The ET Rover news in the last week or so has not been good. First, Lapeer prosecutors performed some very shoddy legal research which led them to issue a misinformed, Rover-friendly memo regarding Rover’s right to survey. Our guess is that some crafty ET Rover lawyer whispered some sweet legal nothings in the prosecutor’s ear, seducing him into adopting Rover’s (mistaken, we believe) view of the law.
Meanwhile, some ET Rover executives had a sit down this week with some local officials and state representatives. At a meeting at the Groveland Township offices (that’s our township), ET Rover officials met with a half dozen township supervisors, State Senator Dave Robertson, and State Representative Joseph Graves. According to Groveland Supervisor Bob DePalma, ET refused to hold a public meeting. Frankly, that’s unsurprising: refusing to communicate openly with the public is typical of the industry (because they’re both secretive and cowardly). Enbridge did the same thing.
It’s hard to get too worked up about ET Rover’s tactic, which, while reprehensible, is totally predictable. What’s more infuriating about this is the fact that the township supervisors agreed to play by ET Rover’s rules instead of calling their bluff. The supervisors could have (and should have!) just refused to have a closed door meeting, then informed FERC and the press about Rover’s unwillingness to deal openly with Michiganders. We’re reasonably confident Rover would have caved, just like Enbridge did.
The same goes for Lapeer County Commissioners, who also gave in to Rover’s stealth approach and participated in a similar closed door meeting. But that meeting appears mainly have to confused matters, rather than providing any clarity (more on this soon).
In better news, Rep. Graves has organized a Town Hall meeting for this coming week, Oct. 15 at Holly High School from 6:30 to 7:30 p.m. Evidently, Rover has not accepted Graves’s invitation to participate– because, as we said above, they are cowardly. A Town Hall is a great idea and we’re glad it’s happening, even though we have a conflict and can’t attend. On the other hand, we’re more than a little worried about what kinds of information will be presented at the meeting. It’s not clear who is going to be in charge of this town hall and how knowledgeable those persons are.
For example, we understand that Graves has invited a representative from the Michigan Public Service Commission “to give a broad outline of property owners’ rights.” Honestly, we find that prospect terrifying, for several reasons. First, the MPSC has no role to play whatsoever in regulating interstate natural gas pipelines, so they’re an odd choice to participate in this town hall to begin with. Secondly, even in those areas where the MPSC does have a role, they really don’t have much to do with property rights (although we think they should). Lastly, even worse is that we can tell you from experience that the MPSC is no champion of property rights; frankly, they seem to us rather indifferent to them (see our full series on how the MPSC failed Line 6B landowners). So while someone from the MPSC might be able to provide some general remarks about eminent domain– the sort of thing you can get from, say, the Pipeline Safety Trust or FERC’s Citizens’s Guide, they certainly are not going to be equipped to speak about the realities and complexities of negotiating easements and preparing for a pipeline construction project on your land. Put simply, an MPSC rep is a bad choice for this very important task.
We’re going to write to Rep. Graves today to share our worries about the meeting. And we’re encouraging some people we know who really are informed to attend. Hopefully, this will help counteract or clear up any incomplete or bad information.
Unfortunately, that little problem only points to an even bigger one, which involves the way (mis)information about projects like this is parceled out by various parties, some of whom may not be trustworthy (the pipeline companies), some of whom are a bit too inclined to believe those who aren’t trustworthy (state representatives and regulators), and some of whom may not be sure what to believe or may not understand these complicated processes (local officials, ordinary citizens). This is a serious problem, one that, if news accounts are accurate, is illustrated vividly by last week’s closed door meetings. The remarks by some of the officials who attended those meetings seem to indicate that at least some of those officials are either confused or credulous. Either way, that’s not going to allow them to inform vulnerable landowners and concerned citizens very helpfully.
We’ll discuss specific examples of this confusion and credulity in a follow-up post. In it, we’ll try to bring a little more clarity and accuracy to some not-so-clear and not-so-accurate statements we’ve seen in newspaper accounts about those exclusive meetings between Rover reps and local officials. Please stay tuned.
There’s been a lot of news about ET Rover this week, owing to an unfortunate incident in which their survey crews entered or tried to enter the properties of some landowners without permission, in one case sparking a potentially dangerous confrontation. It’s unfortunate that it’s come to this, though it was also probably inevitable. ET Rover’s ham-handed dealings with landowners have done nothing but fuel the understandable frustration and anger of landowners. We hate to say “we told you so,” but several months ago, we told ET Rover that the industry’s thoughtless routine ways of communicating with landowners were not going to go over well here in southeast Michigan. They clearly did not listen to us.
At the center of this week’s story, however, is a legal question that we’ve addressed, though only briefly, before. ET Rover is claiming that they have the right under Michigan Law to enter private property to conduct surveys without landowner permission. Here is spokesperson Vicki Granado just this week:
“We do have, under Michigan Compiled Law, the right to enter, knock on the door and, if the landowner isn’t home and we’re following specs, we do have the right to enter,” ET Rover spokeswoman Vicki Granado said. “Again, if the landowner tells us that they don’t want us surveying (we won’t survey).”
And here is Granado in a different article this week:
“We have consulted with many attorneys and many sided with Rover in this particular process,” said Granado. “We have the right to conduct surveys and have given proper notification to landowners we are needing to survey. We would much rather do it in cooperation, that is our goal, but we do have permission from the state. They are not trespassing.”
