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Commonwealth Pipeline Coming Through Chester County?

By: William J. Burke, III

A new interstate natural gas pipeline may be coming through Chester County, Pennsylvania to transport natural gas out of northern Pennsylvania.

The Commonwealth Pipeline (http://www.commonwealthpipeline.com) is in the planning stages and may pass through several Northern Chester County Townships on its way from Lycoming County to Berks County and beyond.  While neither the pipeline itself nor its route are certainties, some landowners have reportedly been notified their properties may be within its proposed path, and they have been asked to allow surveys on their land.

This pipeline would be an interstate transportation line that connects to similar pipelines, including the newly-constructed MARC I HUB line that ends in Lycoming County.  The company that developed the MARC I line is one of the participants in the Commonwealth line.

Interstate gas pipelines are regulated by FERC, the Federal Energy Regulatory Commission, which is given its authority by the federal Natural Gas Act.  At this time, no application has been filed with FERC for the Commonwealth Pipeline.

If approved by FERC, Commonwealth Pipeline would have the power of eminent domain (orcondemnation) to acquire the right to build its pipeline over privately owned land—if it cannot first be obtained through negotiations with landowners.  And the pipeline company will use that power if necessary, although it will almost certainly attempt to negotiate amicably before doing so.

Affected landowners have the right to participate in and be heard in the FERC proceedings, as it reviews the proposal.  FERC offers information for affected landowners on their website
http://www.ferc.gov/for-citizens/citizen-guides/citz-guide-gas.pdf
One thing is certain—regardless of one’s opinion about natural gas development, no one wants a pipeline on their land, even if they will be paid for it.
So what can potentially affected landowners do?

Stay informed.  Attend meetings.

Participate in groups that provide meaningful information about the project.  And, if desired, join groups that will oppose the project, or aspects of it that may be especially threatening to environmentally sensitive areas, but only if they do so in a productive and professional manner.

And, seek legal advice—sooner rather than later.

Should you let the pipeline company on your property to survey?  There are pros and cons to this.  To be sure, the initial reaction of many will be “absolutely not,” but allowing the company to enter and survey (under appropriate protective agreements) will not affect the ultimate likelihood that the pipelines will be built.  Rather, allowing the survey may provide an owner with key information about where the line would actually be located, and how much land it would affect.

If the project is approved, then landowners will be asked to grant easements, which will give the pipeline company the right to use portions of the land for the pipes.  Based on our experience, the pipeline itself will likely require permanent easements of approximately 50’ in width, with additional temporary work areas along its length of 25’-50’, depending on topography.  Some property owners may be asked to grant additional temporary work areas, as well as temporary or even permanent access.

Compensation will be paid, and is a key part of negotiations, but is by no means the only important topic to address. Other areas will include protection and restoration of the property generally, as well as dealing with issues that are peculiar to a specific property or its use.

Compensation for damages may and likely will vary widely from property to property.  Most (if not all) landowners will be well advised to get an appraisal to assist in ascertaining and negotiating damages.

If satisfactory compensation cannot be amicably negotiated, then seeking damages through the eminent domain process may be necessary.

Landowners should also be mindful that their mortgage lenders may require them to use some or all of the proceeds from the pipeline easements to pay down their mortgages.

This, too, is a negotiation point.

In addition, some affected properties are likely subject to conservation easements. Conservation easements almost always require a certain percentage of the eminent domain proceeds to be paid to the Conservancy (in fact, where easements are donated and a tax deduction is taken, such provisions are required by the tax laws). And some conservation easements will give the Conservancy the right to oppose the pipeline easement, and may allow it to recover its legal fees and other expenses from the proceeds.  Regardless of how any proceeds may be divided, owners of property subject to conservation easements absolutely must communicate with the Conservancy that holds the easement throughout the process to ensure they do not violate the conservation easement and to promote a cooperative and coordinated approach to deal with the pipeline project.

Finally, some affected properties may be open space held by Homeowners’ Associations, which pose their own unique issues.

Our experience with these easements  indicates that achieving the best possible outcome requires that landowners (1) become and stay informed, (2) maintain open and businesslike lines of communication with the pipeline company,  the owner’s lender, conservancy and others involved in the process,  (3) seek competent valuation and legal advice, and (4) set realistic goals and expectations.

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