by Jeffrey Insko | Jan 24, 2014 |
In the midst of the property rights nightmare and landowner abuse that has been the Line 6B replacement, evidently the Michigan legislature has decided to make things even worse for Michigan property owners. Just yesterday, Representative Rick Outman introduced legislation that would further erode the already weak rights of property owners in the path of oil and gas pipelines.
Bear with us while we explain:
Remember Michigan Act 16 of 1929? We’ve talked about it a lot here over the past year or more. It’s the law that governs the transportation of crude oil or petroleum through the state of Michigan and grants carriers of those substances the power of eminent domain. It’s the law that our first land agent pulled out of his pocket the first day we met him– and that was before Enbridge had been granted the right of eminent domain by the MPSC. Of course, it didn’t matter, since Enbridge all but owned the MPSC; in fact, the MPSC helped Enbridge to more or less re-write Act 16 of 1929 to suit their own and their industry peers’ interests.
Well, two bills have just been introduced in the Michigan House of Representatives seeking to amend Act 16. The reason for these amendments can be stated in one word: fracking.
Now, we haven’t spent much time discussing fracking here at the Line 6B blog. Generally speaking, we try to keep ourselves focused. Also, unlike some places in the country, like Pennsylvania, where our friends like Emily Krafjack and Lynda Farrell (among others) are working hard to protect landowners and natural resources, fracking– or at least the kind of hydraulic fracking that has become so controversial nationally–hasn’t been a major problem in most parts of Michigan. As we understand it, this has mainly to do with geology.
Which isn’t to say fracking is not something we should be worried about. It is and we very much are. There are plenty of reasons to be wary and vigilant, not the least of which, as some of our very best friends will tell you, is the possibility of oil and gas development in some very beautiful and sensitive recreational areas in our state. Plus, there’s the water– which is where the proposed legislation comes in.
You see, high pressure hydraulic fracking typically requires water– lots and lots of water. And water, of course, is a precious natural resource, not something to be squandered, especially in a state like ours that with a culture so deeply rooted in outdoor sports and recreation. However, there are apparently other fracking methods that don’t need to use all that water. Those methods use, instead, carbon dioxide. CO2 fracking, although it has its downsides– cost being one of them– might well be better for the environment. So– and we are still learning about this ourselves and are therefore not prepared to make any firm pronouncements about it– if there’s going to be more fracking in Michigan, this may be the desirable kind.
Which explains why HB 5255 is seeking to amend Act 16 to include the following language to the section of the Act addressing “condemnation for acquisition of right of ways”:
(B) AFTER RECEIVING APPROVAL UNDER THIS ACT AS REQUIRED FOR CRUDE OIL OR PETROLEUM, TO TRANSPORT BY PIPELINE GASEOUS OR LIQUID SUBSTANCES, CONSISTING PRIMARILY OF CARBON DIOXIDE, THAT WILL BE PUT IN STORAGE OR THAT HAVE BEEN OR WILL BE USED TO PRODUCE HYDROCARBONS IN SECONDARY OR ENHANCED RECOVERY OPERATIONS.
It’s the “gaseous or liquid substances, consisting primarily of carbon dioxide” part that is new. As it is written now, the Act only mentions oil. The reason for this change is obvious: if we’re going to frack with CO2, we’re going to need lots of it and it’s going to need to get moved around. Apparently, this is exactly what our legislators foresee: the need for the transportation of lots of CO2 gas. That gas is probably going to get transported by pipeline– which means building more pipelines. Through people’s property.
So that’s mixed news at best–although there may well be more to the story than we understand yet. It’s (possibly) mixed because CO2 fracking might not be such a bad thing (in relative terms, that is), even though building lots of new infrastructure presents all kinds of potential problems– problems of precisely the kind that those of us on the Enbridge pipeline route have had to endure. But it’s here where the news is not mixed at all, but very, very bad.
You see, there’s a companion bill to HB 5255. It’s HB 5254 and it also seeks to amend Act 16, but a different section. Here’s what HB 5254 would do: it would change the language of the bill so as to redefine who the protections of the act apply to. Specifically, it would remove the word “landowner” and replace it with “owner of agricultural property.” What that means, then, is that the protections included in the bill (and granted, there aren’t a lot of them, though there are some) would ONLY apply to “owners of agricultural property,” not to “landowners.” Non-agricultural property owners– and presumably that means most people, like you and me–would therefore have even FEWER rights than they do now if and when a pipeline gets to run through their property. Oil and gas companies could just have their way on your property– even more so than they do now.
Needless to say, this is outrageous. As I think anyone who has lived through the Line 6B nightmare or anyone who has paid careful attention to it will attest, the state of Michigan needs to STRENGTHEN property rights, not further erode them.
This, we think, is an actionable matter, an urgent matter. Please take the time to write or call your legislators to oppose HB 5254 and its blatant assault on individual property rights in the name of fracking. In the meantime, we’ll learn more about this legislation and, as soon as we can, post a follow-up with more information.
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Our follow-up with more information about this legislation has been posted. You can read it here.
by Jeffrey Insko | Aug 22, 2013 |
If you’ve been paying attention, you’ve probably noticed that there has been a flurry of Enbridge Line 6B coverage this week. A great deal of it centers upon the harrowing situation at the house of our friend Dave Gallagher in Ceresco (and more and more). And the rest has been instigated by Enbridge itself, which has decided to launch a charm offensive with the press lately (see this and this). We can’t help but think these things are related; Enbridge seems to enjoy few things as much as a pr battle.
