Pining for regulatory oversight in of all places, Marcellus

Posted by By at 14 December, at 10 : 49 AM Print

The Laser Northeast Gathering Company has been dealt the first legal loss in the ever expanding boon of the Marcellus Shale. On the surface, Laser’s request appeared benign – – have its “gathering pipeline” merit the same consideration as any other public utilities. Yes, in this day and age a company asking to be regulated, exposing itself to mandatory inspections and potential regulatory fines, (Laser is by no means your congressman’s Haliburton).

It seems so out of character for companies these days, especially those that profit off of anything having to do with drilling, to want government scrutiny, but in the case of Laser that, as it turns out, is exactly what it is seeking.

How could an administrative law judge deny Laser’s request and recommend that the Pennsylvania Public Utility Commission do the same — making a preliminary ruling permanent?

Below the surface, there’s something lurking, which is not so apparent unless you own property that’s in the way of Laser’s proposed pipeline, no we are not talking about fracking, forced pooling, or royalties, no, concern here arises out of eminent domain.

As a regulated public utility, Laser would have legal grounds to take property, if need be, to construct its $55 million dollar line to transport natural gas to New York State.

Which is all the reason why some homeowners in Susquehanna County and other company’s wanting to follow a similar path have become laser focused on the outcome.

“It is not absolutely clear exactly what the effect will be if the commission affirms the decision and says that these entities are not public utilities,” said Tim O’Brien with Eckert Seamans, a law firm that represents the Pennsylvania Independent Oil and Gas Association.

Laser did not return calls to Rock The Capital, but according to what Thomas Karam, president and CEO of Laser’s parent company, Delphi Midstream Partners, told the Associated Press it will forge ahead with constructing the pipeline regardless of the decision. “‘Any eminent domain case would be extremely rare, in any case, it wasn’t among Laser’s primary reasons for applying. Rather Laser wants to place its pipelines along public roads and rights of way, without satisfying each municipality’s zoning codes.'”

Jennifer Kocher, a spokesperson for the PUC told Rock The Capital, “the commission is interested in having jurisdiction over these types of pipelines,”  but It would take an act of the legislature for the PUC to take hold of the reigns because the utility code needs amending.

The type of line Laser wants to build is not regulated in Pennsylvania. The PUC would like at least the authority to enforce safety standards. The commission is not expected to issue a ruling until 2011.

Want more insight as to how the  PUC operates — follow Rock The Capital to the PUC website.

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