Setting aside the legal question for a moment, Granado’s comments strike us as a bit contradictory. In the first one, she indicates that Rover won’t survey if the landowner does not give permission– even though this week’s incidents prove that statement not to be true. In the second remark, Granado seems to suggest the opposite: that ET Rover is going to conduct surveys even if landowners do not cooperate. Regardless of the legalities, we have to say that we think that is very bad policy. That sort of aggression and disrespect for property rights is only going to inflame landowners. In fact, even the natural gas industry’s main trade organization agrees with us on this point. The Interstate Natural Gas Association of America (INGAA) recommends avoiding trespass without landowner authority: “Trespassing by pipeline or contractor personnel should be avoided; approval by the landowner or duly authorized state agency of court is required for access to the right-of-way.” (See page 13 of this document)
So ET Rover appears to be violating their own industry standards. But are they violating the law?
In letters to landowners and comments to the press, ET Rover cites Michigan Compiled Law 213.54(3) as granting the company the right to survey without landowner permission. The law they point to is the state’s Uniform Condemnation Procedures Act (UCPA), passed in 1890, which stipulates “procedures for the condemnation, acquisition, or exercise of eminent domain of real or personal property by public agencies or private agencies; to provide for an agency’s entry upon land for certain purposes; to provide for damages; to prescribe remedies; and to repeal certain acts and parts of acts.”
The section of the law that Rover cites might, at first glance, appear to support ET Rover’s position. Here’s part of what 213.54(3) says (this is the part ET Rover thinks applies to them):
(3) An agency or an agent or employee of an agency may enter upon property before filing an action for the purpose of making surveys, measurements, examinations, tests, soundings, and borings; taking photographs or samplings; appraising the property; conducting an environmental inspection; conducting archaeological studies pursuant to section 106 of title I of the national historic preservation act, Public Law 89-665, 16 U.S.C. 470f; or determining whether the property is suitable to take for public purposes. The entry may be made upon reasonable notice to the owner and at reasonable hours.
There’s a serious problem with Rover’s citation of this section of the UCPA. As Atlas Township attorney David Lattie points out, ET Rover is ignoring another part of the law, 213.54(4), which says this:
(4) If reasonable efforts to enter under subsection (3) have been obstructed or denied, the agency may commence a civil action in the circuit court in the county in which the property or any part of the property is located for an order permitting entry. The complaint shall state the facts making the entry necessary, the date on which entry is sought, and the duration and the method proposed for protecting the defendant against damage.
So it would appear that the best case scenario here, for ET Rover, is that if they’re right and Michigan law does give them permission to survey, they can ONLY do so after first obtaining a court order. ET Rover has NOT received any court orders.
However, theres’ an even bigger problem here, one that even Atlas Township attorney David Lattie overlooks. Both Lattie and ET Rover seem to take for granted the idea that ET Rover qualifies as the sort of “agency” described in the statute above. However, they do not, which means that the very law ET Rover cites does not apply to their activities at all. Here’s why:
The first section of the Act (213.51), provides a list of “definitions” of the key terms used in the Act. One of them, of course, is “agency”– since it is an “agency” to which the part of the law ET Rover cites applies. The definition of an “agency” according to the Act is as follows:
(c) “Agency” means a public agency or private agency.
Because that definition isn’t terribly helpful, the terms “public agency” and “private agency” are also defined. And since ET Rover is obviously not a public agency, we’ll just give you the definition of a private one:
(h) “Private agency” means a person, partnership, association, corporation, or entity, other than a public agency, authorized by law to condemn property.
The important part here is “authorized by law to condemn property.” That means having the legal right of eminent domain (condemnation is the legal term for exercising eminent domain). ET Rover– this is an unassailable fact– does NOT have the legal right of eminent domain. They have NOT been “authorized by law to condemn property.” That authorization is what the FERC application process is for. If FERC approves ET Rover’s application– an application that Rover has not even filed yet— then and only then will ET Rover be “authorized by law to condemn property.”
What that means, then, is that ET Rover clearly– according to the plain language of the very statute they cite– does not meet the definition of a “private” agency (and hence an “agency.”) So while it is true that a private agency can get a court order to survey your property without your permission, ET Rover cannot do so because– again– they are NOT a private agency according to the law.
So ET Rover is either just plain wrong or they are willfully distorting the law for their own purposes. Of course, we can understand why they might think they qualify as a “private agency,” since in their mind receiving approval from FERC (and hence being granted the power of eminent domain) is a foregone conclusion. That’s how oil and gas companies think–and with good reason, given our industry-friendly regulatory agencies. It’s why Enbridge ran around invoking the power of eminent domain in front of Line 6B landowners– they did so with us– before they were even given that power by the MPSC. Here, ET Rover seems to be doing the same thing.
Of course, we’re not attorneys (though we sometimes play one on this blog). Sooner or later, some smart lawyer (we know who we’d like that person to be!) is going to have to make some version of the argument we’ve made above in front of a judge somewhere in order to bring some kind of clarity to this legal matter. Perhaps a township attorney like David Lattie will do it. But if he does, we hope he does not concede the crucial point– not about whether the UCPA gives ET Rover the right to survey that they claim, but whether the UCPA applies to ET Rover in the first place. We think it’s plain that it does not.
Now, here’s a coincidence: the very same week that Energy Transfer Partners announced a massive new pipeline construction project that will affect a large number of Michigan citizens– including, evidently, many Line 6B landowners– state officials announced the formation of a new pipeline safety task force.
You might think that’s good news– and at first glance, we thought so too. But then we saw who is on that task force, or rather, who is NOT on it. The task force is made up entirely of representative of the very agencies that have thus far failed to protect landowners, municipalities, and the environment. Frankly, it’s outrageous.
