[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
PIPELINES OVER PEOPLE (PART II):
MIDSHIP PIPELINE'S DISREGARD FOR
LANDOWNERS IN ITS PATHWAY
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HEARING
BEFORE THE
SUBCOMMITTEE ON CIVIL RIGHTS AND CIVIL LIBERTIES
OF THE
COMMITTEE ON OVERSIGHT
AND REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
MAY 5, 2021
__________
Serial No. 117-19
__________
Printed for the use of the Committee on Oversight and Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov
oversight.house.gov or
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-571 PDF WASHINGTON : 2021
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COMMITTEE ON OVERSIGHT AND REFORM
CAROLYN B. MALONEY, New York, Chairwoman
Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
Columbia Minority Member
Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
Jim Cooper, Tennessee Paul A. Gosar, Arizona
Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
Jamie Raskin, Maryland Glenn Grothman, Wisconsin
Ro Khanna, California Michael Cloud, Texas
Kweisi Mfume, Maryland Bob Gibbs, Ohio
Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
Rashida Tlaib, Michigan Ralph Norman, South Carolina
Katie Porter, California Pete Sessions, Texas
Cori Bush, Missouri Fred Keller, Pennsylvania
Danny K. Davis, Illinois Andy Biggs, Arizona
Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
Peter Welch, Vermont Nancy Mace, South Carolina
Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
Georgia Jake LaTurner, Kansas
John P. Sarbanes, Maryland Pat Fallon, Texas
Jackie Speier, California Yvette Herrell, New Mexico
Robin L. Kelly, Illinois Byron Donalds, Florida
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts
Mike Quigley, Illinois
Dave Rapallo, Staff Director
Candyce Phoenix, Subcommittee Staff Director
Amy Stratton, Deputy Chief Clerk
Contact Number: 202-225-5051
Mark Marin, Minority Staff Director
------
Subcommittee on Civil Rights and Civil Liberties
Jamie Raskin, Maryland, Chairman
Kweisi Mfume, Maryland Pete Sessions, Texas, Ranking
Debbie Wasserman Schultz, Florida Minority Member
Robin Kelly, Illinois Jim Jordan, Ohio
Ayanna Pressley, Massachusetts Clay Higgins, Louisiana
Eleanor Holmes Norton, District of Andy Biggs, Arizona
Columbia Nancy Mace, South Carolina
Alexandria Ocasio-Cortez, New York Scott Franklin, Florida
Rashida Tlaib, Michigan Byron Donalds, Florida
Danny K. Davis, Illinois
C O N T E N T S
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Page
Hearing held on May 5, 2021...................................... 1
Witnesses
Rob Squires, Landowner Advocate, Squires Consulting, LLC
Oral Statement................................................... 5
Samuel B. Gedge, Attorney, Institute for Justice
Oral Statement................................................... 7
Christopher A. Smith, Senior Vice President, Policy, Government
and Public Affairs, Cheniere Energy, Parent Company of Midship
Pipeline Co.
Oral Statement................................................... 9
Terry Luber, Landowner
Oral Statement................................................... 10
Written opening statements and statements for the witnesses are
available on the U.S. House of Representatives Document
Repository at: docs.house.gov.
Index of Documents
----------
* Unanimous Consent: Statement for the record; submitted by
Rep. Sessions.
Documents entered into the record during this hearing are
available at: docs.house.gov.
PIPELINES OVER PEOPLE (PART II):
MIDSHIP PIPELINE'S DISREGARD FOR
LANDOWNERS IN ITS PATHWAY
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Wednesday, May 5, 2021
House of Representatives
Committee on Oversight and Reform
Subcommittee on Civil Rights and Civil Liberties,
Washington, D.C.
The subcommittee met, pursuant to notice, at 10:12 a.m.,
via Zoom, Hon. Jamie Raskin (chairman of the subcommittee)
presiding.
Present: Representatives Raskin, Mfume, Wasserman Schultz,
Kelly, Ocasio-Cortez, Tlaib, Sessions, Higgins, and Biggs.
