‘They Do Not Need Louisiana’s Permission’: Pipeline Companies Seize Land with Eminent Domain
(This August article by Tristan Baurick in Southerly Magazine was just listed by the Institute for Nonprofit News as one of the Best of Nonprofit News stories of 2019 in the Money, Power and Influence category.)
In the patchwork of rice fields and pastures spreading across southwest Louisiana is a parcel Jay Lewis’ family has called their own for longer than anyone can remember. “It’s been with us since our great, great grandfather, maybe longer,” said Lewis, 50, as he trudged through a soggy pasture on a cold January day in Jefferson Davis Parish, which is about 10 miles from Lake Charles. “Every day, I’ve been here. I’m a piece of this.”
He and his fiancée, Paola Salter, live in a small house between mobile homes owned by other family members. To make ends meet, Lewis and Salter trap turtles and pick blackberries from the wetlands and woods behind their house. They aren’t wealthy, but having land makes them feel that way.
“We have freedom and peace of mind,” Lewis said. “If you don’t have land, you don’t have nothing.”
Last year, he was shocked to learn that a Houston, Texas oil company had Louisiana’s blessing to take some of his family’s land and run a pipeline through it. Energy Transfer Partners was claiming eminent domain, a power used by governments to seize private property for public benefit, wherever it met resistance along the route of its 163-mile-long Bayou Bridge Pipeline. The expedited project, which was completed in March, serves as the last link in a pipeline network connecting North Dakota’s Bakken oil fields with ports and refineries in Louisiana and Texas.
Louisiana isn’t the only place where energy companies use eminent domain to take property for oil and gas infrastructure. Several states — most of them in the South — have long granted oil and gas companies this right, a process also known as expropriation. Seizures used to happen infrequently and quietly, typically in rural or impoverished areas where political support for the oil industry is strong.
Now, pipeline companies are asserting eminent domain rights more boldly as they try to keep pace with the recent boom in domestic oil and gas production. Construction is expected to speed up as President Donald Trump removes barriers to new pipelines and streamlines review processes. As a result, more landowners in Louisiana and across the South could lose property rights with little compensation.
The authors of the Constitution knew the power of eminent domain was ripe for abuse. In the 5th Amendment, which addresses criminal and civil legal procedure, they inserted “nor shall private property be taken for public use, without just compensation.”
The amendment made clear that owners should be paid when their land is taken, but the term “public use” has fueled decades of legal debate. Once considered a clear reference to amenities the public owns or has a right to access, the definition was loosened by a 2005 U.S. Supreme Court’s decision that allowed New London, Connecticut to bulldoze a low-income neighborhood and replace it with an industrial park. The court said that eminent domain was justified because the park would spur economic growth.
In her dissent, Justice Sandra Day O’Connor warned the decision handed the power of eminent domain to private companies that would use it at the expense of the poor and politically weak.
“Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,” O’Connor wrote. “The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.”
“The Founders cannot have intended this perverse result,” she added.
Eminent domain has long been used by governments to build things that serve the public, such as highways, schools, dams, or sewer plants. But after the decision, oil companies began justifying it as economic development in the public’s interest. They seized strips of land in Kentucky, West Virginia, North Carolina, Texas, and Louisiana.
The Bayou Bridge Pipeline raised the profile of oil company land seizures like never before. Energy Transfer, one of the country’s largest transporters of oil and gas, had already been in the news for its Dakota Access Pipeline, a four state-spanning project that sparked lawsuits and violent clashes between police and Native American protesters. The pipeline’s opponents worried that a spill would pollute drinking water for the Standing Rock Sioux reservation.
Energy Transfer’s plan to expand the pipeline network into Louisiana raised similar environmental concerns, but conflicts over property rights arose after the company started claiming 30-foot-wide strips of land, cutting trees and burying pipe without landowner permission. In one lawsuit, Energy Transfer was found to not have filed necessary paperwork before claiming land under eminent domain.
For a private, for-profit company to assert such rights made no sense to Lewis’ cousin, LaKoshia Roberts, a lawyer whose father is a part-owner of Jefferson Davis Parish property on the Bayou Bridge route.
“Eminent domain is a power reserved for governments, and even governments have a limited scope for how they can use that power,” said Roberts, a former assistant city attorney in Monroe, Louisiana and legal counsel for St. Bernard Parish. “Even the government has to jump through hoops. Bayou Bridge didn’t even do that.”