For that reason, just this morning, we sent the letter below to Attorney General Schuette and Michigan DEQ Director Dan Wyant. Please feel free to share.
Dear Mr. Wyant and Attorney General Schuette,
This week, the Texas-based pipeline company Energy Transfer announced plans to build a new network of pipelines to transport natural gas from the Marcellus and Utica shale formations in West Virginia and Pennsylvania across the country. Nearly two hundred miles of that pipeline network would traverse Michigan, much of it crossing through the property of Michigan citizens already reeling from the recent replacement of the Enbridge Line 6B pipeline. During the latter project (which is still not complete), landowners have been mistreated, lied to, misinformed and have watched helplessly while Enbridge uprooted their lives, destroyed their property, and abused its easement rights. Many local officials had similar experiences, as Enbridge evaded local ordinances and treated townships and municipalities with disregard (at best) or disrespect (at worst). To my knowledge, neither the Attorney General’s office nor other state officials or agencies have taken even the slightest interest in this series of events .
I mention these facts as important background and context for your announcement, also this week, of a new pipeline safety task force. Although it is a very late-arriving development, I welcome this news, especially considering the many oil and gas expansion projects planned or already in progress across the state.
Having said that, it is more than a little distressing to learn that the task force that has been assembled includes not a single landowner advocate, local official, or other member of the general public (much less a representative from an environmental or conservation group)– all people who have a profound stake in protecting public health and the environment. Landowners and local officials, in particular, are on the front lines of these pipeline projects. They are the people who assume virtually ALL of the risks of these expansions (yet earn none of the rewards). They are also the people most familiar with the conditions on the ground– private property and natural resources– where many of these pipelines will be placed. In addition, they are the same citizens, as you well know, whose interests your positions exist to protect. They deserve a seat at the table and a strong voice in these matters.
I realize that pipeline operators’ dealings with landowners and local governments may not be central to the task force’s mission. However, recent experience has shown clearly that the way pipeline companies treat these stakeholders reflects the way they operate their pipelines, which affects the safety of those pipelines. Given the terrible incident in 2010 in Marshall, I’m sure you can appreciate the many and varied concerns Michigan citizens have about further oil and gas development in our state. Those concerns include a widespread perception that state officials and regulatory agencies are working more on behalf of corporate interests than on behalf of ordinary citizens. Routing and permitting decisions, for instance, already in effect exclude the very people who are most directly affected by those decisions. Excluding these citizens from this task force will only further alienate them and do little to change perceptions that state agencies fail to understand the affects their decisions have on the daily lives of regular people.
It is worth noting that a great many Michigan citizens have been working toward the goals the task force has set for itself for quite a long time. In fact, there are currently three Michigan residents (including myself) on the Board of Trustees of the national Pipeline Safety Trust. In addition, the recent “replacement” of Enbridge’s Line 6B has created a large group of citizens with first-hand experience of pipeline planning, permitting, and construction. Their experience is an invaluable resource. In short, you should have no trouble finding any number of committed, knowledgeable, thoughtful, and collaborative-minded members of the public to participate on your task force. I implore you to seek them out.
As some of you know, we were fortunate enough to participate in a forum about tar sands oil development in the Great Lakes Region a couple of weeks ago. Organized by our friend, fellow Line 6B landowner, and Notre Dame University professor Patricia Maurice and hosted by the John J. Reilly Center for Science, Technology, and Values.
Patricia and I were joined by MSU’s Steve Hamilton, who has been a consultant on the Kalamazoo River cleanup, and Beth Wallace, who you surely know by now. Each of us presented for 15 or so minutes and then we took questions from a wonderful and wonderfully-engaged audience.
We thought the event was a smashing success. The room was full and the audience interested, each of my fellow panelists was smart, passionate, and informative. We were even able to meet some people face to face whom we’ve only interacted with through the magic of the internet. It was wonderful to put some faces to some names. Our only regret (but not a surprise), no one from Enbridge attended. Still, the forum went so well that we are hoping to reprise it elsewhere in the months to come. Stay tuned.
In the meantime, you can watch the whole thing online, thanks to Prof. Greg Madey for filming and to Notre Dame’s engineering pubs/graphics crew for getting it posted online:
Thanks, finally, as well to all who attended and, especially, for Patricia for her warm hospitality and her hard work bringing everything together.
Welcome to 2014 everybody! In the spirit of the New Year, we’re taking a bit of time to look back by counting down our Top Ten posts of the year that just was. If you missed the bottom five, you can read about them here. But just to recap them quickly:
10. Line 6B Earns Pulitzer Prize
9. Pet Coke
8. Red Herrings
7. How Not to Write About Line 6B
6. IJNR Kalamazoo River Institute
Now on to the final five:
5. PHMSA. Last summer, we were lucky enough to be invited by the National Wildlife Federation to participate in a lobbying “fly-in” to ask some of our elected officials to support the NWF petition seeking some new rules on pipeline safety from PHMSA. We also wanted to meet with PHMSA officials themselves, but they declined. This did not please us, especially since, in our view, PHMSA is already far too insulated from the concerns and viewpoints of ordinary citizens– as opposed to the concerns and viewpoints of industry. We’ll have much more to say about PHMSA in 2014, especially once we return to writing about the PS Trust conference last November. And we are likely to once again adopt the tone of this post that we wrote upon our return from the D.C. trip.
