Oregon senators prepare bills to rein in eminent domain use for gas projects

Washington — Two Democratic Oregon US senators are readying legislation that would impose new constraints on the use of eminent domain for interstate natural gas projects, particularly those targeting exports.

The efforts come as Senators Jeff Merkley and Ron Wyden raised concerns about the proposed Jordan Cove LNG export project and the 229-mile Pacific Connector pipeline in Oregon. The projects won approval from the Federal Energy Regulatory Commission in March but still face permitting hurdles in Oregon as well as commercial headwinds.

Expected to be introduced in September, the bills would strengthen the hand of property owners faced with land condemnation along pipeline routes, and could slow some project reviews and construction timelines. The path forward the bills is uncertain, but they present a marker in the evolving debate over implementation of the Natural Gas Act and fairness for landowners.

Merkley's proposal would bar companies building export pipelines from using eminent domain claims, according to an Aug. 13 press release. It would also "affirm that the federal government lacks authority to allow companies to use eminent domain to seize state land for gas pipelines."

Pipeline companies are currently seeking US Supreme Court review of a 3rd Circuit Court of Appeals ruling that found PennEast Pipeline lacked authority to condemn lands in which New Jersey held an interest in federal courts.

Wyden bill

Wyden's upcoming legislation would end the legal presumption that gas exports are in the public interest, potentially adding to the review and evidence needed for export projects such as LNG terminals.

It also tackles a range of due process concerns raised by landowners. Notably, it would move pipelines' use of eminent domain to the back end of process, after additional state and federal permits are issued, appeals court review of projects is completed, and landowners have received compensation.

Wyden said the legislation would restore much-needed balance that defends landowners rights with due process.

"It's become painfully apparent in southern Oregon and far too many other places that private pipeline companies have repeatedly abused property owners by claiming eminent domain in the public interest, safe in the knowledge that FERC will provide them cover," Wyden said in a statement.

"If big pipeline corporations want to use land in Southern Oregon or across America, they should negotiate with the landowners for that right," Merkley said.

Wyden's bill also aims to allow parties such as landowners to get to court sooner. FERC would have to act on certificate rehearing orders within 60 days, or else petitions would be deemed denied, allowing parties such as landowners to seek judicial review.

Rescinding considered

Of relevance for Jordan Cove and Pacific Connector, the Wyden legislation raises the prospect of a certificate order being rescinded if its terms are not followed, a Senate aide said Aug. 18.

The proposal also would standardize procedures for notifying affected landowners within 15 days of an application and 15 days of certificate approval, and would call for full transparency of landowners' names and addresses to help ensure thorough notification.

The actions come as gas pipelines have faced a spate of litigation related to the justification for using eminent domain authority under the Natural Gas Act.

In addition, a recent DC Circuit Court ruling upended FERC's practice of putting off rehearing decisions on its pipeline approvals. The practice had drawn criticism for effectively allowing pipelines to head to federal court to seek use of eminent domain and to start construction, while landowners and others were not yet able to challenge FERC's authorizations in court.

In the House, Representatives Tom Malinowski, Democrat-New Jersey and Ann McLane Kuster, Democrat-New Hampshire, also have introduced legislation barring pipeline companies from exercising eminent domain while rehearing is pending, and giving FERC 60 days in which to decide on rehearing.