The Controversy over Energy Takings: A Tale of Pipelines and Eminent Domain

Abstract

This article examines the controversy over the exercise of eminent by private enterprise to acquire property for oil and natural gas pipelines. Although opposition to pipelines is largely driven by broad environmental concerns to curb reliance on fossil fuels, this article focuses on whether energy takings by non-governmental entities satisfy the “public use” requirement in state condemnation statutes or as a constitutional norm. It traces the history of eminent domain in the United States from the mill acts of the eighteenth century, emphasizing that legislators frequently delegated eminent domain power to canals, turnpikes and railroads in order to improve transportation. Courts regularly sustained these laws as effectuating a “public use.” In other words, “public use” was never confined to public ownership. In the late nineteenth century courts readily upheld legislation conferring eminent domain authority on private pipeline companies, comparing pipelines to other modes of transportation. With the Natural Gas Act of 1938 Congress asserted federal authority over the transportation of natural gas, and in 1947 granted federal eminent domain authority for interstate natural gas pipelines. Oil pipelines, on the other hand, continue to rely on a patchwork of state laws to exercise eminent domain power. For decades after World War II the acquisition of land for pipelines was not particularly controversial. With new technology, however, oil and gas production soared as did the need for expanded pipeline infrastructure. Critics now maintained that taking for pipelines were not for “public use,” and therefore failed to satisfy state eminent domain statutes or were unconstitutional. This article notes the erosion of the “public use” norm as a meaningful restraint on eminent domain, especially at the federal level. It then considers the checkered pattern of recent state legislative actions and judicial decisions, arguing that most state courts are likely to uphold the use of eminent domain for pipelines. It also points out that the same legal arguments used against pipeline construction are being employed to challenge new electric power transmission lines. The article concludes by questioning whether affected landowners and environmental advocates have much in common with respect to the rights of property owners and predicting that any alliance will prove fleeting and tactical.