Anyway, we think Dave’s story is worth paying attention to. But not only because of the dramatic pictures and videos–and they certainly are dramatic. It’s also important because it illustrates vividly how and why Enbridge has bulldozed its way (literally and figuratively) through the state. In fact, we think that Dave’s situation represents a teachable moment. After all, plenty of other people on this route have experienced what Dave is going through– have you seen the pictures from Beth Duman’s house? Or Amy Nash’s? There are properties right in my neighborhood where the pipe runs within 10 or 15 feet of dwellings, just as it does Dave’s. Dave’s situation, and he’ll be the first to tell you this, is awful, but it’s far from singular.
Unfortunately, much of the press is unlikely to avail itself of the teachability of this moment. This is particularly true of television news. Witness, for instance, this rather awful report from Tom Hillen at WOOD-TV out of Grand Rapids. Go ahead and watch. We’ll continue after you’re done…
There are a number of serious problems here, not all of which are entirely Tim Hillen’s fault. Let’s review:
First and foremost, there are the remarks of the now-ubiquitous Jason Manshum, who unlike most of us has a job where he gets to say things all the time without ever being challenged or without worrying about whether what he says is at all verifiable. This time, he addresses Dave’s concerns that his property value will plummet. In response, Manshum says this:
“Studies have shown on our pipeline as well as other energy transportation companies that values — home values — do not decrease with pipelines. There is not a direct correlation that we have found,” Enbridge spokesman Jason Manshum said.
Those are certainly interesting claims and we would be very eager to verify whether thy are in fact true. For that reason, we’ve written to Manshum asking to see his data. Unfortunately, if history is any guide, he will ignore our query– because, as we said, Manshum lives in a dream-world where it doesn’t much matter whether his assertions are backed by any actual evidence. We’ll keep you posted.
The next problem with the report– and it is a MAJOR problem– is in fact Hillen’s fault. Here is what he says:
Enbridge is able to do the work because it has an easement on Gallagher’s property, which means it owns some of the land in his backyard.
Now, it’s not clear here whether this is something that Enbridge said to Hillen or whether Hillen generated this statement on his own. But one thing is clear: this is absolutely NOT TRUE. And the fact that it is not true is why this report is not only sloppy, but positively harmful. It does a tremendous disservice not only to Dave Gallagher, but to public discourse. It feeds a terrible misconception about property rights in general and Enbridge’s treatment of landowners in particular.
An easement does NOT mean that Enbridge “owns some of the land” on someone’s property. Dave Gallagher owns that land, period. An easement (or a right of way) simply means that Enbridge has the right to access and use that land for specific activities as specified in the easement agreement. They do NOT get to do whatever they want with it whenever they want to. They do not have total control over that property nor do they have total control over what Dave Gallagher does with that property. Even Enbridge would not dispute this. They can’t dispute it because it is a legal fact. And because easement rights are not ownership, it is entirely possible for easement holders (like Enbridge) to abuse or overstep their easement rights. (One might even argue that Enbridge has abused its easement rights). But just because Enbridge would not or cannot claim that they “own” the land for which they hold rights-of-way doesn’t mean that they’re not perfectly happy to have landowners and the public believe, mistakenly, that having an easement means owning that property. The more people believe that, the less likely Enbridge’s activities are to be challenged; the less likely know-nothings who post internet comments on stories like this one are to sympathize with situations like Dave’s. That’s just the way Enbridge likes it.
The last problem is the fault of Enbridge and Hillen both. On the subject of eminent domain, this is what Hillen says:
Enbridge says they didn’t have to pay Gallagher or other land owners, but they do because they want a good relationship with them. According to Manshum, Enbridge has eminent domain, which would give the company the right to lay the pipeline no matter what.
This is misleading at best. What does Manshum mean when he says Enbridge “didn’t have to pay… land owners”? That they don’t have to pay for exercising their easement right? That may be true, depending upon the easement agreement. But in most cases, that’s beside the point. Rather, the issue of payment frequently has more to do with (a) the acquisition of NEW easement rights– which is the case with Dave’s property. For that, they do have to pay; and (b) the use of “temporary workspace” and whatever damages that use causes. On our property, for instance, Enbridge took (temporarily) an additional 65 feet outside their existing easement. That’s where most of our trees and our garden were. Enbridge DID have to pay for that; they did not just pay us “because they want a good relationship with” us, as Manshum claims. They were legally obligated to compensate us for damages.
Perhaps even worse, though, is both Enbridge’s and Hillen’s glib treatment of eminent domain. Manshum trots it out, callously, like a sort of trump card and in doing so characterizes the whole situation so that it appears that every scrap and crumb Enbridge gives out is a sign of its tremendous generosity, when if they really wanted to they could just trample on us all like cockroaches. This is exactly what Enbridge VP Mark Sitek said to us after we went round and round for quite some time. One can only assume that this is what Enbridge really believes, despite all the good neighbor rhetoric: “you helpless, groveling peasants ought to be grateful we’re giving you anything at all!”
