W.Va. landowners battle pipeline company over property rights

By Ellen M. Gilmer | 04/21/2015 08:00 AM EDT

A few hundred miles from the federal agency halls where protesters now routinely berate energy regulators for greenlighting pipeline projects, West Virginia landowners and litigators are testing a more fundamental level of opposition to the far-reaching expansion of America’s pipeline network.

A few hundred miles from the federal agency halls where protesters now routinely berate energy regulators for greenlighting pipeline projects, West Virginia landowners and litigators are testing a more fundamental level of opposition to the far-reaching expansion of America’s pipeline network.

Their approach isn’t necessarily environmental; they’re focused quite literally on what happens in their backyards — denying access to surveyors and planners who are trying to secure a route for the 300-mile Mountain Valley Pipeline, one of many projects designed to transport the glut of natural gas from the nation’s shale drilling boom.

EQT Corp. and NextEra Energy Inc., the main backers of the MVP project, say the pipeline is critical for moving natural gas from the Utica and Marcellus shale formations to markets in the Mid-Atlantic and Southeast. The route would begin in northern West Virginia and end at a compressor station in southern Virginia, carrying an estimated 2 billion cubic feet of natural gas per day.


Developers need early access to property along the route to do surveys and environmental assessments to ensure the pipeline path is viable. But many West Virginians are leery — frustrated by developers scoping out their land and doubtful that they’ll see much economic benefit.

For now, the battle for access hinges on state law. Though the Federal Energy Regulatory Commission has long handled oversight of natural gas pipelines, the rules for property access in the early stages of planning are set at the state level, and dozens of landowners in the path of the $3 billion MVP proposal think they have West Virginia law on their side to thwart pipeline planning.

MVP backers disagree with the landowners over the meaning of the state law, and both sides are now pressing judges to clarify the statute once and for all. Six West Virginia landowners filed two lawsuits last month, urging a state court to declare that pipeline planners cannot have access to property unless their project qualifies as an improvement for "public use."

Mountain Valley Pipeline LLC fired back by removing the landowner litigation to federal court and launching its own lawsuit, naming nearly 100 more landowners who have blocked property access so far. The suit asks federal judges in West Virginia to force the holdout landowners to let MVP planners on their property.

Experts say the legal battle is more than an everyday development squabble — instead representing a real test for state eminent domain law that could weigh heavily on MVP and other pipeline proposals that stretch under West Virginia, including the 550-mile Atlantic Coast Pipeline proposed by Dominion Resources Inc.

Once pipelines like Mountain Valley and Atlantic Coast have FERC approval, they can use federal eminent domain power for any stretch of land in their path. But to get that federal approval, developers must first submit detailed assessments of the route. And without adequate survey data, FERC could deny permits or delay the project until the application is complete.

MVP acknowledged the gravity of the potential effects in a legal filing last month, noting that the court would throw a wrench in its FERC application process if the judges do not force landowners to grant access.

"MVP is likely to suffer irreparable harm in the absence of preliminary relief because it cannot complete the necessary surveys to proceed with its pipeline project or its application for FERC approval for the proposed natural gas pipeline," attorneys wrote.

Public use or private gain?

At the center of MVP’s legal conflict is West Virginia Code Chapter 54, a section of state law that governs the use of eminent domain — empowering government agencies or certain companies to condemn properties or obtain easements to construct facilities for public use. Any company that holds eminent domain powers in West Virginia can enter private property for surveying.

The point of contention is whether MVP has that eminent domain power now, during its pre-FERC approval stage. State law specifically grants eminent domain power to oil and gas pipelines, plants, and storage facilities, but adds the qualifier, "when for the public use."

After MVP associates requested property access from Monroe County residents Brian and Doris McCurdy and Summers County residents Thomas and Susan Bouldin and Donald and Mary Ann Milam last summer, the landowners hired a lawyer and seized on the public use requirement. In a lawsuit against MVP, they argue that the developer cannot prove the pipeline serves the public.

Derek Teaney, the Appalachian Mountain Advocates attorney who took the case, argued in a petition filed last month that West Virginia case law supports a narrow interpretation of public use, requiring a pipeline to offer the public a "right to certain definite use" and serve residents "along the entire line traversed" to qualify.

The petition goes on to note that "not a single West Virginian will have access to or otherwise use gas carried by the Pipeline" because MVP’s plans don’t include any definite delivery points for natural gas to the 10 West Virginia counties the line passes through, instead sending all the gas to the Virginia terminus.