4. Enbridge Thinks EPA is Stupid. Among the more astonishing Enbridge blunders of the last year was their hapless, thoughtless, tone-deaf, corner-cutting attempt to secure a dredge-site plan in Comstock Township so that they could complete the Kalamazoo River cleanup according to the deadline set by the Environmental Protection Agency. In addition to attempting to skirt local zoning ordinances, they also managed to agitate the owner of one of the state’s best breweries and as a result found themselves in a bit of a pickle. Then, in order to get out of the pickle they found themselves in, Enbridge Vice President Richard Adams went and crafted one of the most desperate, disingenuous, counter-factual, values-violating letters imaginable to the EPA asking for more time– as if the EPA were somehow completely unaware of the facts on the ground. Fortunately, the EPA turned out not to be as blind, gullible, and stupid as Enbridge evidently thought they were.
3. Why Enbridge Can’t Do Better. If you just went and re-visited that little episode, you might be wondering to yourself, as we have on countless occasions, why in the world Enbridge conducts itself this way, why they can’t just do things right, why they can’t act according to– not in opposition to– their professed values. This is something we’ve pondered long and hard, far too much really. In fact, it’s something we’re going to ponder some more in the next week or so as we tell you a little about Enbridge’s just-released “Corporate Social Responsibility Report” for the past year. But back in June, we pondered it somewhat systematically in a series of posts that considered a number of possible theories for why Enbridge behaves the way it does. We’re not sure we arrived at any clear conclusions– but we think our hypothesis rests on some pretty firm evidentiary and experiential ground.
2. Enbridge Re-writes Michigan Law. One would reasonably think, after a disaster like the Marshall spill and all we know about its causes, that public officials and regulatory agencies would scrutinize the company responsible for the disaster very carefully, that those same officials and agencies would be skeptical, hyper-vigilant, extra-tough. But one would be wrong– at least here in Michigan. From the governors (outgoing and incoming) on down, almost no one in a position of authority at the state level uttered a word when Enbridge launched its “replacement” project. Frankly, in our view those officials– especially the Governor– are partially responsible for the nightmare so many landowners have had to endure over the past two years. Or, if we’re being generous, perhaps it’s just that they believed the Michigan Public Service Commission, the agency responsible for approving pipeline projects and entrusted with the solemn power to bestow upon private corporations the power of eminent domain, would do its job.
But one of the biggest stories of the past year is the story of how the MPSC did NOT do its job, failing miserably to protect the public interest and playing the role of Enbridge’s flunky. This became clear during the Phase Two MPSC proceedings, which we covered and wrote about at length, mainly in this series detailing the laughable efforts of their public engineer, the MPSC staff attorney’s seeming advocacy for Enbridge’s arguments, the Administrative Law Judge’s background and Enbridge-friendly rulings, the gloating, mean-spirited, unprofessional final ruling, and more. Frankly (if you’ll forgive us for saying so), we think it’s the most important stuff we’ve written. That’s because, procedurally speaking, in Michigan the MPSC is the only line of defense for landowners and the environment. But rather than working for us, they went to bat for Enbridge. How that happened is a disturbing tale that was never really covered in any detail in the press (save for Inside Climate News). So if we had to choose just one single post that we wrote in 2013 that everyone should read, just one post that Beth Wallace’s mom should send around in one of her promotional blitzes, it would be this one. In it, we explain how Michigan public officials, along with a local Michigan law firm (Fraser Trebilcock Davis & Dunlap) worked together to sell out their fellow citizens to a Canadian corporation and its industry colleagues for years to come.
And yet, not even that vitally important story is #1 on our list. What could possibly top that? We’ll let you know in a final installment coming soon!
Dearest Line 6B readers,
Wanna get involved? This week, you’ve got two opportunities. Check them out:
- At noon on Sunday (July 14th), “Oil and Water Don’t Mix: A Rally for the Great Lakes” will be held at Bridge Park in St. Ignace (just over the Mackinac Bridge). The rally is to call attention to the dangerous aging pipeline owned and operated by Enbridge that runs under the straits of Mackinac. Our friend (and official hero!) Beth Wallace has worked very hard to bring attention to this serious threat to the health of the Great Lakes. And 350.org founder Bill McKibben will the be the keynote speaker at the rally. If you’ve got time and want to take a drive up the the beautiful bridge, please try to attend. More details can be found here. (And when the rally’s over, we recommend you go get yourself a burger at Clyde’s!)
- Or if you’d rather just make a phone call or write a letter, our marvelous friends at the Pipeline Safety Trust are working this week (and testifying before a congressional committee) on pointing out some serious deficiencies in a piece of legislation known as the “Natural Gas Pipeline Permitting Reform Act.” This is an industry-friendly, landowner-unfriendly bill designed to “streamline” the approval process for interstate pipelines. As you can imagine, the Trust– and we agree vehemently– thinks this is a bad idea. If you’ve read anything here about the pitiful state of federal pipeline regulations or the Michigan state regulatory process, you already know that the last thing these processes need is “streamlining” (which is really just another term for deregulation!). In our view, they are already WAY too streamlined. To take just one little example that we’re sure you’ll find alarming, the bill would simplify the process for eminent domain authorization, making it that much easier for private companies to take indiviuals’ property, severely limiting landowners’ ability to protect their rights. Members of the committee currently considering the bill can be found here. Please write to your representative and urge them to work on behalf of landowners and ordinary citizens, not large corporations!
While not directly about Line 6B matters, we’ve encountered a number of tangentially-related material the past couple of days deserving of your attention, not least of which are some follow-ups to the awful spill in Arkansas, a terrible, vivid reminder of why all of us should be deeply concerned and continue to speak up and help foster public discussion of pipeline safety.