Hillen and his colleagues are all too happy to promulgate this view. Just watch their daft back and forth about it at the end of the report, shrugging their shoulders about eminent domain as if it’s just a fundamental law of the universe: “yeah, that’s just how it is with gravity. Nobody could stop that apple from falling from that tree.” The problem, however, is that eminent domain is NOT a natural law. Enbridge was granted that right by the Michigan Public Service Commission, through a process that, as we have written about exhaustively, was deeply flawed and failed to serve the interests of the citizens of this state. Hillen had a chance to explore that, to initiate a discussion about the use (and abuse) of eminent domain. But he did no such thing. Instead, he simply demonstrates that he doesn’t really understand eminent domain law any more than he understands easement rights.
As a result, a chance to actually inform the public, to explain to people why, aside from mere “inconvenience,” landowners might have some legitimate complaints, to use Dave Gallagher’s terrible story to help people understand easement rights or how and why foreign companies are granted the power of eminent domain, or to initiate some important discussions about matters like property rights and energy policy and our regulatory systems, things that ought to be of interest to every citizen, is missed. And because of that, even though Enbridge isn’t running bulldozers right outside all of our living rooms, we’re all still getting Gallaghered. Score another one for Enbridge.
by Jeffrey Insko | Apr 10, 2013 |
It’s been a while– about four months– since we last provided an update on the lawsuit filed by POLAR (the non-profit legal defense fund Protect Our Land and Rights started by our friend Jeff Axt) in Oakland County Court. If you’ll recall, the suit sought an injunction against Enbridge, seeking Enbridge’s compliance with the “local consent” provision of the Michigan State Constitution, the state Highway Act, and the securing of all requisite environmental permits. If all of this is new to you or you’ve simply forgotten, our archives will provide you with a primer and some extended discussions of these matters.)
Eventually, Enbridge sought to remove the case to federal court, where they expected to get a friendly hearing and have the case dismissed. The federal judge did not dismiss the case, though he did rule that POLAR lacked standing in federal court. As a result, he remanded the case back to Oakland County. This seemed, at the time, potentially good news for POLAR (or so we thought), since the county court, we hoped, would have much more interest in addressing the substantive state Constitutional matters at stake– waters into which we never thought the federal judge would want to wade. We were even more hopeful given the history of the Oakland County Judge assigned to the case, Phyllis McMillen, who ruled favorably toward landowners in some of Enbridge’s condemnation suits.
Well, two weeks ago, Judge McMillen dismissed the POLAR case, finally ending the suit. The grounds of her dismissal? Not surprisingly, it was the old issue of standing. The ruling states, “At issue in the present case is whether POLAR has alleged damages of a special character distinct and different from the injury suffered by the public generally.” Then, after rehearsing POLAR’s claims about damages to its members, McMillen says,
To the extent that these paragraphs allege damages to the community as a whole, they would not qualify as special damages. As it relates to allegations of damage to POLAR’s members’ property, the alleged harm does not result from Enbridge’s alleged violation of the laws cited, i.e., failure to obtain consents and permits. Even if the proper consents and permits are acquired, Enbridg’e activities will have the same impact on the members’ proerty, and same will be perfectly lawful. Without a showing that the potential harm is “resulting from” the failure to obtain the consents and permits, POLAR has failed to allege special damages. Because POLAR has failed to allege special damages, it lacks standing to pursue the claims.
On the bright side, what this means is that Judge McMillen– not unlike the federal judge– did not rule on the substantive questions in the suit (ie, whether Enbridge is required to seek “local consent,” whether Enbridge is a “common carrier,” etc.). What’s more, Enbridge asked to have the suit dismissed “with prejudice,” which essentially would have meant that POLAR could not refile the suit. But McMillen chose to dismiss “without prejudice,” which means that her ruling was confined strictly to the procedural matter of standing. So the substantive questions live and could be raised again in a new filing.
So POLAR’s not finished yet. They are pursuing other legal avenues as well, including appeals of the MPSC rulings in both Phases 1 and 2, appeals that are still pending. We will do our best to keep you updated.
by Jeffrey Insko | Apr 10, 2013 |
There is some interesting– and promising– news out of northern Indiana this week. As you may recall, the hardworking folks at Save the Dunes have been trying to ensure that the Line 6B replacement does not harm sensitive wetlands. In that effort, they have been talking with local officials in LaPorte County. Now the LaPorte Herald-Argus reports that LaPorte County officials plan to “require a review of the project because it appears to fall within the regulations of its joint zoning ordinance.”
The wind in LaPorte County’s sails comes from a recent federal court decision. On March 25, the U.S. 4th Circuit Court issued a ruling in Maryland stating that federal law does not preempt the enforcement of local zoning laws. (Super legal nerds can read the ruling here.) Specifically, the Court upheld an earlier court ruling dismissing a complaint from Washington Gas Light Company declaring that the National Gas Pipeline Safety Act (PSA), the Natural Gas Act (NGA) and state law preempt Prince George County zoning plans. Washington Gas therefore sought an injunction preventing the county from enforcing its zoning laws.
But the Court rejected Washington Gas’s complaint, noting that the federal laws apply to matters of safety, not to siting and routing. The Court ruled:
the PSA does not preempt the County Zoning Plans because the PSA only preempts safety regulations and the County Zoning Plans are not safety regu- lations; and (3) the NGA does not preempt the County Zoning Plans because the NGA only preempts state and local laws governing interstate natural gas operations and, per the NGA, Washington Gas is a local distribution company.
