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FERC Urged to Revoke CNYOG Eminent Domain Power for Marcellus Project

The Pennsylvania Game Commission (PGC), which oversees game and wildlife in the state, has called on FERC to revoke eminent domain authority for Central New York Oil & Gas Co. LLC (CNYOG) to seize state land to build the MARC I Hub Line project in northeastern Pennsylvania.

The Federal Energy Regulatory Commission issued a certificate to Inergy subsidiary CNYOG for the project, which is expected to give northern markets greater access to Marcellus Shale gas, in late November (see Shale Daily, Nov. 17).

"Because CNYOG has not even tried to avail itself of the Commonwealth's right-of-way license agreement and procedures, which would address potential environmental impacts to the wildlife resources, we would request FERC to revoke eminent domain authority to CNYOG for Commonwealth land...We [also] would request FERC require proof of issuance of the right-of-way license agreement with the PGC prior to allowing CNYOG to proceed with the certificate of public convenience," the PGC said in a recent filing [CP10-480].

"If FERC allows CNYOG to file eminent domain proceedings against the Commonwealth, it will bring into contention the implicit federal preemption of state's regulatory authority. The inequitable burden placed on Pennsylvania's wildlife resources is in stark contrast to a project that neither increases the capacity of the downstream gas delivery system, nor increases the supply of gas feeding into the gas supply system, but at best only allocates the direction gas will flow for the private pecuniary benefit of some at the expense of efficiency and economy for all.

"Such action will polarize opposition to FERC's decision to issue a certificate of public convenience for this project and will undoubtedly invite litigation that will unnecessarily delay meaningful solutions to the public needs concerning FERC and waste valuable resources of the PGC and the Commonwealth."

Kansas City, MO-based Inergy did not immediately respond to a request for comment.

In filing objections to the MARC I Hub Line project, the PGC noted that up until Nov. 17, when FERC issued its certificate, CNYOG has worked with the state commission. But "after issuance of the certificate of public convenience, CNYOG precipitously sidestepped the whole administrative process and filed two eminent domain actions seeking to compel the Commonwealth to give up interest in land heretofore placed in the public trust for the benefit of wildlife and recreational use of the public at large," the PGC said.

It further noted that the migratory bird impact assessment and habitat restoration plan, which was developed prior to Oct. 25, 2010, was no longer valid for the project. Moreover, "CNYOG does not have authority to condemn property as set forth in the certificate of convenience because a new alignment has been proposed to, if not approved by, FERC." CNYOG proposed to relocate some of the project's pipe facilities after the certificate was issued, according to PGC.

The project calls for the construction of a 39-mile, 30-inch diameter pipeline in three counties in northeastern Pennsylvania -- Bradford, Sullivan and Lycoming -- as well as installation of a 15,300 hp Northern Compressor Unit at CNYOG's NS2 Compressor Station in Bradford County, and a 16,360 hp Southern Compressor Unit at CNYOG's M1-S Compressor Station in Sullivan County (see Shale Daily, June 2). The project would have about 550,000 Dth/d of firm capacity.

The MARC I Hub gas transmission line would connect to Tennessee Gas Pipeline's Line 300 and Transcontinental Gas Pipe Line's (Transco) Leidy Line, as well as existing Stagecoach laterals that tie in with Millennium Pipeline. The project would clear the way for gas produced in the northeastern Pennsylvania counties to be stored at CNYOG's Stagecoach Gas Storage facility near Oswego, NY.

Together with Integrys' North-South project, which was placed in service in October, the MARC I project would allow shippers to wheel/transport gas bidirectionally on a firm basis approximately 75 miles between Millennium Pipeline and Transco's Leidy Line and all points in between.

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