What is the status of the PennEast Pipeline project?

With the recent confirmation of two new commissioners, a quorum has been restored in the Federal Energy Regulatory Commission (FERC). This likely means that FERC will soon begin addressing the approval of natural gas pipeline projects, including the PennEast Pipeline.

The PennEast Pipeline project received its final environmental impact statement from FERC in April 2017.

In the next step in the approval process, FERC will decide whether to issue a Certificate of Public Convenience and Necessity under Section 7 of the federal Natural Gas Act. Once a Certificate is issued, as is probable, FERC will convey the power of eminent domain to the PennEast Pipeline project owners. PennEast will then use the power of eminent domain to take private property to construct the pipeline along a right-of-way approved by FERC.

What is eminent domain?

Eminent Domain is the power of the government to take private property and convert it into public use. Condemnation is the process used to exercise the power of eminent domain. The Fifth Amendment requires that the government provide just compensation to the property owners if it takes property through eminent domain. This means if the government wants your land for public use, it must buy it from you at fair market rates. Usually, the government will try to buy your property before going through the condemnation process. The landowner’s consent is not required for the government to take property for public use.

PennEast is not a government agency – so how can it take my land?

Certain private companies and projects are granted the right to acquire property by eminent domain, including railroads, energy companies, and natural resource companies. If the PennEast Pipeline project receives a Certificate of Public Convenience and Necessity, the government will grant PennEast the ability to use eminent domain to enable it to take the property of private landowners to build its pipeline.

Once PennEast gets a Certificate of Public Convenience and Necessity from FERC, can PennEast come on my property and conduct surveys or tests?

Absolutely not. PennEast must either have the landowner’s consent to come on the property or a Court order.

How will PennEast proceed with taking my land through eminent domain?

Once PennEast obtains the Certificate of Public Convenience and Necessity, PennEast may attempt to negotiate the amount of “just compensation” to be paid with the landowners, or proceed immediately with filing a complaint in the United States District Court seeking a court order for possession of the property and confirming PennEast’s right to take property. Since PennEast needs to gain access to property to complete surveys and studies, it is likely that PennEast will immediately file suit.

Will I be penalized if I choose not to negotiate and force PennEast to go to court?

No. You have a right to contest the taking of your property and what PennEast must pay for your property.

Can I stop PennEast from taking my property?

  • You can challenge FERC’s decision to issue the Certificate of Public Convenience and Necessity by first seeking a rehearing before FERC, followed by an appeal to the United States Court of Appeals. Some groups, like the Sierra Club, have succeeded in challenging the issuance of a FERC Certificate.
  • You can oppose the taking when PennEast files its lawsuit against you to take your property. Many traditional defenses under state law are not applicable to pipeline cases that fall within the jurisdiction of FERC.
  • You can contact the New Jersey Department of Environmental Protection and the Delaware River Basin Commission and voice your objection to the pipeline and describe the harm to you and your property. Although this is not a direct challenge to the right to take your property, PennEast cannot put a shovel in the ground and start construction until certain approvals are obtained from these two agencies. If approvals are not obtained and the pipeline is never built, property owners may be able to convince the Court to vacate the orders approving the taking of their property.

If PennEast prevails and the court determines it is authorized to exercise the power of eminent domain – you can continue to negotiate the amount of compensation to be paid. If no agreement is reached, the court will either hold a trial or appoint three commissioners to a panel to determine the amount of compensation. A trail or hearing will be held and evidence will be presented.

Do I need a lawyer? Can’t I just negotiate with PennEast on my own?

You can negotiate on your own, but, depending on your knowledge of eminent domain, it is probably advisable to have an attorney from the beginning this complicated process. PennEast is just a buyer in a real estate transaction–it is trying to get the most value at the lowest price — and it has all of the power in the negotiation. Anything you say or any information you reveal in the process may be used to decrease the value of your property. If you are not aware of all of the compensation options and all of your rights, you may not be able to prevent the condemnation or receive the most money for your property that is taken. PennEast not obligated to look out for the property owner’s best interest; it only has to make sure you are “fairly” compensated. Keep in mind that fair compensation could be at the bottom of market rates. A lawyer that is experienced in eminent domain can help you get the best price and ensure you are compensated to the full extent of the law and your rights.

Stark & Stark’s condemnation and eminent domain attorneys have substantial experience litigating the government’s right to take private property including negotiating and litigating gas pipeline cases. The Condemnation & Eminent Domain Group has extensive experience in real estate valuation and works closely with outside professionals such as appraisers, engineers and planners in order to present compelling expert testimony to the jury or judge.