In our view– and, evidently, in the view of the LaPorte County attorney– this ruling bodes very well for the efforts of local municipalities to have some input into the Line 6B project. Our regular readers might recall that, just like Washington Gas, Enbridge’s response to local governments has always been “pipelines are regulated at the federal level”– a misleading claim at best, as we’ve discussed before on more than one occasion. And had the 4th Circuit Court’s ruling been handed down some months ago, it might well have helped Brandon Township and Howell Township enforce their ordinances, which like the Zoning Ordinances of Prince George County do not attempt to regulate pipeline safety. Looking ahead to Phase Two of the Line 6B project, this ruling might yet be of some use not just to LaPorte County in Indiana, but some Michigan townships as well– if you’re on Phase Two, you might mention this to your township supervisor. The ruling might also be of some help to POLAR in its ongoing cases (about which we hope to post in detail later today).
We will keep you updated on matters in Indiana. For now, we’d just like to commend folks down there, especially Nate Pavlovic and Michael Hollcraft, and County Attorney Shaw Friedman, for their dedication to the protection of valuable ecosystems.
by Jeffrey Insko | Feb 1, 2013 |
This morning, over our coffee and toast, we gave yesterday’s MPSC order approving Enbridge’s phase two application a thorough reading. Ordinarily, these things are, you won’t be surprised to learn, rather dry documents. But we have to say, this one is slightly less dry– mostly that’s because it adopts such a nasty and frankly unprofessional tone. To our ear, it’s as if somebody over there at the MPSC has taken offense that anyone would dare to try and raise any pesky questions that go beyond the extraordinarily narrow framework created by Enbridge and all-too-willingly adopted by ALJ Theresa Sheets (this particular point is the topic of the upcoming next installment of our latest series). The order doesn’t just disagree with the intervenors in the case; it practically scolds them for taking up the commission’s time.
After a lengthy presentation of the sequence of events in the hearing and the positions of the parties (Enbridge and the intervenors), the commissioners’ ruling begins with this cheap shot:
Many cases litigated before this Commission involve matters that are arguably close calls. This case is not one of them. Whereas the evidentiary presentations by Enbridge and the Staff were thorough and complete as discussed above, the evidentiary presentations of the pipeline’s opponents were virtually nonexistent. This introductory observation is critical because the Commission is required to base its findings on record evidence.
Now, we weren’t aware that there was a margin of victory in these things (perhaps the commission should have provided the final score!) and the purpose of this opening statement is far from clear. Its claim to the contrary, this “observation” is hardly “critical.” At best it’s gratuitous, it nearly gloats, and appears designed to do little more than rub the intervenors’ noses in the ruling.
As for the notion that “the evidentiary presentations of Enbridge and the Staff were thorough and complete,” this is absurd on its face. Sure, Enbridge presented a lot of evidence. But the Staff? As we demonstrated last week, their witness Travis Warner hardly did anything at all. Making a phone call to the Marathon refinery, looking over Enbridge-supplied maps, admitting to only having reviewed PHMSA standards “very generally” (“I’m not extremely familiar with them,” Warner stated in the record), and “rel[ying] on Enbridge’s opinion” for his own assessments hardly constitutes a “thorough and complete” presentation of evidence. Despite this, astonishingly, the rulings states (presumably with a straight face) that “The Commission finds that, in light of the Staff’s expertise, the Staff’s testimony is entitled to significant weight…” Honestly, just read Warner’s testimony and read our discussion of it. Does anybody seriously believe he brought to bear some kind of weighty expertise on this matter?!
Finally, it’s cruelly ironic to assert that the “evidentiary presentation of the pipeline’s opponents were virtually non-existent” when so much of the evidence those “opponents” tried to introduce was ruled inadmissible by Judge Sheets: the NTSB report, the matter of the state Constitution, the testimony and exhibits by Deborah Hense, to offer just a few examples.
But that’s not the worst of it. The order is especially (and needlessly) snide towards Steven Fischer. We suspect this is because he is not an attorney by profession and the MPSC’s general attitude with regard to ordinary landowners is to treat them as mere annoyances (about which, more below). This is what the order has to say about Fischer:
In reaching its determination on the public need issue, the Commission finds that it is appropriate to discount the positions taken by Mr. Fischer and the Landowner Intervenors regarding the proofs. Mr. Fischer’s arguments are mostly generalizations based not on record evidence, but on his own suppositions. As pointed out by Enbridge, such arguments are wholly inappropriate because both the Commission’s Rules of Practice and Procedure16 and the Michigan Administrative Procedures Act17 require the Commission’s decisions to be based on record evidence. Mr. Fischer offers none to support his positions.
Obviously, it is the Commission’s prerogative to disagree with Steven Fischer, but as a PUBLIC commission, it seems to us their statement of that disagreement could at least show him the respect due to someone who has worked exceedingly hard on behalf of the public. The Commission could find his arguments ultimately unpersuasive (even we didn’t always find them entirely persuasive), but still recognize that they were an important– even vital– part of process. Instead, what we have here is more nose-rubbing.
One final example of the needlessly unprofessional tone of the order, this one tucked into a footnote addressing the matter of the NTSB report:
It is abundantly clear that while the Landowner Intervenors made lofty claims of the need to review the NTSB Report so as to “present those expert witnesses on behalf of the landowners that would be very highly qualified to speak on the subject and would give your Honor, you know, both sides of the story so you can make as informed decision as possible,” [2 Tr 116] and that they demanded and received additional time to do so, in the end the Landowner Intervenors failed to submit admissible testimony from a single witness, expert or otherwise. Accordingly, the Commission finds that the NTSB Report constitutes nothing more than a red herring in this proceeding.
