Oil and Gas Update

Virginia Court Allows ACP Pipeline to Conduct Surveys Without Landowner Permission

February 13, 2017

By: Kelley M. Goes, Robert G. McLusky, and Matthew S. Tyree

According to the Nelson County Times, a trial court in Nelson County, Virginia has ruled that the Virginia statute authorizing natural gas companies to conduct surveys means what it says.   The Virginia statute provides that:

Any firm, corporation, company, or partnership, organized for the bona fide purpose of operating as a natural gas company … may make such … surveys for its proposed line or location of its works as are necessary (i) to satisfy any regulatory requirements and (ii) for the selection of the most advantageous location or route, the improvement or straightening of its line or works, changes of location or construction, or providing additional facilities.…

Opponents of the Atlantic Coast Pipeline argued that the word “and” in the sentence requires that in order to use the statute, gas companies must show that the purpose of their work is BOTH to select the most advantageous route AND to satisfy regulatory requirements. They argued that the pipeline needed to show that the survey work was required by the Federal Energy Regulatory Commission, which must approve interstate natural gas pipelines. Earlier this week, the Circuit Court ruled that surveys could proceed as long as the proponents met either of the two conditions for gaining access to private properties.

Last year, the Nelson County Court reportedly barred Dominion from surveying the pipeline route until it first complied with sufficient written notice of the intent to survey.

In both Kentucky and West Virginia, the statutes authorizing similar surveys require a demonstration that the project be for a “public use” or “public purpose.” Courts in those states have ruled that purely interstate pipelines that do not provide an opportunity for in-state consumers to purchase the gas do not meet those definitions and cannot rely on state statutes to conduct surveys. While pipelines can eventually obtain a right of access from FERC under the Natural Gas Act, they generally cannot do so until after they receive FERC approval.

This article was authored by Robert G. McLusky, Matthew S. Tyree and Kelley M. Goes.