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FERC Called "Biased Against Local Concerns"

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Monday, May 23, 2016   

CHARLESTON, W. Va. - The federal agency that approves or denies gas pipelines is oriented against the concerns of landowners and communities, according to people working on the issues.

The Federal Energy Regulatory Commission (FERC) will decide on the huge pipelines competing to bring natural gas through West Virginia and Virginia to eastern markets.

Spencer Phillips, chief economist for Key-Log Economics, studied the impact of the Mountain Valley Pipeline (MVP).

He estimates it will hurt folks along the line to the tune of more than $8 billion. But Phillips says FERC is not designed or inclined to consider those costs.

"FERC's approval process for the Mountain Valley Pipeline is really a rigged game," says Phillips. "The agency's procedures themselves, as well as their track record, mean that they ignore some really important cost to people and communities."

According to a Washington lawyer who specializes in cases like these, FERC's orientation is built into its legal DNA.

Carolyn Elefant, an energy attorney in Washington D.C., says the 1930s Natural Gas Act was passed at a time when the government wanted to encourage the development of needed infrastructure.

She says it gave regulators the power to use eminent domain to overcome landowner opposition.

So, Elefant says FERC now assumes if most landowners make a deal with the developers, the folks along the line have received fair compensation.

"That's very inaccurate," says Elefant. "Many times people enter into the agreements because they feel like they have no choice, they're not going to be able to fight a huge gas company, and they figure they might as well take what they can get."

Elefant says the federal agency may seem intimidating to ordinary folks. But she stresses that even when it seems that way, it's still worth trying to make your case the same way pipeline developers do.

Phillips says when it comes to determining if there is a need for the MVP, it's still unclear if the agency will listen to the landowners and local communities, or just the power company.

"The firm obviously wants to make money for its shareholders," he says. "However, it has not been demonstrated that there is any public benefit, outside of the corporation itself, that there would be any public benefit."

The pipeline developers argue the lines are justified to meet future public demand for gas in North Carolina and coastal Virginia.

FERC says it does balance impacts and demand when determining overall "public convenience and necessity."


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