First, it is once again gratuitous to take such a mocking attitude (ie, “Landowner Intervenors made lofty claims”), which does little more than show a type of contempt toward landowners. Secondly, what sort of admissible testimony could the intervenors possibly have been able to produce when the subject upon which they would have been called to testify (the NTSB report) was ruled inadmissible in the proceedings? And thirdly, the statement that “the NTSB Report constitutes nothing more than a red herring in this proceeding” can only be taken as a deliberate insult, since it accuses the intervenors of some kind of cynical ploy to lead the proceedings astray (either that, or the Commission doesn’t understand what the red herring metaphor means). When the plain fact of the matter is that without Marshall– and that’s what the NTSB report is about–there would be no application U-17020 upon which the Michigan Public Service Commission could issue such a snotty, supercilious ruling in the first place.
We always knew the Commission would approve Enbridge’s application; we just didn’t know they would be so churlish about it.
by Jeffrey Insko | Jan 27, 2013 |
In our latest series, we’re reporting on some of the arguments and testimony presented before the MPSC on Enbridge’s phase two application. And as we do, we’ve been thinking about and discussing how well the MPSC fulfills (what we view as) its obligations, as a state regulatory body, to the citizens of the state of Michigan. In our first installment, we introduced you to the MPSC’s public engineer Travis Warner, who (to be blunt) appears not to be working all that hard when it comes to analyzing Enbridge’s application. In our second installment, we introduced you to MPSC staff attorney Michael Orris, who does seem to be working hard– that is, working hard on behalf of Enbridge, rather than on behalf of the public that pays his salary.
So far, we’ve mostly left the Administrative Law Judge in this matter, Theresa Sheets, off the hook. But make no mistake, we’re as baffled by her willingness to accept Enbridge’s arguments (at nearly every turn) as we are by Michael Orris’s. In this our third installment, we take a closer look at Judge Sheets and one of the more troubling ways she has allowed Enbridge to frame and determine the direction of the Enbridge proceedings.
To begin, it’s worth taking note of Judge Sheets’s background. She is still listed (on their website) as an employee of the Lansing firm Loomis, Ewert, Parsley, Davis & Gotting. According to her profile there she
is experienced in oil and gas law, including issues of land use, negotiation of oil and gas leases, representation of clients in matters before the Michigan Department of Environmental Quality under oil and gas laws, negotiation of wind leases, and various aspects of wind farm development.
Presumably, it is this experience that got her appointed to be ALJ at the MPSC. Yet we also presume that her “oil and gas law” experience does not entail advocating on behalf of those who might somehow find themselves at odds with large oil and gas interests. Why do we so presume? Well, for one thing, because her (former?) firm:
represents a number of oil and gas producers operating within the State of Michigan. The firm is widely recognized for its expertise in oil and gas law, and has rendered legal services for the oil and gas industry for more than 30 years. Our presence in Lansing, Michigan, results in convenient access to all state regulatory agencies having jurisdiction over oil and gas operations.
And for another thing, Sheets’s Loomis profile also notes that she is (or was) a member of the Michigan Oil and Gas Association. Who are they? Well, according to their website, the MOGA:
represents the exploration, drilling, production, transportation, processing and storage of crude oil and natural gas in the State of Michigan. MOGA has nearly 1,000 members of which includes independent oil companies, major oil companies, and the exploration arms of various utility companies. . . The organization has been described as the collective voice of the petroleum industry in Michigan, speaking to the problems and issues facing the various companies involved in the states crude oil and natural gas business.
And for one more thing, her profile touts the fact that she “has lectured on leasing; title and trust ownership at conferences of the Michigan Association of Professional Landmen.” Who are they? Well, they’re a group made up of “individuals responsible for the acquisition, administration and disposition of mineral and/or surface rights for petroleum exploration and production companies…” That’s right, it’s an organization for people who work as ROW agents (you know, just like the ones so many of us have gotten to know over the past year or so). Judge Sheets is (or was) a member of that organization as well.
Now, what does all this mean? It’s certainly not terribly surprising that someone with the sort of experience Theresa Sheets has had would wind up working for a state agency ostensibly responsible for regulating the same industry clients for whom she worked. This kind of thing is totally routine– as we learned, for example, about PHMSA at the PS Trust conference last November. And, theoretically at least, we’ll even concede that it’s possible that one could spend a significant portion of one’s career advocating for a particular industry and still be impartial as a regulator of that industry.
Nevertheless, this work history gives us some pause. Does it rise to the level of a conflict of interest? We don’t know. But if nothing else, it’s safe to say that Judge Sheets has been trained to approach and think about “oil and gas law” from the industry’s point of view, not from the point of view of those who might be critical or skeptical of the claims made by that same industry, like ordinary landowners. We wonder: is it really too much to ask that those tasked with scrutinizing the claims of an oil company have some genuine experience advocating for someone other than those oil companies? Like, for example, those whom that same oil company might potentially harm or abuse?
