StarGazette.com reports that............

Landowners fight eminent domain in Pa. gas field

 When federal regulators approved a 39-mile natural gas pipeline through northern Pennsylvania’s pristine Endless Mountains, they cited the operator’s assurances that it would make sparing use of eminent domain as it negotiated with more than 150 property owners along the pipeline's route.

Yet a few days after winning approval for its $250 million MARC 1 pipeline in the heart of the giant Marcellus Shale gas field, the company began condemnation proceedings against nearly half of the landowners — undercutting part of the Federal Energy Regulatory Commission’s approval rationale and angering landowners.

Some of the landowners are now fighting the company in court, complaining that Central New York Oil and Gas Company LLC steamrolled them by refusing to negotiate in good faith on monetary compensation and the pipeline’s location. Their attorneys say CNYOG has skirted Pennsylvania’s eminent domain rules.

The company, a subsidiary of Inergy LP of Kansas City, Mo., insists it’s trying to reach a “fair settlement” with all property owners and wants to be a good neighbor.

The dispute could foreshadow eminent domain battles to come as more pipelines are approved and built to carry shale gas to market in states like Pennsylvania, New York and Ohio.

The company promotes the MARC 1 pipeline as key infrastructure in developing the Marcellus Shale, a rock formation underneath Pennsylvania and surrounding states that experts believe holds the nation’s largest reservoir of gas. The MARC 1, a high-pressure steel pipeline 30 inches in diameter, will connect to major interstate pipelines and the company’s own natural gas storage facility in southern New York state.

CNYOG hopes to start construction soon and finish by July, but it awaits permits from Pennsylvania environmental regulators and the U.S. Army Corps of Engineers.

It also needs to answer the legal challenge from residents.

Many of the complaining landowners say they favor natural gas drilling and some have leased land to gas drillers. What rankles them is that FERC has invested CNYOG with the power of eminent domain, taking away their bargaining power.

“Once the government becomes involved, this is what happens. Because you lose that leverage,” said Amy Gardner, who, with her husband, faces condemnation of part of their 175-acre parcel in Sullivan County.

The Gardners say CNYOG offered less than a third of the amount that another pipeline company had previously paid them to install a gathering line on their land. The difference? Gathering lines — smaller pipelines that take gas from the wellhead to a transmission line or processing facility — are not regulated by the federal government and companies that operate them don’t have condemnation power.

Amy Gardner said a company representative who made them the lowball offer told them to “take it or leave it.”

“There’s no negotiating with this company. They come and they tell you what they’re going to do. They’re telling you what they're going to pay. And they’re counting on the government to enforce it,” Gardner said in a recent interview at the Sullivan County Courthouse, where a judge has scheduled a mid-February hearing on the landowners’ concerns.

Amounts offered by CNYOG range from a few hundred dollars to tens of thousands of dollars, depending on the amount of property taken. Court papers filed by CNYOG in late December say it valued damages at 37 condemned properties in Sullivan County at $310,900.

The pipeline has been controversial since it was first proposed two years ago.

FERC, which considers all applications for new interstate pipelines, received 22,000 comments on the MARC 1 project, with many expressing concern about environmental and safety impacts. The Environmental Protection Agency also worried about potential damage to the forest ecosystem, noting the pipeline will cross dozens of pristine waterways in an area popular with hikers, hunters and fishermen.

FERC ultimately determined the pipeline would not significantly impact the environment and allowed it to proceed.

The commission was also supposed to consider whether there would be an “unneeded exercise” of eminent domain — the often-contentious legal process by which the government, or a party such as a public utility, takes private property for public benefit.

Indeed, the commission said last year its approval relied on the company’s assertion that it was acquiring land “through negotiated agreements with landowners, thus minimizing the need” to condemn people's land.

In reality, the company had prepared condemnation papers for dozens of properties even before winning commission approval on Nov. 14. Within a few days, it began eminent domain proceedings against 74 of 152 property owners along the pipeline’s route through the mountains of Bradford, Lycoming and Sullivan counties.

