such infrastructure should not be built at the expense of private property rights and the rights of our citizens.

 Virginia?

 Eminent domain forces landowners and businesses to sell or lease all or part of their property against their will and under the guise of a “market” payment determined by the buyer. This explains the outrage in Georgia and South Carolina that led to legislation that scuttled the Palmetto Pipeline.  In Virginia, a similar groundswell of opposition is emerging against using eminent domain on private land to construct the Atlantic Coast Pipeline (ACP).  The proposed $5 billion, 560-mile-long ACP would transport natural gas from West Virginia through central Virginia and into North Carolina.  Led by Richmond-based Dominion Resources, the ACP’s developers have said they will use eminent domain to get the land they need to construct the pipeline.

 According to Dominion, roughly 2,700 landowners could be directly affected by the proposed pipeline.  Once the final path of the ACP has been determined, landowners, through whose property the pipeline would run, will have to watch a 300’ swath of trees and terrain cut to dig the trench for the pipe, and then cope with a 75-foot “right of way” on which nothing can be built and nothing but small plants could grow; a bitter pill for any landowner who now owns a parcel that may be worthless in the market and disturb or destroy their personal homestead. 

Unlike the Palmetto Pipeline, the ACP would transport natural gas across state lines, which puts it under the jurisdiction of the Federal Energy Regulatory Commission (FERC).  It is FERC that will ultimately decide the fate of the pipeline, a verdict that is expected to be rendered in early 2017. The predominant federal role in interstate natural gas pipelines means that Virginia’s General Assembly can’t replicate what was done in by its counterparts in Georgia and South Carolina, but it can take a stand in favor of the constituents it represents.

This leaves Virginia landowners in dire need of protection against the abuse of well- intentioned eminent domain laws and gross federal overreach that contradicts the Virginia constitution. What Kinder Morgan was prepared to do in South Carolina and Georgia is no different from what Dominion is threatening to do in Virginia.  

As a Virginia Corporate Citizen – Dominion Should Take the Pledge:

No Eminent Domain on Private Land

Having a state-of-the-art energy infrastructure, including oil and gas pipelines, is essential to maintaining our prosperity.   But this doesn’t have to come at the expense of landowners. The use of eminent domain for shareholder gain is a repugnant abuse of power.  Dominion and its partners can use existing right of ways to minimize the project’s impact on farmers and other property owners.  Having already agreed to re-route the ACP to protect endangered species on Forest Service land, Dominion could just as easily show the same consideration to private citizens and their property rights in the pipeline’s path.  If we cannot choose to whom and for what price to sell our property – do we really own it or anything at all? Quite simply – even if the pipeline provides jobs, economic opportunity, lower gas bills (all of which have been hotly disputed) should I have the right to take my neighbors’ land so I can enjoy those benefits? Of course not. It sounds just as absurd as it actually is and it is truly this simple a question.

 Dominion should pledge that it will NOT use eminent domain on private land. Anything less demonstrates the willingness to abuse private citizens to line their shareholders’ pockets. 

 Will Dominion sign that pledge?

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About the Author: Bonner Cohen, Ph. D.

Bonner Cohen, Ph. D.

Bonner R. Cohen, Ph. D., is a senior policy analyst with CFACT.

About the Author: Richard Averitt

Richard Averitt is CEO of the technology company Digital ReLab and a full-time resident of Nelson County. He is Executive Director of Americans for Personal Property, Energy, and Landowners (APPEAL), www.notaking.org.