In most states, including Louisiana, an oil or gas company typically must prove a pipeline will carry more than just its own product to claim eminent domain rights. This shared use defines the pipeline as a “common carrier,” similar to a rail line or toll road.
Texas at least puts up a few legal hurdles like “checking a box that you’re a common carrier,” said David Bookbinder, an attorney for the Niskanen Center, a Washington D.C. property rights think tank. “Even for Texas, Louisiana goes a little far,” Bookbinder said. “It’s almost ‘do whatever you want whenever you want.’”
In Louisiana, companies don’t need a common carrier assessment or certification before claiming eminent domain on a pipeline route. The state is tougher on semi-trucks, which must submit a written application, give public notice, conduct a hearing, and provide a slate of safety protocols.
Energy Transfer’s lawyers have used the argument that a benefit for the oil industry is a benefit for all. “Courts in Louisiana have repeatedly confirmed that a public purpose is served in growing the state’s energy infrastructure and capabilities through oil and gas pipelines,” the company’s lawyers said in court documents.
Energy Transfer did not respond to repeated requests for comment about its specific practices. The company has said it follows all appropriate laws and regulations, and that the Bayou Bridge Pipeline has provided construction jobs and other economic benefits to Louisiana.
Pam Spees, a lawyer with the Center for Constitutional Rights, said that essentially, all an oil company has to do to claim eminent domain rights is prove that they are an oil company. “In short,” she said, “they do not need Louisiana’s permission before running their pipeline through the state.”
Warren Perrin is one of the few people in the state to tussle with an oil company over eminent domain and come away with something close to a win. In 1997, his family discovered that a south Louisiana property they leased to Texaco had been fouled by a well blowout. An investigation found the property laden with oil, heavy metals, and radioactive material. Some of the oil had seeped into adjacent pastures where Perrin’s cousins grazed cattle. Perrin, a lawyer, sued on his family’s behalf. His demand was simple: Clean up your mess.
“But things got real heavy,” Perrin said. “They did scorched earth litigation.”
The legal battle dragged on for 15 years. “When it looked like we finally had them nailed to the wall, that’s when they tried eminent domain,” Perrin said.
Chevron, which owns Texaco, used a subsidiary called Sabine Pipe Line to seize the land. “They said it’s in the national interest; it provides jobs and supplies the country with oil,” Perrin said. “That’s the argument they make. Juries around here always buy it.”
Perrin’s family decided to sell, but not without requiring the cleanup of the surrounding pastures and a large payment that Perrin declined to disclose publicly. But most eminent domain fights don’t end this way, lawyers say.
“It’s a David vs. Goliath challenge – billion-dollar corporations vs. small landowners,” said Bill Quigley, a law professor at Loyola University in New Orleans.
Quigley was part of a team that represented a family in a lawsuit against Energy Transfer over the seizure of land in the Atchafalaya River Basin, one of North America’s largest wetlands, with roughly a million acres of swamp, lakes, and bayou. The property owners argued that Bayou Bridge construction crews entered the family’s 38-acre parcel without permission before going through the eminent domain process.
“Energy Transfer didn’t want to wait,” Quigley said. “They knew it was illegal, but they went into private property and cut down trees and bulldozed the landscape.”
Out of 115 similar cases in Louisiana from 1943 to 2011, only three landowners who tried legally defending their properties against seizure by an oil or gas company were successful, according to an assessment by Quigley’s team of lawyers.
Bayou Bridge routed the pipeline through mostly poor, rural areas with high percentages of black residents. “They’re going for the lower income and the disadvantaged, and that’s not a coincidence,” said Roberts, the Lake Charles lawyer. “You’re not going to find the pipeline going through a property with a $400,000 house.”
Many properties on the pipeline route have been passed through several generations and have dozens of owners, all of whom must agree on a land sale. In some cases, property owners said Energy Transfer preferred to negotiate with family members who needed money or were less likely to put up a legal fight.
Roberts said she repeatedly told the company’s representatives that she was the family’s point of contact, but “they only wanted to talk to my dad, who’s in his 80s and has severe emphysema, and is absolutely terrified of having this oil company file a lawsuit against him.”
Lewis, her cousin, said the poor members of his family were quick to grant pipelines access for as little as $100. “They’re all older and they know they can use that money for their prescriptions,” he said. “They can’t hire a lawyer. They sell because they don’t want this disturbance in their lives.”