Some of our favorite journalists are on the case. Over at her “Riding the Pipelines” blog, Elana Schor provides some interesting— and disturbingly familiar to those who have read the NTSB report on Marshall–background on Exxon’s safety record with regard to the Pegasus line that just burst.
And Lisa Song, who has evidently been extraordinarily busy the past few days, has a terrific article at Inside Climate News linking the Arkansas spill to the recent petition to the EPA and PHMSA filed by the National Wildlife Federation and others for stricter regulations of tar sands oil transport. What caught our eye in particular was this:
The section of the pipeline involved in Friday’s spill in Arkansas was originally built in the 1940s, according to an Exxon spokesperson. The full length of the pipline was used to transport crude oil from Nederland, Texas north to Patoka, Illinois. After lying mostly idle for four years, the pipeline’s flow was reversed in 2006 to carry Canadian dilbit to Gulf Coast refineries. Exxon said the reversal was an industry first, and that it required 240,000 man-hours of work to accomplish.
That’s right: Exxon reactivated a 66 year-old, 20-inch pipe so that they could pump diluted bitumen through it, which must be sort of like sucking peanut butter through a paper straw. And of course, considering that there’s a soon-to-be-idle line in our backyard right now, these examples of pipeline reactivation make us very, very nervous.
Closer to Michigan, the Detroit Free Press has just run two very interesting articles: one about the state of gas pipelines in Michigan and the costs (and difficulties) in repairing them and the second about the dreadful regulatory situation regarding those same lines. The Freep had the good sense to call up our friends at the Pipeline Safety Trust. In the first article, Executive Director Carl Weimer points out the primary difficulty when it comes to repairing these lines (and ensuring public safety!): “What it comes down to in most every state we’ve looked into is, who is going to pay for that replacement?” he said. “It often gets passed along to ratepayers, and public service commissions hate to do that because they catch a lot of grief.” And speaking of the public service commission (which certainly wouldn’t want to catch any grief!) in the second article, the PS Trust’s Rebecca Craven (another of our heroes) notes that the commission’s general haplessness (that’s our characterization, not Rebecca’s) is compounded by the same woeful lack of staffing and resources that plagues PHMSA and agencies in other states:
“They [PHMSA] simply don’t have the number of inspectors they need to adequately oversee the amount of pipeline in the system, and states are in the same boat,” said Rebecca Craven, program director of the Bellingham, Wash.-based Pipeline Safety Trust, a nonprofit organization that advocates for improved energy transportation safety.
Up in Canada, there’s a great article in the Tyee about pipeline safety and landowner advocate Dave Core, who is the founder of the Canadian Association of Energy and Pipeline Landowner Associations (and yet another of our heroes!). Dave recently gave a presentation to a Canadian senate committee. What he had to say will surely resonate with most readers of this blog. Here’s a little taste:
“My goal this morning is to bring perspective to the issues of landowners when confronted by pipeline companies. That is, the issues when private property owners, like yourselves, come up against government supported and subsidized corporations that are allowed to come packing with government regulations to take our lands, our rights and leave us with annual risks, liabilities, a duty of care that we do not want, costs and the pipeline junk which includes the resulting safety and liability issues of historical contamination and pipeline collapse when the companies pack up and leave.
“Before I proceed I would like you to pretend you are sitting around a kitchen table with your family and a ‘land agent’ has just left you with a brown envelope with a Section 87 Notice, an NEB Regulatory Notice, stating that a pipeline company is going to put a pipeline in your backyard and the easement agreement and the compensation offer are included.
“The stress has only just begun. Next come teams of land agents, the men trained in profiling and in telling every tale they can to get the deal signed while they sit at your kitchen table drinking your coffee. He/she might even be your neighbour’s son or daughter. It is like you have stepped into a spaghetti western with cowboys coming to your door, not packing a gun, but a big smile, lots of lies and packing government regulations that allow them to threaten you if you question them.”
The rest of the article, aptly titled “Pipeline Company Bullies,” is well worth reading.
Also from Canada comes this interesting op-ed in the New York Times, providing a counterpoint to tar sands development boosterism.
And finally, one closer to home. The Livingston Daily Press & Argus ran an article a couple of weeks ago that slipped past our radar (thanks for sending it, Beth Duman!). It’s about the dissatisfaction of some landowners– those good people the Nashes and the Watsons– as construction nears completion. The bad news, however, is that even though the construction phase is coming to a close, a whole new round of likely headaches and difficulties is on the horizon: the restoration phase. You can bet we’ll be on the case.
A couple of weeks ago, we wrapped up our series on the woeful effort the Michigan Public Service Commission puts forth to protect the public interest. We noted the shallow analysis provided by their staff; the staff attorney’s vigorous efforts on behalf of Enbridge; the past work on behalf of industry performed by the Administrative Law Judge; the snide, hostile tone toward citizen intervenors taken by the Commission’s final ruling, and– perhaps worst of all– the way that the Commission (enabled by the ALJ) essentially allowed Enbridge, a foreign corporation, to re-write Michigan law.
It’s an appalling state of affairs, in our view. And while we realize the regulatory matters aren’t the sexiest topic in the world, we think this is a tremendously important story. It’s regrettable that it’s not the sort of story anyone in the media is likely to write about. Boring as it is, this is exactly how important matters (do not) get done.
Which brings us to the latest out of the MPSC (which we learned about thanks to our friend Kim Savage). Turns out, it’s not just Enbridge that gets to disregard the public. The MPSC is happy to grant Consumer’s Energy the same privilege. You see, Consumer’s has applied to the MPSC for their own certificate of public necessity. They want to install some 25 miles of new natural gas pipeline over on the western part of the state.