Which brings us back to the phase two proceedings. Inexplicably, Judge Sheets has had no trouble accepting nearly every argument made by Enbridge throughout these proceedings. In fact, there are only two instances we have come across (perhaps there are others we have missed) where she has in any way contravened the claims or wishes of Enbridge: there was the moment when, at an August hearing, she stated that she believed that the state constitution required Enbridge to seek local consent before beginning construction; and there was her ruling granting intervenors additional time in order to review the just-released NTSB report.
Of course, neither the statement nor the granting of additional time has made any substantive difference since, in both cases, Judge Sheets also ruled that neither the “local consent” provision in the state constitution nor the NTSB report were relevant to the MPSC matter at hand; in fact, she has specifically excluded both from the proceedings. And this is the crucial point here: Enbridge attorneys have labored to so limit the scope of the MPSC’s authority so severely as to cripple it– and Judge Sheets has helped them succeed.
We’ll explain precisely how she has facilitated Enbridge’s strategy in a separate post (installment 3.1!), as this one has already gotten much longer than we’d planned. Stay tuned.
by Jeffrey Insko | Jan 23, 2013 |
This week we kicked off our new series on the MPSC hearings of Phase Two of the Line 6B project. Among other things, we’re using this series as an occasion to explore the regulatory function and performance– weak and ineffectual, in our view– of the Public Service Commission. In our first installment, we introduced you to the MPSC’s public engineer Travis Warner. In this our second installment, we will introduce you to another MPSC employee. But first, a final thought about the MPSC’s public engineer:
Our intent was not to pick on young Mr. Warner. We understand that he’s simply part of a system that appears to actively discourage the slightest skepticism or tough questioning toward companies like Enbridge. For instance, we are more than a little nonplussed by just how thin Warner’s analysis of Enbridge’s application really is. After all, the MPSC relies heavily on Warner’s testimony about such matters as whether the proposed pipeline meets or exceeds current safety and engineering standards. Yet consider this exchange during his testimony (the questioner is attorney Gary Field):
Q: For a petroleum pipeline project, what standards do you review?
A: What standards do I review?
Q: Yes.
A: Well, Michigan doesn’t have standards for petroleum pipelines. It would be the Pipeline Hazardous Materials Safety Administration Standards.
Q: Do you review those standards?
A: Very generally. I’m not extremely familiar with them.
Or consider this exchange regarding the very important matter of how the project will affect landowners:
Q: Have you, as to this project, conducted a review of the effect on landowners?
A: Yes.
Q: What did that consist of?
A: That consisted of going page by page through a series of maps in order to possibly look at a potentially different route or mainly to review the proposed route for the impact on landowners.
. . .
Q: You didn’t talk to any landowners, did you?
A: I have spoken with some landowners over the phone.
Q: But in the context of determining whether a route was disruptive to landowners or not, you haven’t spoken to any landowners specifically on that topic, have you?
A: Well, as we went over before in this case, the landowners aren’t yet aware of the specific route on their tracts. I did talk with landowners in the other case but — and they had more specific route plans. So I guess no in this case.
Similarly, consider his response to a question about whether the existing Line 6B could be sufficiently repaired: “I relied on Enbridge’s opinion on that matter.” Or a question about how much additional capacity (or petroleum) is appropriate for Line 6B: “I relied on Enbridge’s opinion on that matter.”
Yes, this is your “Public Service” agency at work. In this matter, they appear only to be serving the interests of Enbridge, not the public. Which brings us to Travis Warner’s colleague, MPSC staff counsel Assistant Attorney General Michael J. Orris. To be honest, we don’t really understand what, exactly, Orris’s role entails. What we do know, however, is that virtually everything he has said or done during the course of the proceedings has been for the direct benefit of Enbridge.
For example, on the day of cross-examinations of witnesses (November 13, 2012), all four of Enbridge’s witnesses– Mark Sitek, Tom Hodge, Enbridge Environmental Analyst Rachel Shetka, and our old pal Doug Aller— appeared for questioning by Gary Field (on behalf of the intervenors) and Steven Fischer (representing himself). One would think, in such a proceeding, that the attorney hired to advocate on behalf of the public (the MPSC is, after all, a public agency) would at least have a few questions for the applicants (Enbridge). Yet Orris had not a single question for Sitek, Shetka, or Aller. He did ask Tom Hodge a brief question, the purport of which is not altogether clear, regarding route variations. But other than that, he was idle.
But not entirely idle. Orris had plenty of objections to make during Fields’s cross-examinations. In fact, on one point, Orris was quite tenacious. You see, while questioning Tom Hodge, Field dared to mention the NTSB report on the Marshall spill. When he did, Enbridge attorney Michael Ashton immediately objected and Orris was only too happy to weigh in in support of Ashton’s position.
Now, bear with us for a moment. To understand what happened at this point in the proceedings requires a bit of context–and, we’re sorry to say, some legalistic nitpicking. You might remember that way back in July, the intervenors in Phase Two requested a delay in order to review the NTSB report. Enbridge, not surprisingly, argued that the report was not relevant to these proceedings (an extraordinary argument to make, in our view). The delay was granted (in part) in order to give the intervenors time to review the report, even though Administrative Law Judge Theresa Sheets also stated that the NTSB report “is not admissible in these hearings under federal statute.”
It’s this last statement that is the sticking point. The federal statute to which Sheets refers is federal code 49 U.S. C., section 1154, which states:
No part of a report of the Board, related to an accident or an investigation of an accident, may be admitted into evidence or used in a civil action for damages resulting from a matter mentioned in the report.