Mr. Raskin. The committee will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
I will now recognize myself for an opening statement.
Good morning. And thank you to all of our witnesses for
being here with us virtually today. This hearing is a
continuation of our investigation into the imbalance of power
between private landowners and pipeline companies at the
Federal Energy Regulatory Commission, FERC.
Our subcommittee's been investigating FERC's process for
permitting natural gas pipelines and its effects on the rights
of landowners since February of last year. Our initial
investigation revealed that FERC's rules and practices allowed
these big companies to trample the rights of individual
landowners.
Before we get into today's topic, I want to address some
breaking news out of FERC.
As you know, FERC is the primary Federal permitting agency
for construction and operation of all major interstate natural
gas pipelines. It grants certificates to pipeline companies
that allow them to assert eminent domain over the property of
individual landowners per the Natural Gas Act.
Because of FERC's procedures, landowners were given little
to no opportunity to prevent use of their private property
against their will. In our subcommittee hearing in December, we
pressed FERC to stay its certificates, such that a company
could not assert eminent domain over a landowner's objections
while the landowner's appeals were still pending.
We learned just last night that FERC has issued a new order
that does exactly that. I want to thank Chairman Glick for his
work to move landowner rights forward. This commonsense and
eminently fair practice was long overdue, and I'm thrilled that
Chairman Glick and FERC have made this change a priority.
But there's still a lot of work to do, so I turn now to the
issue before us, the Midship Pipeline.
Because of our investigation, we started to hear from
landowners who were enduring long delays in the restoration and
repair of their land damaged by pipeline construction. One
example came up over and over again: the Midship Pipeline in
Oklahoma.
And I want to take a second here to be clear on the
identity of the parties involved in today's hearing. While the
pipeline is technically built by an LLC called Midship
Pipeline, Cheniere Energy is the parent company. Their staff
told us that Midship executives also all have Cheniere titles.
It is Cheniere staff that have been negotiating directly with
the landowners, and when we contacted Midship for testimony, it
was Cheniere's senior vice president for government affairs who
showed up in response.
So, I think it's safe to say that Cheniere is responsible
for what's happening with the Midship Pipeline. And you will
hear us refer to Cheniere, not just Midship LLC,
interchangeably here today.
After hearing about the problems with Cheniere's Midship
Pipeline, we investigated and found that FERC routinely allows
pipelines to go into service before the companies have fully
restored the land that they damaged during construction. That
means the companies, if you think about it, have no real
incentive to settle with and satisfy the valid demands of
landowners for repair of the land and face minimal consequences
for not doing so.
If I come onto your land by way of eminent domain and I
disrupt your farm and your business, invade the ground, tear it
up, and I start making money immediately, what's my incentive
to repair and restore your land? I've already gotten out of you
what I want to get out of you. And that's the situation a lot
of these landowners find themselves in.
FERC only requires that the companies demonstrate they've
made, quote, ``substantial progress'' on restoration prior to
going into service, but it never specifies what that means. In
practice, as the Midship Pipeline case illustrates, FERC's
standard is totally slippery and woefully insufficient. It's a
promise basically written in disappearing ink.
More than a year after Cheniere turned on the pipeline,
Oklahoma farmers are still dealing with leftover construction
debris, erosion, flooding, and missing topsoil, among other
damage.
Despite Cheniere's disregard for the property rights of
these American farmers, FERC did not step in until March of
this year to finally order Cheniere to complete restoration by
May 17.
When FERC did finally take action, newly appointed Chairman
Richard Glick wrote that he was deeply frustrated with the,
quote, ``disregard that Midship has shown for landowners and
communities along the route'' of the Midship Pipeline. He also
stated that it was, quote, ``past time for Midship to promptly
resolve these issues and allow the landowners to move on with
their lives.''
I went directly to Cheniere to ask them, what are they
doing to rectify the situation on the ground for these property
owners? Last year, they told my staff and FERC that the damage
would all be repaired by June 30, 2020--June 30 of last year.