Now, in compliance with MPSC procedures, Consumer’s is required to send out a Notice of Hearing to solicit filings for public appearances regarding their application– you may recall that this was something of a sticking point with Enbridge’s application. We wrote about it here and here. Anyway, here is the interesting– that is to say, disturbing part: Consumer’s Notice was not sent to even one single individual resident. That’s right, not one. And this despite the fact that as Consumer’s notes in their application, “The Project will cross approximately 4 acres of residential land. Based on a review of aerial photography 11 homesteads were identified as being within 200 feet of the proposed route.” That’s excluding farmland.
How is this possible? How is that Consumer’s can get away with not sending a Notice to those who are likely to be affected by this construction, whether directly or indirectly? Well, it turns out that the requirement for these Notices of Hearings is only that the applicant notify those who IT deems it has not obtained sufficient property rights. The fact that those 11 homesteads in close proximity to the project are going to be affected one way or another– wouldn’t you want to know about a major infrastructure project 200 feet away from your home?– evidently isn’t all that important to the MPSC, and certainly not to Consumer’s Energy. This is how the MPSC serves the public interest.
Note that we’re not talking about any onerous regulations on industry here. We’re talking about what ought to be the very bare minimum: making sure that the general public, and especially those landowners who will be impacted directly, are informed. Is that too much to ask?
This post will likely be the last in our series about the MPSC phase two proceedings. If you missed our previous installments– where we discussed the shallow analysis of their public engineer, the hard work the MPSC staff attorney performed on behalf of Enbridge, the Administrative Law Judge’s background and her Enbridge-friendly rulings, the needlessly churlish and unprofessional tone of the final ruling, and (most importantly) the way the hearings allowed Enbridge to re-write Michigan law–the please check them out. Forgive us for saying so, but we think this series is some of our best work.
In this final installment of our series, we want to consider one last reason why all Michiganders should be concerned about the agency’s toothlessness and its unwillingness even to appear to take as its primary concern protecting the public interest and the citizens of the state of Michigan. What is that reason? It’s the MPSC’s power to grant corporations like Enbridge the right of condemnation or eminent domain.
This is– or ought to be– a solemn power. Private property rights in the U.S. are nearly sacrosanct and therefore the power of government, much less of private corporations, to take or acquire the property of individual citizens should be granted as sparingly as possible and under only the strictest and most limited circumstances and conditions; it is not a power that should be conferred lightly. We suspect that nearly everyone, regardless of political party affiliation or ideological persuasion would agree with that statement.
Indeed, for that very reason, Michigan Act 16— the law (as we’ve discussed before) that grants the MPSC its authority and under which Enbridge sought the right of condemnation– does set in place a set of conditions for granting the right of eminent domain. First, the Act says this:
For the purpose of acquiring necessary right-of-ways, every such corporation, association or person is hereby granted the right of condemnation by eminent domain, and the use of the highways in this state, for the purpose of transporting petroleum by pipe lines, and the location, laying, constructing, maintaining and operations thereof; and such condemnation proceedings shall be conducted in accordance with the same procedure and in the same manner as is provided by the laws of this state for the condemnation of right-of-ways by railroad companies.
But other sections of the Act very clearly limit this power. Specifically, the Act limits this power to those entities that are “common purchasers” and “common carriers.” These two terms mean, respectively, that the entity must purchase any producer’s product (ie, oil) without favoring any one producer or discriminating against any other; and that the entity must carry or transport any product (ie, oil) without discrimination toward one producer or another. So, for instance, even if they wanted to, Enbridge could not, by law, only transport, say, heavy crude from the Alberta oil sands through their pipeline.
Actually, however, that example is not exactly apt here, since what the Michigan law addresses specifically is potential discrimination against Michigan producers. Or to put this another way, it’s not about whether Enbridge is an interstate “common carrier” (which they clearly are; they’re transporting oil, for example, from the Bakken region of North Dakota across state lines into Michigan and elsewhere), but whether they are an inTRAstate common carrier– transporting Michigan products within the state of Michigan.
And this is the problem: Enbridge’s Line 6B does NOT transport any Michigan produced products from one point in this state to another. In fact, they don’t even claim to do so. It’s just a fact. So for this reason, the intervenors in phase two argued that Enbridge does not meet the definition of an intrastate common carrier as required in Act 16. Here is what they said:
There is no evidence in the record that Enbridge is currently operating Line 6B as an intrastate common carrier. When directly asked in discovery whether Enbridge “is” an intrastate common carrier, Enbridge avoided a direct answer and instead stated: “Consistent with Act 16, Enbridge is prepared to meet its legal obligations to provide intrastate common carrier pipeline service within the State of Michigan.” See Exhibit I-2. Thus, Enbridge is clearly not claiming to be operating Line 6B to provide intrastate common carriage.