Now, on the face of it, this legal provision makes good sense. After all, if a report like the NTSB’s report on Marshall could be used in a civil lawsuit, then those who work for a company likely to be sued (like Enbridge) would be reluctant to speak freely to investigators; doing so might well cost their company a lot of money. The question, however, is whether the same sort of idea applies to other sorts of proceedings, like applications before the MPSC.
Or to put this another way, the question comes down to what, precisely, the sentence in the federal law actually says–because it’s not quite as straightforward as it at first appears. Does that sentence say (a) that a report cannot be admitted into evidence (period); nor can a report be used in a civil action? Or does it say (b) that, when it comes to a civil action for damages, a report cannot be either admitted into evidence or used? See the difference? Obviously, Enbridge argues for “a”– as Gary Field nicely puts it at the hearing, “Mr. Ashton wants to put a period after the first verb”– and the intervenors argue for “b.”
For her part, Judge Sheets says that she does “acknowledge that the language of the statute can be interpreted in two ways.” Yet she also says that she interprets the language “very similarly to the manner in which Enbridge” interprets it. “I think that the language, while it may be a little unclear, I think that that’s the intent,” she says. (Upon what basis she determines this “intent,” however, she does not bother to say.)
But here’s the thing (and this will bring us back to Michael Orris): it’s obvious why Enbridge attorneys favor interpretation A just as it’s obvious why the intervenors’ attorney favors interpretation B. Both of those parties are, by definition, partial. But what about the MPSC attorney? He represents neither the party seeking approval (Enbridge) nor the party seeking to deny approval (the intervenors)? Rather, he represents only the MPSC, whose only interest, presumably, is the collective interest of the citizens of the state of Michigan. What, therefore, would one expect his position to be?
We can think of a couple of possibilities: (1) he could take no position at all, but choose to remain neutral and leave it to the Judge to decide. That would be understandable. Or (2) he could acknowledge the ambiguity in the federal statute (and it is unquestionably ambiguous) and choose simply to err on the side of caution. In this case, erring on the side of caution would almost certainly mean allowing the report into evidence. After all, how can anyone argue that considering MORE information, rather than less– especially when it is information pertaining to the very pipeline that Enbridge is seeking to replace– is bad for the public interest? If the “replacement” of Line 6B really does satisfy the three standards upon which the MPSC must make its decision, it ought to be able to satisfy those standards even in the face of MPSC scrutiny of a factual report released by a federal agency. Right?
Well, no. Following Ashton’s objection to any discussion of the NTSB report, Judge Sheets asks, “any comment by Staff (meaning Orris)?” And here is a part of Orris’s semi-coherent reply:
This report, statute controls whether this report comes in, not what it says on the cover sheet of this report. The statute is a controlling language. I do not think that this report is evidence, can be admitted as evidence in this proceeding. The orders themselves speak for themselves of what Enbridge is going to do to operate the line. This is just background information telling the National Transportation Safety Board and telling the Pipeline Hazardous Materials Safety Administration, who formed the basis for it, but the correction, the corrective action orders are themselves what Enbridge is going to do, not the content here. What Enbridge did in the control room there has nothing to do with Public Act 16 of 1929.
Apparently, even Judge Sheets found this convoluted reply a little unclear because she then asks, “So you think there’s a relevancy issue here as well?” To which Orris responds, “Yes. Yes, I do. I think the statute quite clearly states that this is not evidence, it’s not relevant to the proceeding.” Now obviously, Michael Orris is entitled to his professional legal opinion on a matter of dispute such as this one– and that opinion does not always have to be the same as ours. But to suggest that the language of the statue “quite clearly states” anything (the lack of clarity in the language is the whole reason there is a dispute in the first place!) is just plain disingenuous. At best, it’s a judgment call.
But because of Orris’s argument, siding with Enbridge (at least in part), Sheets decides to sustain the Enbridge objection, which she says, “was essentially seconded by Staff,” and she rules that the report “will not be admissible in these proceedings.”
And this is precisely the problem– with Orris, with Warner, with the MPSC itself: “Staff” invariably “essentially seconds” the view of Enbridge. Orris neither questions nor challenges anything Enbridge witnesses say, for example, but repeatedly objects to Gary Fields’ questions during cross-examination of Travis Warner. And like his view on the admissibility of the NTSB report, those objections almost always have to do with narrowing and limiting the scope of the proceedings; they involve the exclusion, rather than the inclusion of information or comment. It’s as if Orris views his job as ensuring that the MPSC permits the hearing of as little evidence as possible, ensuring that it takes the narrowest, most limited view possible of its regulatory function.
Of course, this is exactly the strategy employed by Enbridge, both inside and outside the MPSC: the less discussion, the better; the less scrutiny, the better; the less the public knows, the better. It’s easy to understand why Enbridge would take this view: they don’t always look so good in the bright light of the facts. But why those who are supposed to work on behalf of the public interest (not Enbridge’s interest), those whose salaries we pay, would take the same view as Enbridge is more than just baffling; it’s betrayal.
by Jeffrey Insko | Dec 12, 2012 |
Pipeline companies have a way of turning ordinary people into activists. Yesterday, we learned about one of these with the news that a Texas judge halted construction on the Keystone XL pipeline. An ordinary citizen, Michael Bishop, taught himself a bit of law and went to court, producing a very clever argument. It worked (at least temporarily).