That day came and went. Cheniere's promise was not met. Now
Cheniere is promising that all of the landowners' property will
be restored by May 17, less than two weeks from now.
At this point, the landowners have lost faith and trust in
Cheniere's ability to properly repair their land. They have
asked instead for Cheniere to compensate them for their cost to
hire their own contractors to repair their damaged property.
The farmers estimate that repairing the outstanding damage
totals between $20 million and $40 million.
So, I want to be clear about something. These are
individual farmers for whom millions of dollars is a huge
amount of money, but to Cheniere that amount is barely a
rounding error. According to Forbes Magazine, Cheniere earned
$9.3 billion in revenue and has $38.2 billion in assets. The
amount that it would take to repair the farms that Cheniere
destroyed to build its pipeline pales in comparison to its
total corporate worth. It's also a small fraction of what
they're earning from this pipeline.
This is a story of David and Goliath. The individual
landowners have legal rights, but, in practice, FERC allows
corporate Goliaths like Cheniere to have their way. This is
business as usual for decades at FERC. The bottom line is that
FERC has enabled Cheniere, a multibillion-dollar company, to
withhold from these farmers an amount of money that is chump
change for them but is life-altering for the farmers. How can
this go on?
For the landowners in Oklahoma, FERC is simply not doing
its job as a public regulatory agency. It's basically working
for the private companies.
Oklahoma farmers are not asking for the Moon. They are
asking for simple vindication of their basic rights in their
land. They are only asking Cheniere to fix what they broke.
That's their right.
I hope that today we will get to the bottom of why that
hasn't happened yet under such a long-running and well-
developed legal regime that certainly protects the rights of
the companies.
With that, I want to thank our ranking member, Mr.
Sessions, for joining us, and I'm glad that he has arrived. I'm
delighted that we're launching the work of this subcommittee
this year with a problem, and hopefully with solutions, where
we will have broad, bipartisan agreement about the need to
protect the property rights of American citizens. And I hope we
can work together on all necessary reforms in a creative and
cooperative way.
With that, I now am happy to recognize the distinguished
ranking member, Mr. Sessions, for his opening statement.
Mr. Sessions. Chairman Raskin, thank you very much, and to
our panel and to the members who are prepared today to talk
about this important subject.
There's no question that the building of pipelines to
transport energy to America is a proper use of eminent domain--
the process by which the government can put property to a
public use after paying just and proper compensation to a
property owner. That's how things like highways, public
schools, and public hospitals are built as well.
But there is a responsibility--as the young chairman has
noted, there's a responsibility not just under the law but also
under regulatory agencies to not only do their job but to
ensure that the public good is represented.
Let me also say that these companies that do do the hard
work, that come and do the things that are necessary, must be
interested in not turning their back on their full
responsibility. And that is where public policy and proper
utilization of the free enterprise system combined with the law
come to meet with eminent domain.
While Americans may take issue with any particular eminent-
domain project that is conducted, Americans overwhelmingly
support this balanced approach for not only America's energy
industry but other industries also.
In particular, it is the energy industry, because Americans
need energy at their homes. We need energy, enough energy,
whether it's above ground or below ground, to make sure that we
can turn this economy, the world's greatest economy, into not
only jobs but production on behalf of the American free
enterprise system.
Americans understand that natural gas is critical to the
health and sustainability of the American economy. And for many
years, we in Texas have gotten used to not only understanding
that this clean resource that is abundant to this great Nation
can be utilized in balance with other ways that we provide
electricity and energy to our country. But, the sustainability
of the American economy is built around effective use of
pipelines that safely ensure that the transfer of energy is
available to all consumers and industry.
Indeed, one news report about the very pipeline at issue at
this hearing today states that the property owners affected,
quote, ``don't cite concerns about climate change or even
object to having a pipeline on their land.'' Most have already
been through this. They're fine with that. What they have a
problem with is that we have to follow up to make sure that
this balance is achieved.
