US Interstate Natural Gas Pipelines: Supreme Court Decision Reveals a Constitutional High‐Wire Act

Abstract

On June 29th, 2021 the US Supreme Court confirmed by the narrowest of margins what for more than 80 years was always assumed to be true for US interstate natural gas pipelines, by the industry and economists such as myself. We assumed that the 1938 Natural Gas Act (NGA), through its Section 7(c) certification process, gave pipeline companies possessing a Federal Energy Regulatory Commission (FERC) “certificate of public convenience and necessity” the ability to invoke eminent domain throughout the United States. Such eminent domain authority stems from the US Constitution's Commerce Clause, which permits interstate gas pipelines to pursue court action if they cannot negotiate acceptable terms of transfer with private and public landowners in the states and localities they transit, to establish a fair value for “taken” land for a route authorized by the FERC.