There is no evidence in the record that Enbridge Line 6B currently can accept purchased Michigan oil from producers in the vicinity of the line. In fact, when asked in discovery to identify locations in Michigan “along Line 6B where Enbridge can accept Michigan-produced crude oil and petroleum,” Enbridge did not identify one location, but simply stated that it is prepared to work with any shipper of Michigan-produced crude oil and petroleum at any safe and appropriate location along Line 6B. See Exhibit I-8. There is no evidence in the record that the new Line 6B is being designed in a manner that would enable Enbridge to transport or purchase Michigan oil. Further, Staff’s witness admitted that he had no knowledge that Enbridge had any plans to transport Michigan oil through Line 6B. (Tr 491)
In the same brief, the intervenors’ attorney (Gary Field) then goes on to explain– clearly and persuasively, in our opinion– that Act 16 was designed specifically to regulate pipeline companies within the state which function as public utilities (purchasing and carrying oil from various producers so that every company does not have to install its own pipelines and thereby minimizing the number of operating pipelines in the state, reducing dangers and disruptions). Field puts it this way:
Because oil pipelines were required by law to serve others and because they were restricted from charging rates for such service as high as they otherwise could have demanded from captive customers, such pipeline companies are public utilities. In turn, because such companies functioned as public utilities and served the public good, the Legislature deemed it appropriate to facilitate such companies’ ability to perform their public duties by permitting the Commission to grant such companies the privilege of condemnation by eminent domain.
However, Enbridge’s interpretation of Act 16 would have the Commission believe that the Act’s only purpose was to grant oil pipeline companies the privilege of condemnation. However, because Enbridge has not demonstrated that it has any plans to ever perform public utility functions under Act 16, Enbridge is not entitled to be granted, pursuant to Section 2, the right of condemnation by eminent domain. . . for Enbridge to be entitled to a grant of the right of condemnation by eminent domain, it should be required to show, at minimum, that compliance with all provisions of Act 16. . . is likely to occur in the near future.
What was Enbridge’s response to this argument? Well, they cited a 1954 case and then said, simply, “By explicitly accepting the requirements of Act 16, Enbridge has agreed to comply with all the requirements of Act 16 and this is sufficient to show compliance with the requirements of the Act.” In other words, Enbridge say that while they may not be acting as a common carrier at the moment, they promise they will if anybody asks them to in the future.”
And that response was plenty good for the MPSC. In fact, the Commission gave the intervenors’ common carrier argument very little consideration. Mainly, we think, this is because it did not fit very easily into their– er, that is, Enbridge’s– narrow three-part framework. As a result, in the Commission’s order approving the application, they bury their discussion of the common carrier argument in a footnote, which says,
Although the record is clear that Enbridge is not now an intrastate common purchaser or an intrastate common carrier, the Commission finds that there is ample evidence that Enbridge would perform such activities if called upon to do so. Indeed, Enbridge has agreed to be bound by all of the legal requirements of Act 16. See, 6 Tr 311 and 479 and Exhibit I-2.
So what’s the lesson here? Well, for one thing we thought this was one of Gary Field’s most interesting, and perhaps even compelling, arguments. That’s because it sought to give Act 16 some real bite; it presented the Commission with the opportunity to construe Michigan state law as granting them some real authority, especially in the face of Enbridge’s repeated reminders that liquids pipelines are regulated at the federal level, etc., etc. And perhaps even more interesting, the common carrier argument also sketched out, theoretically at least, a different pathway for approval, a path that did not adhere to the overly-simplistic “for or against” way of thinking about this project that has been driving us bonkers for months and one that lets Enbridge have their new pipeline without giving away the store. Just imagine for a moment this possibility:
The MPSC grants Enbridge approval for the project but does NOT grant them the power of eminent domain on the basis of the fact that they are not a common carrier. What would happen then? How would that affect the way that Enbridge deals with local municipalities? with individual landowners? What would Enbridge have had to do to acquire new easement rights or access to temporary workspace if their ROW agents could not come to your door armed with the power of condemnation? How differently would you have been treated? How much more seriously do you imagine your concerns would have been taken? How much more value would they have had to place upon your trees, your time, the disturbance to your home and your family? It’s an intriguing, dream, no?
Phase Two Proceedings, Part 3.1
In part 3 of our current series on the MPSC, we told you a little about the career background of Theresa Sheets, the Administrative Law Judge appointed to oversee Enbridge’s phase two application. While we think that background is notable– after all, it’s not unlikely that one’s professional experiences might, inevitably, condition the way one thinks about certain matters– we never really set out to dwell on that point. We did, however, set out to dwell on the way (in our view) that Judge Sheets has done Enbridge’s bidding. In fact, we left off that post with this statement:
Enbridge attorneys have labored to limit the scope of the MPSC’s authority so severely as to cripple it– and Judge Sheets has helped them succeed.
Let us explain. If you’ve been paying attention to last week’s news about the MPSC’s approval of phase two, you may have noticed the following statement, found in the MPSC press release announcing the decision:
In approving the company’s application, the MPSC said the pipeline will serve a public need, is designed and routed in a reasonable manner, and meets or exceeds current safety and engineering standards.
Now these three simple criteria– presumably the basis upon which the MPSC made its decision– might at first glance appear to be benign and even reasonable. But the scary fact is that they are anything but benign. This framework has been, in the hands of Enbridge attorneys, a cudgel– a cudgel with which Enbridge has beaten the MPSC, Judge Sheets, and Michigan law into submission.
You see, the MPSC’s regulatory authority derives from a 1929 Michigan law known as Act 16 (we discussed this briefly in part one of this series, but regret that we were a little imprecise on this point at the time). This act describes the powers granted to the MPSC:
There is hereby granted to and vested in the Michigan public utilities commission, hereinafter styled the “commission,” the power to control, investigate and regulate every corporation, association or person, now or hereafter exercising or claiming the right to carry or transport crude oil or petroleum, or any of the products thereof, by or through pipe line or lines, for hire, compensation or otherwise, or now or hereafter exercising or claiming the right to engage in the business of piping, transporting or storing crude oil or petroleum, or any of the products thereof, or now or hereafter engaging in the business of buying, selling or dealing in crude oil or petroleum within the limits of this state…
It also grants the MPSC the power to define its own rules:
The commission is hereby authorized and empowered to make all rules, regulations, and orders, necessary to give effect to and enforce the provisions of this act.