Alexis Daniel, media relations representative for Energy Transfer, told Southerly that the company has negotiated voluntary easement agreements for more than 95% of the properties their pipelines pass through in the U.S. “It is our goal to cultivate a relationship with each landowner in order to negotiate a voluntary easement agreement,” Daniel said. “While this is our first priority, we do have legal options available when this is not possible.”
Hope Rosinski, a homeowner in rural Acadia Parish, agreed to a payment for access to her land, but had second thoughts after she learned about environmental concerns and legal challenges against the pipeline. Energy Transfer obtained a restraining order against her, and she was prevented from interfering with construction on a 30-foot-wide strip of land that passed through her backyard, according to court documents. The company also threatened to post security.
Many landowners are concerned about the risk of spills. “What one oil spill would do is unfathomable,” said Theda Larson Wright, one of the family members challenging Energy Transfer in the Atchafalaya Basin case. “And this corporation has a terrible record of spills.”
According to a report by Greenpeace and the Waterkeeper Alliance, Energy Transfer and its subsidiaries had 527 spills and other hazardous incidents in the U.S. between 2002 and 2017, that caused an estimated $115 million in property damage and nearly $6 million in fines for the company. The report said the number of spills of crude oil and other petroleum products has increased over the past decade: in 2015, there were 454 incidents, and incidents have remained at elevated levels.
Energy Transfer says it has an excellent pipeline safety record. An Energy Transfer spokesperson told The Times-Picayune last year that while 3.6 million gallons of oil may have spilled during the 15-year period noted in the report, the company transports billions of gallons of oil each year, and more than 99% reaches its intended destination.
If the oil wasn’t pumping through pipelines, it’d be posing bigger pollution risk in trucks, trains or barges, said Gifford Briggs, president of the Louisiana Oil and Gas Association. “Using a pipeline is the most efficient and safest way to transport crude oil,” he said. “The Bayou Bridge Pipeline will decrease highway, water and rail traffic, making it safer for those communities (and) increasing the overall health of our environment.”
In a December (2018) ruling that settled the Atchafalaya Basin case, Judge Keith Comeaux decided Energy Transfer had the right to seize the properties, but trespassed when it began construction before finalizing paperwork. He ordered the company to pay the three property owners $150 each.
In asserting eminent domain, Energy Transfer has argued that the pipeline is a critical part of the nation’s energy infrastructure. The company’s website says the pipeline will “decrease our reliance upon less stable foreign sources of crude oil.”
But Energy Transfer’s 2017 study of Bayou Bridge’s economic impact, done by a Louisiana State University economist, indicates the oil isn’t for U.S. consumers —it’s bound for overseas markets with higher demand. The U.S. Energy Information Administration predicts this trend will continue, with domestic oil consumption remaining at current levels through 2050 and foreign consumption surging by nearly 20%. The U.S. is on track to produce about 12 million barrels of crude oil per day in 2019 and 13.2 million in 2020, when it will likely account for half of the world’s growth in oil and gas production.
Federal energy regulators say the biggest challenge isn’t production — it’s getting the product to market. In April, President Trump signed two executive orders that make it harder for states to use permitting processes to block or slow pipeline construction after New York and Washington called on regulators to halt pipelines.
Louisiana is cracking down on anti-pipeline protests. Last year, the state passed a law making it a felony to trespass at a pipeline or pipeline construction site. Fifteen Bayou Bridge protestors have been arrested since the law was enacted, but have not been charged. Similar laws have been approved in Oklahoma, Texas, and Tennessee.
Louisiana is currently reviewing permits for at least 530 miles of new pipeline, including interstate pipelines like Tallgrass Energy’s Seahorse Pipeline, a 700-miler that would start in Oklahoma and cross much of Louisiana, ending near the mouth of the Mississippi River.
Perrin, the landowner who fought Chevron, has little confidence that protests or court battles will stem the tide. Pipeline opponents tried to enlist him in the fight against Bayou Bridge, but he told them they can’t win as long as eminent domain remains in the oil companies’ arsenal.
“It’ll never change until we change the law,” he said. “But the laws won’t change as long as the Texaco flag flies over our capital. End of story.”
[Tristan Baurick is a coastal environment reporter for The Times-Picayune | New Orleans Advocate. He was a Ted Scripps fellow at the Center for Environmental Journalism at the University of Colorado-Boulder and has written for The New York Times, Hakai, and Audubon.]