Eminent Domain Dispute: Do Pipelines Serve Public Interest When Their Oil and Gas is Sold Overseas?

Advances in hydraulic fracturing and drilling technologies have allowed energy companies to produce record amounts of oil and gas from West Texas shale deposits. This surge in production has spurred the need for new pipelines to deliver the product to storage and port facilities. Most of these new pipelines will be travelling across privately owned property. In a lot of cases, the companies may exercise the right of eminent domain to acquire the land needed for the pipelines.

Eminent Domain Dispute: Do Pipelines Serve Public Interest When Their Oil and Gas is Sold Overseas?

Everyone knows oil and gas production is a major part of the Texas economy. The state has granted oil and gas companies the power of eminent domain to condemn property for oil and gas infrastructure projects that are deemed to be in the public interest. The pipelines that transport crude oil and natural gas are one example. The energy they transport is used to generate electricity and fuel our cars, so it can be argued that, in some instances, these pipelines serve a public interest and the use of eminent domain to condemn property could be justified.

Oil Sold on the International Market

But what happens when the oil and gas these pipelines transport aren’t being built in the public interest of Texas citizens? Should the oil companies be allowed to use their eminent domain authority to seize property to transport oil and gas that isn’t intended for domestic use but for sale on the international market?

The oil companies have invested billions in new oil and gas pipelines and terminals. To them, the question of public interest is irrelevant. Their attitude seems to be that they have the right to take the land for whatever reason they feel is necessary, as long as they pay the property owners a fair price for their land.

Some property owners, property rights advocates and environmentalists see this as a new legal argument to halt pipeline production.

The Niskanen Center, a property rights advocacy group in Washington, is preparing challenges against land condemnation for pipelines that transport LNG (liquified natural gas) to export terminals and plan to assist property owners fighting eminent domain actions. Environmentalists, who have been largely unsuccessful in stopping pipeline construction based on the potential for negative environmental impact, could use this as a new line of attack. Property owners are upset that they are being forced to give up their land not for public interest but for the energy companies to make profits overseas.

If it can be shown that the oil and gas coming out of the Permian Basin through a pipeline gets shipped out overseas with no intention of it being used by the Texas public, opponents of pipeline construction projects may have a legitimate public use challenge.

Do the Oil and Gas Companies Want to Use Your Land?

If you are a Texas property owner who has been served notice that your land is going to be surveyed to use for a pipeline or other project, contact the experienced Texas eminent domain attorneys at Dawson & Sodd. We can determine if the condemning entity actually has eminent domain authority and, if they do, make sure you get the best deal possible. We’ve been protecting the property rights of landowners in Texas for over 100 years and have represented landowners all across the state.


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