Pipeline Easements and Eminent Domain

A letter arrives from a company you have never heard of. It describes a route, a strip of your land, and an offer. Nothing about it looks like government business, and that is the part most owners find hardest to accept: a private corporation can ask a federal judge to take an interest in your property. It can, and Congress said so in 1947. What follows explains the mechanism, the limits on it, and the places where owners still hold real bargaining power.

Where the power comes from

The Federal Energy Regulatory Commission evaluates whether an interstate natural gas pipeline proposed by a private company should be approved. FERC itself does not propose, build, operate, or own these projects. If the Commission approves one, it issues a certificate of public convenience and necessity, and that certificate is the key that unlocks condemnation.

The statute is section 7(h) of the Natural Gas Act, codified at 15 U.S.C. section 717f(h). It applies when a certificate holder cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the right of way it needs. In that situation the company may acquire the interest by exercising the right of eminent domain in the United States district court for the district where the property sits, or in the state courts.

Two limits sit inside that sentence and both favor owners. First, the power exists only after negotiation fails, so the offer stage is not a formality. Second, FERC states that a certificate permits eminent domain only for the proposed pipeline and related facilities, in the exact location the certificate describes, and only for transporting natural gas. A taking that wanders outside those bounds is not authorized by the certificate.

Easement, not a sale

The interest a pipeline company acquires is almost always an easement rather than fee title. An easement is a right to make limited use of another person’s real property. The company gains the right to build, operate, and maintain the line within a defined right of way. You keep legal title and ownership of the land itself.

That distinction has consequences you feel every year. FERC’s landowner guidance is explicit that the landowner pays taxes on the right of way unless a local taxing authority grants relief. The company holds an easement across a portion of the property; it does not hold the property.

It also shapes what you may still do with the strip. FERC’s guidance describes the practical rule this way: what you can build depends on the terms of the easement agreement, and construction is usually allowed up to the edge of the right of way. Within the corridor, trees whose roots could damage the pipeline or its coating, and other obstructions that block observation from aircraft during maintenance, are usually not permitted. Driveways and other improvements without foundations are normally allowed. All of it is subject to the easement terms and open to negotiation, so long as maintenance and safety are not affected.

Survey requests and early contact

Companies frequently approach owners before FERC has approved anything. They need survey data to file a credible application, and they would rather buy the easement than litigate for it. Early contact is normal and is not by itself evidence that approval is a foregone conclusion.

Access for surveys is a separate question from condemnation. According to FERC, state or local trespass laws prevail until a certificate is issued by the Commission. Some states have laws allowing a company access to property for survey purposes, and procedures vary by state. Once a certificate is issued, or an easement or survey agreement or court order is obtained, the company may enter your land, and it will usually notify you in advance. Whether a surveyor may walk your property today therefore turns on your state law and on what you have signed.

What happens in court

If negotiation fails and the company files, the case is a condemnation proceeding. Section 717f(h) directs that practice and procedure in the federal district court conform as nearly as may be with the practice in similar proceedings in the courts of the state where the property is situated. FERC’s landowner materials point to the Federal Rules of Civil Procedure, Rule 71A, as the governing federal procedure.

One provision decides which courthouse you end up in. Section 717f(h) closes with a proviso: the United States district courts have jurisdiction only when the amount claimed by the owner of the property to be condemned exceeds $3,000. Below that figure the company proceeds in state court. In practice almost every contested pipeline easement clears the threshold, but the language is in the statute and it is worth knowing it is there.

The court, not the company and not FERC, determines what you are paid. FERC’s own description of the process says so plainly: if the Commission approves the project and no agreement with the landowner is reached, the company may acquire the easement under eminent domain, with a court determining compensation.

What you are owed

The Fifth Amendment requires just compensation whenever private property is taken for public use, and that constitutional floor applies here. FERC describes the categories in ordinary terms: landowners may be paid for loss of certain uses of the land during and after construction, loss of any other resources, and any damage to property.

Two valuation ideas do most of the work in pipeline cases. The first is that value is measured at the property’s highest and best use, not at its current use, so farmland with a realistic development path is not valued as farmland alone. The second is severance damage: when a corridor is carved through a parcel, the remainder can be worth less than it was before, and that loss in the remainder is compensable in addition to the value of the strip itself. An easement across the middle of a tract is exactly the fact pattern where the remainder question matters most.

Whether a particular pipeline offer reflects those principles is an appraisal question, not a legal formality. Owners who obtain an independent appraisal built on highest and best use and on the effect on the remainder are arguing from evidence rather than from instinct.

Terms that matter most

Because the easement is a document you will live with for decades, several of its terms deserve as much attention as the dollar figure.

Width matters, both the permanent right of way and the wider temporary workspace used during construction. Depth of cover, restoration standards, and topsoil handling matter as well; FERC notes that topsoil is separated from subsoil in agricultural and residential areas, or in other areas requested during easement negotiations, which tells you those practices are negotiable terms rather than fixed rules.

Future use matters most of all. FERC’s guidance addresses whether a company can place more than one pipeline on your property, and whether the easement can be used for something other than natural gas. Both are governed by the easement language, so an owner who wants one line and one product should say so in the grant rather than assume it. Abandonment works the same way. If a company later abandons a line, whether the pipe is removed, and whether the easement survives, depends on the terms of the agreement you or a previous owner signed, and where more than one pipeline exists the company will keep the easement.

State land and the PennEast decision

In PennEast Pipeline Co. v. New Jersey, decided in 2021, the Supreme Court held that section 717f(h) authorizes FERC certificate holders to condemn all necessary rights of way, whether the land is owned by private parties or by states, and that state sovereign immunity does not bar such a suit. For a private owner the direct effect is limited, but the case settled a real question about whether a state could block a federally certificated project by holding property in its own name. It cannot.

Before you sign anything

Three habits protect pipeline owners more than any single argument. Do not sign an easement, a right of entry, or a settlement without understanding precisely what it grants and for how long, because a recorded easement runs with the land and binds every owner after you. Get your own appraisal at highest and best use that addresses the remainder, not only the strip. And confirm what stage the project has actually reached at FERC, because your position before a certificate issues differs from your position after.

Frequently asked questions

Sources

• 15 U.S.C. section 717f, Natural Gas Act section 7, including subsection (h) on the right of eminent domain, Legal Information Institute, Cornell Law School.
• An Interstate Natural Gas Facility on My Land? What Do I Need to Know?, Federal Energy Regulatory Commission.
• Landowner Topics of Interest, Federal Energy Regulatory Commission.
• PennEast Pipeline Co. v. New Jersey, 594 U.S. (2021), full opinion, Justia.
• Fifth Amendment, Takings Clause, Constitution Annotated, Congress.gov.