While claiming FERC doesn’t want pipeline companies to have topay “ransom” to landowners, Commission Chairman James Hoecker saidpipelines must do a better job of hammering out early, innovativedeals with property owners affected by their projects.

“We’ll act faster if the pipelines act responsibly up front,” hesaid. “Frankly, if they don’t do that, our hands are literallytied,” Hoecker told a meeting of the National Association ofRegulatory Utility Commissioners (NARUC) in San Francisco.

Illinois state regulator Ruth Kretschmer, however, took up thepipelines’ cause, stating her past experience in real estate and asa state energy regulator has shown “money talks,” and thatso-called “robber barons” have extorted a lot of money frompipelines. She said some of the pipeline companies have paid theequivalent of “black mail” to landowners to avoid delays in theirprojects.

“It is a very difficult issue,” Hoecker conceded. FERC doesn’twant to subject the pipelines to extortion by property owners.

“If we are going to give a company the right of eminent domainunder federal law, we better do it in those instances where thereis a clear need. Because quite frankly, property rights are a bigdeal in Washington, DC, right now,” he said. “Handing out therights of eminent domain has to be done sparingly.”

He said FERC is open to more expedited certification of new andexpanded interstate pipeline projects and currently is streamliningthe process with a new “project office,” which will focus on theconstruction, engineering and environmental aspects of energyprojects.

But the pipeline industry “has to be more proactive upfront asfar as landowners’ concerns and engage in a collaborative processso we don’t have a holdup once we have a proposal before us. Sitingis extremely difficult when you have thousands of letters fromlandowners and members of Congress calling you saying a project iscompletely contrary to the public interest.

Richard Nemec, San Francisco

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