In my own state of Texas, property owners have had their
fair share--or, should I say, unfair share--of negative
experiences with pipeline projects, just as what we're talking
about here. It's not a one-on-one basis, but it really gets
down to that, that we need a better way to look at pipelines
and oversight.
This was done years ago as we had pipeline failures across
my state and very close to the congressional district that I
was honored to represent. And that is why we have a continued
opportunity, just as we do today, to not just reexamine but to
look at and push industry and to push regulators.
The president of the Texas Farm Bureau, Russell Boening,
has said, ``We know that we must have the means to move people,
goods, and energy across Texas, but private property owners
should be treated fairly'' as they give up their property to
these sorts of enterprise.
Mr. Chairman, what we're doing here today did come as a
result of a bipartisan approach that you have taken. In the
conversations that we had between your staff and my staff, we
looked at and you fairly asked us, what would we like to look
at, what would be within our bailiwick of issues? You accepted
that. We are doing that today.
And so I want to thank you. Our relationship is important.
The relationship of our members to each other is important. And
for us to work together, it does mean that we don't have to
agree on the issues but we do have to address them.
So, I want to personally thank you not only for listening
to me but listening to us. And there are always examples of
things we all wish we would do better. Perhaps there are
failures. But your agreement and the agreement of your staff to
work on this proposal is one that we appreciate, and I want to
thank you.
I would like my full text of my speech that I did not give
to please be included, Mr. Chairman. I'll make sure you have a
copy of that. And I want to thank you very much and thank our
witnesses for being here today.
Mr. Raskin. Well, without objection, that will be entered
into the record, Mr. Sessions. And thank you for a very
thoughtful and significant opening statement, and I thank you
for your kind words.
I'll now introduce our witnesses. The first one is Rob
Squires, who's a landowner advocate at Squires Consulting. Then
we will hear from Sam Gedge, who is an attorney with the
Institute for Justice, which is a legal think tank in
Washington, and I think also in Texas. Next we will hear from
Christopher Smith, who is the senior VP for policy and
government affairs at Cheniere Energy. And, finally, we'll hear
from Terry Luber, who is a farmer in Oklahoma.
I'm really delighted that all of you have joined us.
The witnesses will be unmuted so we can swear them in.
If you would all be kind enough to stand and raise your
right hands.
Do you swear or affirm that the testimony you are about to
give is the truth, the whole truth, and nothing but the truth,
so help you God?
Let the record show that all of the witnesses have answered
in the affirmative.
Thank you.
Without objection, your written statements will now be made
part of the record.
And, with that, Mr. Squires, you are recognized for your
five minutes, and thank you for your patience.
STATEMENT OF ROB SQUIRES, LANDOWNER ADVOCATE, SQUIRES
CONSULTING, LLC
Mr. Squires. Thank you, everybody, for having me on. This
is a great honor.
So, my name is Robert Squires, and I work in the oil and
gas industry on the side of landowners who are affected or
crossed by natural gas pipeline projects, including the Midship
project and several others. I received bachelor's degrees in
the fields of sociology and geography from Kent State
University and received my master's degree in geography from
Kent State University as well.
I work closely with other landowner advocates, landowner
representatives, and landowners themselves to help document
issues with construction and restoration, notify the company
and FERC of these issues, as well as guide the landowners
through cumbersome FERC processes.
I began working on the Midship project in June 2018, a few
months before FERC approved the project in August 2018. Since
then, there have been many noteworthy events that have led us
to where we are today. I'm going to run through some of these
events. This is not an exhaustive list, but I would request
every member of the committee to please look at the attachments
that I've included in my opening statement.
So, on August 13, 2018, FERC approved the project. Three
weeks later, Midship initiated condemnation proceedings in U.S.
Federal court. A few months after that, in February 2019,
Midship began construction. In July 2019, FERC issued a stop-
work order on Midship for dozens of repeated or unresolved
construction-related non-compliances. Later that month, July
31, FERC allowed Midship to resume construction.
