The increase in oil prices has been a boom for natural gas suppliers as many property owners convert from oil to natural gas. To meet demand and extend service, gas companies are installing new pipelines throughout New Jersey and, in most cases, the pipelines are being installed on private property. When a gas company like Transco knocks on your door to inquire about placing a pipeline on your property, you need to understand your legal rights and what the pipeline company can, and cannot do.
First, pipeline projects are generally not performed by your local municipality, but a pipeline company. Gas companies can obtain the power of eminent domain to take property in order to install and construct pipelines, but they first must jump through certain hoops to obtain that power. Those laws are beyond the scope of this article.
Second, the majority of the eminent domain cases involving pipelines are "partial takings". A partial taking usually involves the acquisition of an easement which allows the gas company to not only construct an underground pipeline on your property, but gives the company the right to come back on your property for repairs to the pipeline. Also, the easement will generally restrict what a property owner can do with his or her property in the easement area. For example, the easement may prohibit the property owner from building a pool or structure in the easement area, or possibly limiting the type of tree that can be planted in the easement area.
Third, partial takings are much more complicated then complete takings since the damage analysis is often very complicated. Under New Jersey law, the pipeline company must pay fair compensation for (1) the value of the property actually taken, and (2) any damage to the remainder of the property owned by the homeowner. The damage to the remainder often requires a detailed analysis of potential future uses and how those uses are restricted by the pipeline.
Finally, in some cases a property owner may prefer to have the gas company’s pipeline take their entire property so they can move to a new location. In order for a property owner to force the pipeline to acquire the entire parcel, the property owner must proceed under the Uneconomic Remnant Doctrine– a difficult task.
Stark & Stark’s Eminent Domain Group has represented many property owners in gas pipeline cases and can help protect your rights.