FERC Declares Private Pipeline Companies Can Condemn State Lands

The Federal Energy Regulatory Commission (FERC) issued a controversial declaratory order on January 30th holding that private natural gas companies have the authority to condemn state-owned lands for natural gas pipelines under Section 7(h) of the federal Natural Gas Act if they hold a certificate of public convenience and necessity from FERC. This order follows on the heels of a contrary holding from the Third Circuit Court of Appeals on September 10, 2019, that the Natural Gas Act does not overcome a state's sovereign immunity from condemnation suit stemming from the 11th Amendment and denying a pipeline company the right to take possession of state-owned land for a pipeline project. The FERC order, emphasizing the agency's exclusive jurisdiction over the transportation and sale of natural gas in interstate commerce for resale, contradicted the Third Circuit's determination that Congress did not intend to delegate the federal government's exemption from state sovereign immunity to private gas companies. Expect to see further litigation on this issue in the near future.