"Because the Pipeline will not be put to public use, Defendant is not invested with the power of eminent domain" and cannot access properties for surveying, the lawsuit concludes.

In fact, local natural gas delivery is still an open question for MVP. The pipeline’s economic benefit studies, released late last year, note the potential for West Virginia counties with limited gas access to connect to the open-access pipeline, but those connections will depend on future demand and other factors.

Still, MVP attorneys say state law is clear in protecting pipeline companies’ right to survey, with or without local connections.

"[T]he West Virginia Legislature has recognized the importance of pre-construction surveys, vesting private corporations with this authority where, as here, private property ‘may be taken or damaged for public use,’" MVP said in its March lawsuit against holdout landowners.

And in community meetings across West Virginia over the past year, MVP officials have emphasized other economic benefits they say will follow the Mountain Valley Pipeline, including local construction jobs and related boosts in business at hotels, restaurants and throughout the service industry in communities along the route, plus property taxes MVP will have to pay local governments.

"These are funds that local governments could use for vital public services, including infrastructure needs, roads, emergency services and perhaps most importantly investments in the education system," EQT Executive Vice President Blue Jenkins said last year after the release of economic benefit studies for West Virginia and Virginia.

The U.S. District Court for the Southern District of West Virginia will consider all three lawsuits over the coming months.

Property rights

Landowners in the pipeline’s path remain skeptical about what benefits they’ll see, resenting that developers are using West Virginia as a convenient cut-through to connect to other markets.

"A lot of the development has been under the guise of economic benefit," said West Virginia Surface Owners’ Rights Organization project manager Julie Archer. "People are very suspect that they just want to build these pipelines to ship it over to the coast and [ultimately] export it."

Michael Barrick, a writer and activist who has been tracking the development, said MVP officials worsened that perception with the "aggressive" surveying lawsuit.

"I just consider these tactics to be bullying," he said. "There is a clear difference between taking property to build a highway and taking property for a private company. Mountain Valley Pipeline just miscalculated in not recognizing that people would see the difference."

EQT, the main project backer, declined to comment for this story.

Barrick says the lawsuit has already backfired on the company by rallying opponents.

"They’ve really made a mistake, at least from a public relations point of view," he said. "By using eminent domain, they’ve actually created allies between groups of people that would not otherwise be allies. They’ve really gotten people fired up about property rights."

In some cases, environmental activists have led the push against pipelines, building on previous grass-roots efforts that targeted hydraulic fracturing. They say pipelines tear through sensitive areas and raise risks of spills, explosions, wildlife habitat fragmentation and other problems.

"The development of pipelines is becoming more and more of a battleground for the anti-fracking movement," said attorney Kyle Nuttall, who represents mineral owners in West Virginia, "so there might be a little bit more encouragement from anti-development sorts to fight pipelines than there was in the past."

But the environmental fights have occurred mostly at the FERC level, where activists have challenged whether the agency is complying with federal environmental laws when approving pipeline projects.

Property rights-focused opposition of the West Virginia variety, meanwhile, is making waves throughout the country. Amid such a swift expansion of the county’s interstate pipeline network, new proposals are setting off local movements that say pipelines are encroaching on their land without offering enough benefits for landowners or the general public.

In neighboring Virginia, for example, Dominion has also resorted to a lawsuit to gain access to land needed for the Atlantic Coast Pipeline. There, the access laws favor pipeline companies more clearly, and the project seems poised to move forward. In New York and Pennsylvania, the controversial Constitution Pipeline battled with more than 100 landowners before receiving FERC approval and federal eminent domain power to address remaining holdouts. And in Michigan, an Energy Transfer Partners subsidiary recently filed 17 lawsuits to gain access to property along the route of the proposed Rover Pipeline, which would stretch 711 miles mostly through Michigan and Ohio.

To Barrick, who once lost his own property to eminent domain for a highway spur, landowners’ potential defeat in the Mountain Valley Pipeline litigation would be both disheartening and, worse, a blank check for future development. If developers can convince landowners that development is inescapable, he said, they’ll stop fighting.

"From announcing cracker plants to pipeline routes before they are approved to suing landowners before having FERC approval, the industry has effectively promulgated this notion that the pipelines are inevitable," he told EnergyWire. "The point, of course, is to discourage and defeat opposition. It is an intentional strategy.

"Time will tell if it is successful."