The Interstate Natural Gas Association of America and its member companies are committed to building and maintaining strong, positive working relationships with landowners. Since a pipeline will be on a landowner’s land for many years to come, we recognize the importance of being a good neighbor and steward of the right-of-way, while cultivating strong relationships with landowners based on trust and respect.
INGAA’s Commitments to Landowners explain in detail the pledges our members have made to outline how they will work with property owners. These commitments include: negotiating in good faith; being responsive to questions or concerns; and providing accurate and timely information – to name a few. Our members are committed to fair and respectful treatment of landowners who live near the projects we construct and operate, while developing projects that are helping to meet the energy needs of communities and customers across the country.
The Federal Energy Regulatory Commission (FERC) also understands the importance of working with and being responsive to landowners and recently made its own commitments to improve its responsiveness to landowners.
Before FERC can approve a project, FERC must first find that there is a need for the proposed pipeline and that construction and operation of the pipeline will be in the public interest. In doing so, FERC balances the public benefits against the potential adverse consequences of a pipeline. This is done through a comprehensive, inclusive process in which FERC considers the demonstrated need for the pipeline, its potential environmental impacts, its effect on communities and landowners, and routing alternatives that best balance all relevant considerations.
The project development process is lengthy, often taking developers in excess of 4 years. The FERC’s policies and the National Environmental Policy Act (NEPA) environmental review process requires a pipeline developer to address and resolve community and stakeholder feedback on the project. In the months and years before a project reaches the Commissioners’ desks for a decision, it has often undergone dozens (sometime hundreds) of reroutes through consultation with impacted landowners, communities and other stakeholders to achieve the most environmentally sensitive and constructible routing of the pipeline.
Due to lack of knowledge or misunderstandings about this pipeline project development process, FERC is sometimes mischaracterized as providing a green light to every project that comes its way. This is not the case. Only the highly competitive, customer supported, and thoroughly vetted projects ever make it onto FERC’s docket for consideration.
Pipeline Project Development and Refinement Process
FERC only sees the most competitive and commercially viable projects
The graphic above demonstrates that by the time a project is filed at FERC, the project developer has already refined significantly the size and scope of the project and confirmed the need for it with its customers.
Project developers begin generating project ideas by conducting a market assessment to determine the need, costs and viability of a project. Next comes the optimization process which may be initiated several years before a project developer files its application for approval at FERC. The developer has engaged with many potential customers and markets and has refined the project scope to fit the needs of only those customers willing to commit to the project through transportation service agreements. In addition, once customer negotiations are complete, the FERC policy is to hold an Open Season – an open “call out” to the marketplace – in order to make sure all potential customers for a project are identified and given an opportunity to seek capacity. This step confirms the final market need for the project and prevents overbuilding or duplicative projects.
After confirming market need for the project, finalizing capacity design and costs, and identifying a proposed route based on balancing landowners impacts with avoiding environmentally sensitive areas, the developers of very large projects will often initiate the formal “prefiling” phase at FERC. This phase, lasting at least 6 months, involves further consultations with landowners, regulators, and federal and state permitting agencies to identify and resolve as many issues as possible before filing an application for the project to obtain FERC approval. Thanks to the market assessment and prefiling phases (whether formal prefiling or informal stakeholder engagement), by the time a pipeline project is brought forth for consideration by the Commission, it has already undergone extensive development, environmental reviews and permitting consultation and has the market and customer support to clearly demonstrate that it is in the public convenience and necessity.
If FERC approves a project but the project developer and a landowner cannot reach a voluntary right-of-way agreement, Congress has granted pipelines eminent domain powers that can be used, when necessary, to acquire individual tracts of land along the approved pipeline right-of-way. Congress provided this authority because it recognized that there is a public need to build such infrastructure, Members of INGAA view the use of eminent domain as an absolute last resort, as demonstrated by data regarding the frequency of its use. According to an INGAA member company survey of projects placed into service between 2008 and 2018 – a total of 7,200 miles of interstate natural gas pipelines – over 98 percent of those right-of-way easements did not require a judicial determination for eminent domain. Even when eminent domain is granted, the court ensures that the landowner is fairly compensated for the use of their land.
The need to construct, operate and maintain natural gas pipeline and storage infrastructure to meet the nation’s energy demand will continue for years to come. Members of INGAA know that we cannot build or maintain our natural gas infrastructure systems without strong landowner relationships. We are proud of members’ work and commitments to landowners and we commend FERC for its efforts to improve landowner engagement.
Working together in good faith – operators, landowners, and regulatory agencies – is our commitment.
