PIPELINE TAKINGS – TIME TO RECONSIDER THEIR POWER OF EMINENT DOMAIN

If you monitor eminent domain issues on a national level, you must be aware that by far the greatest controversy has focused on pipeline takings.

The United States has the largest network of energy pipelines in the world, generally accepted to be 2.5 million miles, more recently, because of fracking, massive new pipeline building has been taking place.  Most of those lines are for oil.  Some states make a distinction between oil and gas pipelines.  Gas pipelines would not have the federal statutory priority and would be subject to state law.

The first line of defense is a challenge on environmental grounds.  An example is the Keystone XL Pipeline, a proposed pipeline extension to transport crude from Canada to the Gulf of Mexico.  The second is political.  Political opposition by the public can be more successful than any litigation.

As we previously noted in this blog on September 13, 2016,

An estimated 8,000 people from 150 different Native American tribes in the U.S. and Canada have come together to stop the Dakota Access Oil Pipeline.  They have been joined by many more people concerned by the environmental threat and the abuse of eminent domain.

          The 1,172 mile long pipeline has an estimated cost of $3.7 billion and will pump nearly a half a million gallons of light crude from the Bakken Shale in North Dakota across South Dakota and Iowa to its terminus in Pakota, Illinois.

          The Standing Rock Sioux, a tribe living close to the proposed pipeline, and environmentalists have argued that the project could pose a threat to the local water supply.

          The Standing Rock Sioux argued in the lawsuit they commenced in that the pipeline crosses under a section of the Missouri River which is a source of water for the tribe.  The tribe also alleges that the pipeline poses a threat to sacred lands.

          The lawsuit sought a temporary restraining order from the U.S. District Court for the District of Columbia.  The request was denied, but a surprise announcement from the U.S. government revealed an override of the Court’s decision.  A joint statement from the Department of Justice, the Department of the Interior and the U.S. Army Corps of Engineers read, “Construction of the pipeline on Army Corps land bordering or under Lake Oahe will not go forward at this time.”  The environmental and cultural concerns raised by the Standing Rock Sioux will be more thoroughly addressed.

          Political action has also obtained some success in obtaining modification of pipeline eminent domain power.  South Carolina approved a bill that bans private for-profit pipeline companies to condemn lands during the next three years.

Some authorities have questioned whether pipelines should have power of eminent domain in the first place.  Ilya Somin, who on June 7, 2016, in The Volokn Conspiracy published in the Washington Post, wrote “in my view, some pipeline condemnations do not meet the Fifth Amendment’s requirement that eminent domain can only be used to take property for a ‘public use.’  Many pipelines are ‘common carriers’ required to allow the entire public to use their facilities.  But, as explained in (my) book, in many cases the common carrier requirement is either ignored or only given lip service.”  The question is whether a pipeline which is a profitable business should be able to take land in a state where the product will merely pass through to the end terminus.  There seems little in it for the state and even less for the property owner whose property will be taken.

A property owner whose land is acquired will have a complicated appraisal.  The taking may be in fee or an easement.  It will be a partial taking requiring a before and after valuation.  What is the impact of the taking on the remainder?  How does the taking effect the highest and best use of the remainder which is not limited to actual use on the date of the taking?  In addition, there is the very real consequential damages occasioned by the direct taking for a pipeline.  According to published statistics (Pipeline and Hazardous Material Safety Administration), there have been 4,269 pipeline incidents since 2010; 64 of them involved fatal injuries.  There is a factual basis for the public’s perception of danger from the proximity of a pipeline which will affect the market value of the remainder.

Posted in Partial Takings, Pipeline Takings
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