Bishop’s argument, challenging whether tar sands oil (or “dilbit) is in fact “crude oil” as defined by Texas and federal law, put us in mind of a not-dissimilar argument some clever folks advanced here in Michigan a few months back. We wrote about it at length here.
And our friend Anthony Swift of the National Resources Defense Council has a new post about the Texas decision. It reminds us of Anthony’s coverage a few months back of how the IRS handles the question of whether dilbit is different from ordinary crude. Check it out.
Three cheers for Michael Bishop!
by Jeffrey Insko | Dec 7, 2012 |
Over at the Brandon Citizen, Susan Bromley, who has covered this story like no one else, has an account of Monday’s Brandon meeting and a bit more detail on the agreement. Much of it covers the items we mentioned in the second installment of this series. But we did learn from Bromley that Enbridge is footing the bill for the legal costs Brandon incurred during this process– and that’s excellent news.
The article also includes plenty of hollow statements from Enbridge spokesperson Jason Manshum, the same sort of boilerplate remarks we’ve heard from him for months. (We’ll grant him this much: the guy stays on message.) Honestly, after all that has happened these past few months, after all we’ve learned, all we’ve documented here on this blog, and all we have experienced, we fail to see how once again saying, “”We value our relationships with all those who live and work along our pipeline right-of-way and will be working hard to minimize the impacts on the community and the affected landowners,” is even remotely helpful to anyone. As we’ve said before, just repeating something over and over and over doesn’t make it true.
Anyway, Bromley’s article also captures nicely some of the drama of the meeting, drama which took place mainly at the very end. We’ll quote a bit of that in just a moment, but we’d also like to provide just a tiny bit of setup:
It became clear by the end of Monday’s meeting that Enbridge wasn’t going to leave without an agreement. Why? Well, our theory is this: t once federal district court Judge Cleland sent the case back to state court, Enbridge felt a renewed sense of urgency. Originally, they thought dragging the POLAR lawsuit into federal court would sink it. When that didn’t happen, they needed to scramble to ensure that Brandon did not intervene again– because a state court would be far more likely to take interest in the statutory and constitutional argument put forth by both Brandon and POLAR (and the MTA). In order to prevent further delays (not to mention to risk losing!), Enbridge needed to reach an agreement with Brandon– which explains why they were so much more agreeable last Monday than they were back in, say, August.
That’s mainly speculation on our part, though we suspect it’s reasonably accurate. Whatever the case, it was obvious that Enbridge thought matters were pretty urgent at the Brandon meeting on Monday. And that induced in us a bit of déjà vu. After all, this is pretty much how our private negotiations with Enbridge went. For months, Enbridge dragged their feet. Weeks would pass by without any word from our ROW agent. But then all of a sudden, six months in, Enbridge decided that matters were urgent. They were suddenly in a big hurry and needed to reach an agreement immediately. So they snapped into action, pressured and threatened. They were determined to get their agreement. And they did.
And this is what it was like at the Brandon meeting. Here’s Bromley’s account, which picks up after the board returned from their closed session and discussed amendments to the agreement:
When Trustee Ron Lapp said he wanted to see the finished document before he approved it, Rumball, Trustee Dana DePalma and Clerk Candee Allen all agreed. But near the end of the meeting, after Cooney spoke in support of the agreement, the board had an apparent change of heart.
“I have complete confidence in Stuart (Cooney),” said Lapp, who then addressed Curwin, Enbridge Project Manager Tom Hodge, and the Enbridge attorney, asking: “Is it going to give you heartburn to wait seven more days?”
In unison, the Enbridge representatives answered “yes,” and Axt expressed disbelief that the board was expediting the process on behalf of Enbridge rather than the township residents.
The board then unanimously approved settlement, clearing the way for phase one of the project in the township to proceed.
This was a pretty dramatic moment, to which we’ll add just one little detail. When it appeared that the board members were going to ask to see a final document before approving it, Enbridge attorney Mike Ashton jumped up, approached Stuart Cooney (who was sitting right next to us), and asked if they could finalize the language of the agreement “right now.” He and Cooney then walked out. It was after this little tête-à-tête that Cooney spoke to the board.
Now, we should be clear: we’re not suggesting something nefarious went on here, just that Enbridge put on the full court press– and it worked. Yet just like in our own negotiations, the delays that caused Enbridge to become so impatient and so desperate to reach an agreement with Brandon were always of their very own making.
There’s just one last story to tell in this series until we see the final agreement: our conversation that same night with Hodge, Curwin, and Ashton. That’s coming soon…
by Jeffrey Insko | Dec 5, 2012 |
A couple of interesting news items worthy of your attention:
First, yesterday’s NPR program “Stateside” featured a segment on the use (and perhaps abuse) of eminent domain. And guess what company was the primary subject of the discussion? Our friends Carol Brimhall and Connie Watson are featured in the story. Following the piece is a conversation with attorney Alan Ackerman, who has represented Line 6B landowners. At the end of the piece, Ackerman provides an example of a company that has done things right. Who, you ask? Well, it shouldn’t come as a surprise given who took the time to talk with us at the Pipeline Safety Trust conference last month.
The second item is an article in the Livingston Daily Press & Argus featuring Connie and Tom Watson— fine, decent, kind, ordinary people. Do they look like a “special interest group” to you? Do they strike you as people who will just “never be happy.”