Deborah Goldberg, an attorney for the environmental group Earthjustice, said the large number of condemnations suggests that CNYOG “never made a serious effort to get negotiated agreements with the landowners that the landowners thought were fair.” Earthjustice has intervened in the case and is challenging the pipeline’s approval.

While most of the landowners receiving condemnation papers have since settled — the company says private agreement has been reached with more than 80 percent of the landowners — Goldberg suggested the pace of settlements has quickened because condemnation takes leverage away from the property owner.

The company insists it has met its obligation to negotiate. Its attorney, Michael Wright, said there were several “meet-in-the-middle cases” involving compromise.

“It’s not like we were sitting silently until the FERC order and rushed to the courthouse,” said Wright, who is based in Vestal. “To say we did not attempt to negotiate in good faith is incorrect.”

Wright acknowledged, however, that CNYOG told landowners that if they challenged the company in court, forcing it to incur legal expenses, then any deal on the table would be withdrawn.

Some landowners aren’t interested in the money. They’re more concerned about the pipeline’s route.

CNYOG told Bob Swartz that it plans to cut a 50-foot-wide, 400-foot-long gash through an ancient stand of trees across the front of his property. When Swartz proposed an alternate route through an open field that would preserve his trees and views, the company said it wasn’t interested and offered instead to pay him for the wood.

“That’s not negotiation. It was their way or no way, and ‘we’ll see you in court.’ It’s the little guys against Goliath,” said Swartz, who has challenged the company in court.

Another landowner, Lisa Richlin, has appealed to federal regulators to force CNYOG to abandon plans for an access road along her property. Richlin said the road is at the bottom of a long hill and around a sharp bend where there have been many accidents, at least one of them fatal.

When Richlin pressed the company to use an alternate route a short distance away, she said, the company told her that would result in a six-month delay.

“I want them to go elsewhere. I don’t want somebody to die because of stupidity,” she said.

In a statement, the company said it has accommodated dozens of landowner requests for route changes, but can’t do more because of “environmental, cultural and biological restrictions as well as other land use constraints.”

Some landowners who didn’t bother fighting the pipeline say the company still managed to leave a bad taste.

Linda Gavitt of Sonestown said she signed with CNYOG because she didn’t feel it was worth it to hire a lawyer to fight for more money. Even as she signed the paperwork, she got a hint of the company’s negotiating stance.

“They said that other people were holding out because they wanted more money,” Gavitt recalled. “They said, ‘We’re not paying more money because this is a federal line that’s going to go through no matter what, and $2 a foot is what we pay.’”

The Democrat & Chronicle reports that........

President Barack Obama's decision to support natural gas drilling on federal lands is being hailed by supporters of hydraulic fracturing in New York.

Obama's comments in Tuesday's State of the Union speech "should send a message to all the folks back home that even the president has vetted this and we need to move forward together," said Republican Rep. Tom Reed of Corning.

In his speech, Obama said America's natural gas reserves could meet the nation's energy needs for 100 years and could provide 600,000 jobs by the end of the decade.

"The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don't have to choose between our environment and our economy," Obama said.

The Bureau of Land Management estimates 90 percent of natural gas drilling on public lands involves hydraulic fracturing, in which a mixture of chemicals, sand and water is injected into shale formations to open fissures and allow the natural gas to come to the surface.

Lawrence Cathles, a geology professor at Cornell University's College of Engineering, hopes the president's comments will prod New York to end its moratorium on new drilling for natural gas in the Marcellus Shale.

"It's a very big resource and can be developed with minimal environmental risk," he said.

Oil and natural gas industry spokespersons also saw Obama's comments as a positive sign.

"Using newer technologies to harvest homegrown energy is a vital component in job creation and commerce by powering businesses and factories that are cleaner and cheaper," Brad Gill, president of the Independent Oil and Gas Association of New York, said in a statement.

