Balancing Condemnation Rights with Property Owners' Rights to Fair Compensation

Wall Street Journal
August 19, 2011

Lawsuits Flow Over Texas Pipelines
Daniel Gilbert

Litigation associated with pipeline siting is on the upswing, as energy companies have ramped up production in the shale gas regions of the country. Pipeline companies typically have the power of eminent domain, which allows them to acquire the necessary easements to construct and operate a pipeline across a piece of property even if the property owner opposes it. Pipeline companies in Pennsylvania filed 61 lawsuits in 2009 compared with 16 in 2008, according to federal court records, as producers unlocked greater volumes of natural gas from the Marcellus shale. In Texas, the eminent domain law is being changed as of September 1 to require entities with eminent-domain authority to make a good-faith offer before filing suit, and to give landowners more time to respond to offers. In apparent anticipation of the change in the law, pipeline companies in Texas have filed at least 184 lawsuits against landowners in 2011 in four South Texas counties, compared with 28 all of last year. The new law, which is expected to tack an additional 60 to 90 days onto the time it takes to begin construction, appears to strike a reasonable balance between pipeline companies’ need to build versus providing property owners with adequate protections.