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My wife and I are among a group of property owners who have endured a transformative two-year eminent domain fight with Houston-based Spectra Energy, backed by the power of the Federal Energy Regulatory Commission.

This was a project located in Bedford County, PA (about two hours from Washington), that involved a 12 billion cubic feet underground natural gas storage facility -- dubbed the Steckman Ridge Project.

Thanks to the scar tissue of experience, we learned that the energy industry has sweetheart lease deals with government entities that are very different from what it offers private property owners next door. (Just try to get copies of these lease agreements.)

To the energy companies, as one right-of-way agent admitted, state governments are big and scary -- property owners are not. So it is good politics to give the government a better payment deal than property owners. As our attorney said, there is a lot of play in the "just" of "just compensation."

For example, in lease agreements for underground gas storage fields, private property owners typically receive a one-time payment driven in part by the number of acres. But similar lease agreements with state governments (Pennsylvania, Ohio, New York, West Virginia) are significantly different.

These leases include a 25-year annuity stream back to the state -- in other words, a royalty for the amount of gas withdrawn and/or injected into the underground field.

So "just compensation" for the state is very different than "just compensation" for private property owners -- even when the acreage is next door (e.g., state game lands).

Our fight led to the development of a website which focuses specifically on property rights that come under pressure from energy and utility companies. We are now helping and responding to inquiries from property owners in Pennsylvania, Texas, Oklahoma and elsewhere.

We have the distinction of being told by a Spectra Energy VP that he has never seen this level of property owner resistance in 26 years with the gas industry.

In addition to working with property owners in other counties in Pennsylvania and in other states, we are talking to legislators at the state and federal level; and I am currently collaborating with an attorney in Pittsburgh to develop advice and expectations for property owners who are facing eminent domain and property rights issues.

Excellent organizations fighting eminent domain, like the Institute for Justice/Castle Coalition, do not deal with the "taking" power of government where public utilities and energy companies are concerned (because of the "public good" argument). We are trying to fill the gap.

Property owners can check out our website with landowner video and blog posts here:

In the meantime, we are looking for more examples of lease agreements utilities have with government entities that are better and richer than the agreements they provide to private property owners. Do you have any examples or information related to this issue?

All the best to fellow property rights fighters,

Mike Benard


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