"We stand ready to work with him," said Julia Bell, spokeswoman for the Independent Petroleum Association of America.

The Interior Department plans to sell 33 oil and gas drilling leases this year, Secretary Ken Salazar told a House committee in November. In 2010, the agency sold 33 leases for drilling on 3.2 million acres of federal land.

Hydraulic fracturing on public lands uses the same technology used by Marcellus Shale drillers in Pennsylvania. The industry hopes to use that technology once New York develops its own regulations and lifts its moratorium.

Obama also announced Tuesday that he will require drillers to disclose the chemicals they inject into wells, a demand made by environmentalists. The industry has resisted such disclosures of what it says is proprietary information.

Democratic Rep. Maurice Hinchey of Ulster County said he supports Obama's decision.

"The American people will know exactly what chemicals are being pumped into the ground, making it easier to hold drillers accountable if those chemicals end up in someone's well or our water supply," he said.

Hinchey wasn't as positive, however, about Obama's broader support for natural gas, saying the president has "endorsed questionable estimates of shale gas reserves and overstated industry claims about job creation."

Reed, whose Southern Tier congressional district is largely within the Marcellus Shale region, described the disclosure requirement as "a good proposal" as long as New York state officials handle enforcement and there's no overlap by federal officials.

Although that edict won't apply to private land, it's expected to have an impact on the industry's practices.

Disclosure of chemicals used by well drillers has been under consideration by the Interior Department since last year. The agency is still developing the disclosure rule, which will include some protection for trade secrets.

The department plans to require assurances that fluids won't escape underground during the fracturing process, and drilling companies will have to provide — for each well — a plan for disposing of water that flows back.

The hydrofracking concept has met with stiff opposition from environmental and anti-fracking groups, who have said the economic gain of a gas-drilling boom isn't worth the environmental risk.

The area of the state likely to be drilled first if the moratorium is lifted is in the Binghamton region. Rights have already been sold, however, for drilling on thousands of acres of land in the Finger Lakes and Southern Tier areas south and east of Rochester and Monroe County.

The state ended the public comment period on its hydrofracking regulations earlier this month and is poring over thousands of responses. It is unclear when the state will be able to complete its review and decide when to lift its moratorium on drilling.

As the New York state Department of Environmental Conservation is reviewing tens of thousands of comments relating to hydraulic fracturing of Marcellus Shale in the state, no timetable has been set for when oil and gas companies, landowners, and opposition groups will get to see them.

Agency spokesperson Lisa King said the DEC is in the process of preparing responses to the 13,000 comments it received during the first comment period in 2011, and the tens of thousands received during this last comment period, which ended Jan. 11.

King said the recent comment period was extended from its original Dec. 12 date because the DEC had heard from many individuals and organizations that they would like more time to prepare comments after studying the document.

The compilation of responses will be included in both the final regulations for drilling, as well as the Supplemental Generic Environmental Impact Statement, which lists all potential impacts to the environment in regards to hydraulic fracturing, or hydrofracking, and mitigation measures to those impacts.

"Once we review the comments, we will make any necessary changes to the documents. We expect the final documents to be released in 2012," said King. "If the final documents determine high-volume hydraulic fracturing could move forward in New York, we could begin to review permit applications after the final SGEIS is released."

But when asked around what month in 2012 that information will be made available, she said, "We don’t have a time frame."

The Marcellus Shale formation, which runs through New York state, houses an abundance of natural gas. But while the hydrofracking is used in neighboring states to access the gas, no permits have been issued in New York to drill the formation since the DEC began its review process in 2008.

Hydraulic fracturing, or hydrofracking, is a process where thousands of gallons of water, sand and chemicals are pumped into gas-rich shale formations to extract natural gas. Opposition groups have long claimed that the decades-old process poses dangers to human health, water supplies and ecosystems.