Now, you will notice two things about these two sections of the act (for the record, they are sections 483.3 and 483.8): first, the MPSC is given pretty broad authority; they have the power to “control, investigate, and regulate” and can “make all rules, regulations, and orders” necessary to enforce the law. Secondly, you will notice that the three criteria stated in the MPSC press release are nowhere stated in Act 16 itself. Certainly, Act 16 does NOT limit the MPSC’s power to just those three items.
Why does this matter? Well, if you read through the MPSC filings, you will nevertheless see this three-part framework– public need, reasonable routing, and meeting current safety standards– again and again and again. In fact, Enbridge attorneys used this framework, successfully, to prevent all kinds of evidence and arguments from entering into the proceedings. They argued that these three things– and nothing else– are what the MPSC is charged with determining. Everything else, Enbridge argued, is “outside the scope of these proceedings.”
So where did they get this framework? It actually comes from a 2002 MPSC ruling in another pipeline application, the infamous Wolverine Pipe Line case (U-13225), which we’ve discussed before in a different context. This is what the Commission said in their order approving the Wolverine application:
Pursuant to 1929 PA 16, MCL 483.1 et seq., (Act 16) the Commission is granted the authority to control and regulate oil and petroleum pipelines. Act 16 provides the Commission with broad jurisdiction to approve the construction, maintenance, operation, and routing of pipelines delivering liquid petroleum products for public use. Generally, the Commission will grant an application pursuant to Act 16 when it finds that the applicant has demonstrated a public need for the proposed pipeline and that the proposed pipeline is designed and routed in a reasonable manner, which meets or exceeds current safety and engineering standards.
What happened is that Enbridge’s clever attorneys seized upon the last part of this statement (everything following “Generally”) and treated it as if it were clear, prescriptive, restrictive, binding law. They first floated this strategy– we haven’t been able to find such a claim in ANY case before the Commission prior to this– in an initial brief in December of 2011, during the phase one proceedings. There, Enbridge stated that:
In considering an Act 16 application, the Commission examines whether there is a need for the project and if the proposed pipeline is designed and routed in a reasonable manner, which meets or exceeds current safety and engineering standards.
And then, in a clever sleight of hand, they went on to cite the Wolverine language. They did NOT cite, it is crucial to note, anything from Act 16 itself. Rather, they simply presented the statement by the Commission in 2002 as if it were a statement defining and delimiting the Commission’s powers per se (as opposed to a statement that just sketches a rough set of guidelines).
But it is plainly not the case that this statement defines and delimits the Commission’s power or authority. For one thing, the Commission’s 2002 statement says that those three things are “generally” what they will consider. It does not say “exclusively” or “solely” or “only.” For another thing, Enbridge glosses over the earlier part of the statement, which mentions the Commission’s “broad jurisdiction.” And finally (to repeat) Act 16 itself absolutely does NOT limit the Commission to these three areas; there is no legal reason why the 2013 Commission in a completely different case should be bound or constrained by the rough– the GENERAL guidelines– set forth by the commissioners in an order in 2002.
Of course, none of this is particularly surprising or bothersome; it’s just crafty lawyers doing what crafty lawyers do. What’s bothersome is that ALJ Theresa Sheets, in an extraordinary display of credulity, swallowed this argument whole. In a Notice of Proposal for Decision filed in March of 2012 (in phase one), Judge Sheets reiterated Enbridge’s argument, citing the same statement from the Wolverine case. In fact, Sheets did Enbridge one better: first, she stated that in the 2002 case the MPSC “articulated the standard for approval of Act 16 applications.” Secondly, as if that way of putting it still weren’t restrictive enough, she then quotes the same language from the ruling– but leaves out the crucial word “generally.” Frankly, in such a carefully written document, this omission, in our view, can only be deliberate– designed further to give the 2002 MPSC statement binding authority. And indeed, Judge Sheets then goes on to use those three criteria as the test– the ONLY test– for approval of Enbridge’s application.
So, having convinced Judge Sheets of this narrow “standard” in phase one , Enbridge had no trouble returning to it repeatedly– and successfully– in phase two to prevent the intervenors from making their case. The question of local consent? Doesn’t fall under one of those three standards, so it’s outside the scope of the proceedings. The NTSB report? Doesn’t fall under one of those three standards, so it’s outside the scope of the proceedings. And so on. Of course, this narrow three-part standard is betrayed by all sorts of other things that were discussed in the proceedings, such as the matter of environmental impacts. Enbridge even had an expert witness who testified about environmental matters– a fact that just goes to show that the Commission DOES and SHOULD consider things other than standards articulated in the Wolverine case. The standard is really just in place when it serves Enbridge’s interest to invoke it.
More importantly, the insistence on a strict adherence to this standard– an adherence enforced by Judge Sheets– hamstrung everybody and prevented a complete and thorough hearing of the case– precisely what Enbridge wanted. And the worst part is that now that the standard has been invoked and endorsed (by Judge Sheets) and repeated and reiterated (in the MPSC press release, in news articles), it will surely take on even greater weight and authority; it will surely be cited in future cases before the MPSC and treated as settled law (even though it is not).
And in this way, Enbridge– a foreign corporation, mind you– has not only gotten its way in this particular case; it has also effectively rewritten Michigan law.