Midstream pipeline operators looking to use the Commonwealth's power of eminent domain to acquire pipeline easements to link the lucrative gas being extracted from the Marcellus Shale formation with transmission pipelines were dealt a setback through a proposed ruling from a Pennsylvania Public Utility Commission (PUC) administrative law judge.

The operator, Laser Marcellus Gathering Company LLC (Laser), filed an application with the PUC for a Certificate of Public Convenience to construct and to operate a six-mile natural gas gathering pipeline in Susquehanna County. Laser sought public utility status so that it could acquire easements through eminent domain proceedings from property owners  not willing to enter into a private arrangement. Administrative Law Judge Susan Colwell  ruled that, because Laser was not offering services to the public for compensation, it could not be regulated as a public utility. Under Pennsylvania law, only public utilities can utilize the Commonwealth's power of eminent domain to condemn and acquire land.

If the decision is confirmed by the Commission, and is not then overturned by the Commonwealth Court through a likely appeal, any midstream operator seeking to construct such a pipeline would have to painstakingly negotiate separate agreements with all the surface landowners along the pipeline's desired route.

For further information on Pennsylvania's Marcellus Shale natural gas play, please contact Harry Weiss, at 215.864.8129 or weiss@ballardspahr.com, or any member of Ballard Spahr’s Energy and Project Finance or Environmental practice. 

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