Eminent Domain Report

The Federal Energy Regulatory Commission (FERC) recently issued a Notice of Inquiry seeking input on whether to adjust its policies and procedures for reviewing and issuing authorizations for natural gas transportation facilities.  FERC is specifically considering whether it should modify (i) its methodology for determining whether there is a need for a proposed project, (ii) its consideration of the use of eminent domain and landowner interests, and (iii) its evaluation of environmental impacts.  FERC is also considering whether there are ways to improve the efficiency and effectiveness of its approval process.

The Notice of Inquiry was likely issued in response to President Trump's issuance of Executive Order 13807, which seeks to ensure that the Federal environmental review and permitting process for infrastructure projects is coordinated, predictable, and transparent.  The consideration is timely given that FERC's policies describing the criteria and steps used to balance a proposed natural gas pipeline's public benefits against its potential adverse consequences have not been substantially revised in nearly 20 years.  FERC's proceeding could lead to significant changes to the approval process for new projects, and numerous environmental groups have already submitted a joint letter requesting the adoption of expansive revisions.

As it pertains to the use of eminent domain, under consideration is whether a different standard of review should apply to projects that do not intend to use condemnation to acquire right-of-way.  Additionally, FERC is asking whether project applicants should take additional steps to minimize the use of eminent domain, and if so, what should those steps entail and how would it affect proposed route alignments and overall project costs?  Moreover, how should project applicants proceed when they cannot access portions of the right-of-way to conduct environmental analysis?  Finally, are there additional ways in which FERC should take into consideration landowner interests to encourage property owner participation in the review process?

This is an important comment period for all those involved in the gas transmission industry or property owners who may be impacted by such projects.  We'll follow this closely to see what changes FERC decides to pursue in its review process for natural gas pipeline projects.