Gas Pipelines and Eminent Domain

There is another battle brewing over the development of the Marcellus Shale—pipeline construction and eminent domain. With little infrastructure in place, pipeline companies are contributing to the Marcellus economic boom, but the emergence of this new industry also presents a threat to property rights.

Eminent domain laws were originally created for things like power lines, highways, and pipelines, as these structures are considered to have a primarily public benefit. But in recent years eminent domain laws have been abused by local governments, who have sought to take private property and give it to another private entity in the name of "economic development".

In Pennsylvania, eminent domain can only be used for large interstate pipelines (pipelines crossing at least two states), while the smaller gathering lines connecting each well must be negotiated with landowners. This important limitation shrinks the number of property owners vulnerable to eminent domain, but the possibility for a court showdown still exists.

Meanwhile, some pipeline companies are applying for utility status in Pennsylvania in order to acquire more expansive eminent domain powers. Other pipeline companies worry this will open a floodgate of regulations from the PUC.

In the end, most pipeline companies are very vocal about their preference to negotiate fair compensation, and restrictions to avoid the expensive and time consuming process of eminent domain. The Penn State Marcellus Center shares some additional tips for landowners negotiating the construction of a pipeline on their land.