Eminent domain is a legal concept that allows taking of private property for a use that benefits the public. The agency taking the property must show a need benefitting the public, and the private property owner is paid fair market value for the property taken.

Eminent domain is usually utilized for roads, railroads, other governmental uses and public utilities. In recent years it has been utilized for limited economic development activities.

Procedures and requirements are strictly governed by statutes. The taking entity (a governmental or government regulated public utility agency) is required to negotiate for a voluntary transfer before utilizing eminent domain.

As to oil and gas pipeline development, eminent domain rights can attach generally only in the following circumstances:

• With interstate transmission mains governed by the Federal Energy Regulatory Commission (FERC), like the Rockies Express Pipeline.
• With pipelines that provide natural gas service connected directly to homes and businesses under the authority and jurisdiction of a public utility authority (in Ohio, the Ohio Public Utilities Commission). Such providers have service tariffs approved by the utilities commission, as well as certificates that authorize utility services in a specified geographical area.

The types of gathering pipelines (“midstream development”) currently being rapidly constructed in northeast Ohio generally do not fall within these categories.

Pipelines being built to gather and move products from wells to processing plants or to transmission mains are not qualified for eminent domain takings. Companies constructing those lines must negotiate easements.

Property owners have no legal obligation to grant these easements. There may be good business and economic reasons for doing so, but there is no legal compulsion involved.

Should any landman issue a threat of eminent domain, we suggest you ask him/her the following:

• Name, address, telephone and email, and identity of employer.
• Copy of Federal or state governmental order, certificate or permit under which he/she claims authority for eminent domain taking.

Negotiation of pipeline easements involves significant legal and practical considerations. Any property owner should obtain competent legal counsel before signing any pipeline agreement, option or easement.

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Alan D. Wenger is an attorney in Youngstown, Ohio. His practice areas include oil and gas law, public utilities law, labor and employment law, land use law, environmental law, construction law and school law.