In April, April 1, 2020, Midship requested FERC to place
the project into service. Two weeks later, April 13 and 14,
myself, Midship, FERC, the FERC compliance monitor, and various
landowners conducted joint inspections of the landowners'
properties and found numerous restoration issues and project-
wide ongoing noncompliant activity.
Two days after this, Rich McGuire of FERC's Office of
Energy Projects approved the Midship request to place the
project into service in spite of the information that we had
provided to him.
On August 11, 2020, Midship reported to FERC that all
restoration activities had been completed throughout the entire
project. This set off a series of events involving the
landowners basically going out and checking Midship's work,
finding that the work had not been completed, contrary to what
they had publicly stated to the FERC, going to FERC, notifying
them. Midship returns to the property, does the same thing,
tells FERC that it's completed. The landowner has to, on their
own time and on their own dime, go back out and basically
continually disprove that Midship is--or prove that Midship is
lying over and over again about the work they've completed.
This cycle continues today.
On March 18, 2021, as Mr. Raskin noted, FERC issued an
Order on Environmental Compliance toward Midship. This order
directed Midship to take immediate action to remedy the
unresolved restoration issues within 60 days of the date of
that order. As of today, Midship has 13 days left on this
order, and on every property that I have seen they have done
work on, they have not made any meaningful advance toward
actually resolving these issues.
If there's any takeaway from the above timeline of events,
it is that Midship has proven themselves to be a company that
is unable to be regulated. Not only have they treated the
landowners poorly and their lands even poorer, but they
disregard orders from FERC time and time again. Even more
disturbing is the fact that FERC allows them to disregard its
orders with no repercussions.
Until March 18, 2021, there had been no inkling of
repercussions toward Midship's repeated dismay for accepted
regulations and construction practices. The March 18 order
makes clear that FERC has the ability and jurisdiction to hold
Midship accountable.
Chairman Glick states in this order, and I quote him:
``There must be consequences when the certificate holder fails
to adequately fulfill these responsibilities. For instance, we
can refer the matter to the Office of Enforcement for civil
penalties. We can also consider whether to revoke their
certificate of public convenience and necessity itself. In my
opinion, both options should be on the table if Midship fails
to promptly resolve its outstanding obligations to
landowners.''
I wholeheartedly agree with that statement. If Midship
cannot resolve these things within the next 13 days, they must
be shut down.
Every landowner will tell you the same thing. Midship
approached them with an initial offer; the landowner wanted
more. Midship came back a month later or so with a lower offer,
and the landowner refused. Midship said, ``We will condemn you,
and you will have no say-so because it is a FERC pipeline.''
The landowners did not sign and, thus, were brought into an
eminent domain proceeding. This initial unreasonableness
carried over into nearly every aspect of the project from that
moment forward.
These Oklahoma landowners are not in any way adverse to the
oil and gas industry. Many of them have several pipelines or
gas wells on their property already or work in the industry
themselves. They just want to be treated fairly.
Every landowner I have talked to echoes this sentiment,
that they have been taken advantage of through complex
processes, legal intimidation, and Midship's ability to
manipulate the facts on the ground----
Mr. Raskin. Thank you, Mr. Squires.
Mr. Raskin. We're going to come now to Mr. Gedge.
STATEMENT OF SAMUEL B. GEDGE, ATTORNEY, INSTITUTE FOR JUSTICE
Mr. Gedge. Thank you, Chairman Raskin, Ranking Member
Sessions, and members of the committee.
My name is Sam Gedge. I'm an attorney with the Institute
for Justice. We're a nonprofit law firm that litigates to
protect private property rights, and one of our areas of focus
is combating eminent domain abuse.
Unlike my co-panelists, I'm not going to talk today about
the Midship project specifically. Rather, I'd like to focus on
a couple of examples of the broader systemic imbalance between
pipeline companies that exercise eminent domain and the private
landowners that have the misfortune of finding themselves in
the way.
