litigation update: energy and mineral law foundation midstream assets conference
TRANSCRIPT
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What’s happening?
Development in Utica +Marcellus
shale plays
Pipeline + Processing Capacity
Hurdles to meet capacity
demands
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Tradition
Government/Agents appropriate private
property for public use
Government/Agents to compensate
Trend
Non-Government appropriate private
property for public use
Non-Government to compensate
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Robinson Twp. v. Commonwealth, 96 A.3d 1104 (Pa. Commw. 2014)
Peregrine Keystone Gas Pipeline, LLCPennsylvania Public Utilities Commission No. A-2010-2200201, Recommendation Decision
(May 3, 2012)
Tex. Eastern Transmission, LP v. 3.2 Acres Permanent Easement,S.D. Ohio No. 2:14-cv-2650,
2015 U.S. Dist. LEXIS 3252 (Jan. 12, 2015)
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Constitutionality of Pennsylvania Oil and Gas Act (“Act 13”) conferring eminent domain
power upon corporations engaged in transport, sale or storage of natural gas
Key Points
Act 13 vests the eminent domain power in corporations
that transport, sell, or store natural gas to or for the
public
Robinson Twp.
ISSUE:
26 Pa. C.S. 204(a) is inapplicable
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Standard to be certified as “public utility” under Public Utility Code
Key PointsA company’s
operations must be determined by what it
is actually doing, rather than what it
states it will do
Peregrine
ISSUE:
Affiliated companies cannot be defined as "the public," and the intent to provide service
for others, as long as it is convenient for the provider, is
not service for the public
Granting Peregrine’s application was not necessary for the service, accommodation, convenience or
safety of the public
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Authority to condemn properties pursuant to the Natural Gas Act after obtaining FERC
Certificate
Key Points
Despite efforts, Texas Eastern was unable to acquire the property by contract so the
use of the property was necessary to comply with the certificate issued by FERC
Texas Eastern satisfied necessary requirements sufficient to have the right to condemn the
properties
Tex. Eastern
ISSUE:
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EQT Gathering, LLC v. Tract of Prop. Situated in Knott Cty.
970 F. Supp 2d 655 (E.D. Ky. 2013)
Kentuckians United to Restrain Eminent Domain, Inc. v. Bluegrass
Pipeline Co. No. 12-CI-1402 (Franklin Cir. Ct. March 25, 2014)
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Authority to condemn property via being in “public service” + engaging
in good faith efforts for land purchase
Key Points
Transportation of natural gas by a common carrier is in the
“public service”
EQT possessed authority but genuine issue exists regarding
good faith negotiations
EQT Gathering
ISSUE:
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Eminent domain authority to condemn property for the installation of natural
gas liquids (“NGLs”) pipelines
Key Points
Only utilities regulated by the Public Service Commission
possessed condemnation power under Kentucky law
KURED
ISSUE:
Transporting NGLs is NOT “public service” as transporting “oil or
natural gas”
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Tenn. Gas Pipeline Co. v. Permanent Easement for 1.7320 Acres,
M.D. Penn. No 3:CV-11-028, 2014 U.S. Dist. LEXIS 23895 (Feb. 24, 2014)
Rockies Express Pipeline, LLC v. 4.895 Acres of Land,
734 F.3d 424, 2013 FED App. 0233P (6th Cir. 2013)
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Compensation owed by for the taking of right-of-way
Key Points
To determine just compensation, federal
substantive law applies where “private condemnorsunder the Natural Gas Act
operate on a national scale with federally approved
pipelines”
Partial Takings Compensation Measurement = M.V. of entire holding immediately before the taking – remaining M.V.
immediately thereafter of the portion of property rights
Tenn. Gas Pipeline
ISSUE:
LO entitled to compensation for physically appropriated property AND
diminution in value to non-condemned property “if the value of the remaining land, on a unit basis, diminished when the condemned parcel is removed from
the larger whole”
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Compensable damages from taking
Key Points
Rockies Express
ISSUE:
A FERC certificate holder has
eminent domain authority
Under Ohio law, a property owner is entitled the value of the land taken and the damages to the residue of
the property
No damages existed as Rockies
only sought to condemn the surface estate
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ISSUES: Unlawful exclusionPreemption
Markwest Liberty Midstream
Key Points
Natural gas compressor stations not excluded in every zoning
district
Local ordinance not preempted by state law
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Texas Eastern Transmission, LP v. 3.2 Acres Permanent Easement, S.D. Ohio No. 2:14-cv-2650,
2015 U.S. Dist. LEXIS 3252 (January 12, 2015)
Texas Eastern Transmission, LP v. Barack, S.D. Ohio No. 2:14-cv-336 (April 10, 2014)
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Northern long-eared bat
KEY POINTS
Compliance with environmental requirements may impact entire
project
Courts have the inherent power to grant immediate possession
through the issuance of preliminary injunction
Tex. v. 3.2 Acres
ISSUE:
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More bats
Key Points
Where substantial irreparable harm would result, temporary
restraining order and preliminary injunction may be granted
Where delay in conducting business would severely impact
company’s FERC application, immediate possession may be
granted
Barack
ISSUE:
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Stay InformedMargeaux KimbroughKegler Brown Hill + [email protected]/kimbrough614.462.5437
@MargeauxEsq
linkedin.com/in/mkimbrough