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?
Amen.