Property Rights: Easy to Condemn

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Source: Mike Benard

The traditional interpretation of eminent domain is shifting.  It is supposed to be the "taking of property or property rights under the badge of government for the public good"; based on just compensation.

Speaking as someone actually fighting eminent domain in federal court with Houston-based Spectra Energy, I can confirm that, nowadays, eminent domain has less to do with projects for the "public good," and everything to do with the financial good of publicly-held companies.

Today, eminent domain means someone wants your property, and the government helps them take it.

In  Bedford County, Pennsylvania (about 2 hours from Washington D.C., Spectra Energy is seizing property rights for an underground natural gas storage project that will boost the company's profits.  It is backed in this legal theft by the Federal Energy Regulatory Commission (FERC)

The "public good" argument is that this is an energy project – hence Spectra Energy deserves to “take” the property rights.  (Spectra Energy will bring natural gas from somewhere else for a fee, store it under the landowners’ property for a fee, then send it to the northeast states via pipelines for a fee.)

Absent from this purpose is the fact that the landowners' property is sitting on top of the gas-rich Marcellus Shale; but landowners can't develop it because Spectra Energy will use the Oriskany Sands formation (which lies just beneath the Marcellus) for its 12 billion cubic feet underground natural gas storage facility.  In other words, the storage project will prevent the exploration and potential recovery of gas from other underground layers. 

Spectra Energy and FERC say this underground storage facility is critical, even though Pennsylvania has more underground natural gas storage sites than any other state in the continental US, according to the Energy Information Administration of the US Department of Energy.

In FERC and Spectra Energy’s view, storing gas is deemed more important than property owners’ ability to explore the recovery of new gas for our nation’s energy independence.

Since the property rights have been seized under the badge of government, the principle of “just compensation,” is a platitude in this case because Spectra Energy filed a motion asking that the federal judge exclude evidence that would argue "economic loss to the landowner" for fear that the jury would be "confused, misled and distracted ... waste time."

In addition, Spectra Energy asked that the judge issue an order "... precluding defendant landowners from offering any evidence at trial of their alleged interests in the possible future development of natural gas reserves in the Marcellus Shale formation and other formations above or below the Oriskany Sandstone formation, and excluding defendant landowners from cross-examining plaintiffs' valuation experts regarding their omissions of such matters from their own appraisals of value."

Here is the great conundrum in eminent domain: property owners possess the key asset that companies and government covet – the land.  But they are treated as an obstacle in this process rather than as key stakeholders.

Most citizens in this country are property owners and their property is a substantial portion of the economic value they possess.  In a poll taken last year by the National Constitution Center, 88% of those polled said "property rights are just as important as freedom of speech and religion." 

Fighting for property rights is an uphill battle, but the grassroots are rising in communities across the country and many states are considering amendments to their state constitution to protect property rights. 

For information including a landowner video link to:

http://www.spectraenergywatch.com/blog/

Mike Benard is a speaker, writer and coach on communications issues.  As a seasoned communicator, he speaks on the transformation of the news industry, ethics and property rights.  Mike is a former VP of Communications & Public Affairs at Kodak.  He retired from Kodak in 2006.  He can be contacted at  mpbenard@mac.com

 

 

 

 

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