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Unconventional Oil And Gas Production: A New Era Of Eminent Domain And Condemnation
by Tomas DiFiore
Tuesday Sep 2nd, 2014 11:39 AM
Eminent Domain, Condemnation, Inverse Condemnation... It's a hot topic, in every State of the Union. Combined with 'New Technology Concepts' of Township Drainage - Beyond Forced Pooling and Unitization – Pipelines Employ Eminent Domain and Condemnation. Yet well depletion rates and the costs of maintaining current production levels are an investment sinkhole. Dear Mr. President, that '100 years of energy independence' isn't right beneath our feet anymore, it's being exported. Leases on (under) American soil are being sold to foreign companies and countries.
Unconventional Production: A New Era Of Eminent Domain And Condemnation

Graphic: Historic Oil and Gas Wells in Sonoma County (not currently a producing county - DOGGR)

Utility Companies Do Reserve The Right To Use Eminent Domain

The courts have held that oil and gas conservation statutes trump common law ownership theories. While oil and gas in situ (i.e. in place), and the right to explore and produce oil and gas, are both regarded as private property, the production of oil and gas has always been treated as being affected by public interest. This public interest is based on the fact that these minerals are non-renewable, that they are immensely beneficial, even necessary, to private and public welfare, and that they constitute an important source of revenue for a particular state.

The California Eminent Domain Report:

In 2006, the California Legislature passed SB 1210;

SB 1210 changed the prejudgment possession process.

In particular, it:
1) Extended dramatically the time it takes to get possession (it now takes more than 120 days for occupied property);
2) Ensured property owners would receive ample notice before a court considered a motion for possession; and
3) Created a new balancing test that required courts to balance hardships in determining whether or not to grant an agency prejudgment possession.
Public utility companies then began looking for a partial exemption from the new rules.

Eminent Domain in the Public Utility Space: General Concepts

Scott Hempling, Attorney at Law LLC
shempling [at]

Combined with 'New Technology Concepts' of Township Drainage, Forced Pooling and Unitization – Pipelines Employ Eminent Domain and Condemnation

“One circumstance exists in which the electric company is required to compensate the landowner for an easement. This situation is known as condemnation, a process by which the land is legally acquired against the landowner’s wishes for the public’s use. The legal process used for gaining an easement through condemnation is known as eminent domain. The US Constitution states that when private property is taken for public use, the owner is entitled to just compensation. The State of California allows landowners to have that amount determined by a jury.”

From The CPUC, a little history.

Senate Bill (SB) 177 (Peace) was approved by Governor Gray Davis on October 9, 1999 and became effective January 1, 2000. The bill adds Pub. Util. Code section 625 and requires certain public utilities that wish to condemn property for the purpose of offering competitive services to first file a complaint with the California Public Utilities Commission asking the Commission to find that the proposed condemnation would be in the public interest.

The Commission is then required to conduct a hearing on the proposed condemnation of property by the public utility. If, after conducting the hearing, the Commission finds that the proposed condemnation would serve the public interest, the public utility may then file an eminent domain action in Superior Court to condemn the property. However, if the Commission finds that the proposed condemnation would not serve the public interest, the public utility may not file a Superior Court action to condemn the property, unless an appellate court overturns the Commission's decision.

If the Commission finds in favor of the public utility, and the public utility wins an eminent domain action in Superior Court, the court will generally require the public utility to pay the property owner the fair market value of the property condemned. However, the Commission's decision on the complaint will address only whether the proposed condemnation would be in the public interest, and not the value of the property.

A complete manual, (PDF)

sample complaint (PDF)

and proof of service (PDF) are available. The Public Advisor can help with questions about these procedures.

Eminent Domain Public Utilities Code

2009 California Public Utilities Code - Section 610-626 Article 7. Eminent Domain
610. This article applies only to a corporation or person that is a public utility.

Private Property Rights Battles Eminent Domain In Oregon

In Oregon, the Pacific Connector Pipeline has united property owners against eminent domain. In 2012 Legislation was introduced to limit over-reaching 'interpretation of Public Use'.

“In introducing the bill on Feb. 9, U.S. Rep. Peter DeFazio, D-Ore., noted the U.S. Constitution limits the use of eminent domain to actions necessary for "public use" but said that pipelines such as the one proposed from Malin, Ore., to a proposed LNG terminal in Coos Bay, Ore.,fails that test. Instead, it would boost corporate profits while increasing domestic energy costs, DeFazio said.”

"The Constitution is quite clear: The government can only authorize the use of eminent domain if the action serves the public.”

UPDATES on the 2012 Oregon Bill:

The Federal Energy Regulatory Commission is expected to issue a draft environmental impact statement in coming months for the Jordan Cove Energy Project and make its final decision by mid summer 2015.

On August 10, 2014, DeFazio, D-Ore., spoke to a packed Coos Bay City Council chambers on his town hall tour of the Oregon South Coast.

“The LNG export terminal's approval process is dictated by federal law, he reminded the crowd, giving the Federal Energy Regulatory Commission the final say. FERC is expected to release a draft environmental impact statement for Jordan Cove any day, a document the Bay Area has waited years to see.”

"People think that means something bad, but I think it means they're taking their time," DeFazio said of FERC's lengthy process. "This is a unique proposal. While others are already in refinery areas, this is unique in that aspect. It's called a greenfield."

The majority of the U.S. House (mostly Republicans) don't agree. They approved the Domestic Prosperity and Global Freedom Act (H.R. 6) 266-150 in June. It's a bill that would fast-track the U.S. Department of Energy's LNG exports approval process.

The Federal Energy Regulatory Commission (FERC) in 2012 required Jordan Cove Energy, a proposed liquefied natural gas terminal in Coos Bay, Oregon, to submit a new application now that the facility would be used to liquefy and export natural gas instead of importing it.

FERC officials had stated that the associated Pacific Connector Pipeline has not been asked to file any new applications, and that the pipeline’s certificate of convenience and necessity is still valid.

“That certificate gives the Pacific Connector the ability to use eminent domain to acquire easements on private land. The pipeline would connect Jordan Cove’s coastal export terminal to natural gas suppliers at a major hub in Malin, Oregon. The 36-inch pipeline would run directly across several hundred private properties.”

Pipeline Awareness Southern Oregon; This is a community endeavor, a well put together and current Facebook page with frequent updates including national news, incidents, concerns.

Summarized as 4 legal issues regarding Eminent Domain and new drilling, especially in Northern California, with very little infrastructure (pipelines) for transportation of oil or gas production-

1) Public Utilities
2) Private Utilities

Eminent Domain, Condemnation, Inverse Condemnation....
It's a hot topic, in every State of the Union;

And the story on Eminent Domain from ProPublica:

State Laws Can Compel Landowners to Accept Gas and Oil Drilling
by Marie C. Baca, Special to ProPublica May 19, 2011

“A legal tool called forced pooling allows drilling companies to gain access to minerals beneath private property, even if the landowners object. Thirty-eight states have some form of forced pooling law. The specific provisions vary from state to state, but drillers can generally extract minerals from a large area or pool in most states a minimum of 640 acres, if leases have been negotiated for a certain percentage of that land. The company can then harvest gas or oil from the entire area. In most cases, drillers aren't allowed to build wells on the unleased land, so they use horizontal wells or other means to collect the minerals beneath those parcels.”

No Drill, No Spill, No Exports, No Condemnation Of Private Property For Pipelines

constant comments, and informative research links;

Tomas DiFiore