First, at a structural level, condemnations by pipeline
companies are far more disruptive and far harsher than
condemnations executed by the Federal Government itself, and
that's because, unlike the Federal Government, pipeline
companies get to take land first and pay later. In this way,
pipeline condemnations differ fundamentally from every other
type of eminent domain exercised under Federal law.
Ordinarily, when the Federal Government itself wants to
exercise eminent domain, landowners get compensated before the
government enters on their property. Under a straight
condemnation, for example, the government doesn't get your land
until the courts have determined the value of the property and
until after the government has paid you.
Likewise for what's called ``quick take,'' which is a
speedier form of condemnation. There, the government can get
immediate access to private land, but the government also has
to pay the landowners immediately. Up front, the government has
to pay a fair estimate of the value they're taking.
In short, when the Federal Government condemns property,
Congress has gone to great lengths to ensure that payment
predates possession--in other words, that landowners get
compensated before the government enters on their land. That's
only fair.
But things are entirely different when it comes to pipeline
companies. Routinely, pipeline companies file condemnation
actions under the Natural Gas Act and secure what are called
preliminary injunctions against private property owners. Those
injunctions entitle the pipeline companies to immediate access
to the land they want, yet, critically, the injunctions impose
no immediate obligation on the companies to pay the landowners.
It's take first and pay later, with ``later'' being months or
even years down the road.
This state of affairs is profoundly unfair and profoundly
unjust, and it follows, candidly, from the Federal courts
misreading the Natural Gas Act.
When a pipeline company enters on your land, it imposes
serious and immediate burdens. Landowners find themselves with
construction equipment on their property, they find themselves
with debris strewn about, with wildlife killed and left to rot,
and, of course, with the loss of the sense of security that
comes from being on your land and knowing that no one can take
it from you. The least we can expect of pipeline companies is
that they pay people before they visit those burdens on them.
Across the Nation, though, pipeline companies accelerate
the parts of eminent domain that they like, the taking part,
while slow-walking the part that they're less excited about,
the payment part. And without congressional intervention, the
Federal courts have made clear that they're willing to let
those land-grabs continue.
Not only do pipeline companies enjoy this take-first-pay-
later dynamic, but they can also take land even if the pipeline
might never get built. Now, in your run-of-the-mill taking
case, the government doesn't get to take your property until
they get the necessary approvals to actually build the project,
but here, too, pipeline companies are different. Because under
the pipeline permitting process, FERC can say to a company,
``You have our permission to build your pipeline, but that
permission is conditional on getting a bunch of permits from
other agencies over there,'' and, on the basis of that
conditional permit, the pipeline companies instantly get the
full power of eminent domain. What that means is that they can
immediately enter on your property, take easements, tear up
your land, even though the property might ultimately--the
pipeline, rather, might ultimately never get built.
Now, these are just two examples of what I think is a
broader phenomenon: pipeline companies exploiting FERC and
exploiting the Natural Gas Act to disadvantage private property
owners. This is a national problem that can take place in any
district. Certainly we're aware of similar issues in Texas of
particular concern to Ranking Member Sessions.
At the best of times, eminent domain is disruptive and is
harsh and often falls hardest on people who lack political
clout. And when it comes to pipelines, the eminent domain power
is a product of Congress. And, for that reason, the scope of
that power and abuses of that power are, we believe, a strong
candidate for congressional attention.
Thank you.
Mr. Raskin. Excellent. Thank you very much, Mr. Gedge, for
your testimony.
Next we'll hear from Christopher Smith, Mr. Smith, from
Cheniere Energy.
STATEMENT OF CHRISTOPHER A. SMITH, SENIOR VICE PRESIDENT FOR
POLICY, GOVERNMENT AND PUBLIC AFFAIRS, CHENIERE ENERGY
Mr. Smith. Thank you very much, Mr. Chairman.
So, Chairman Raskin, Ranking Member Sessions, and members
of the subcommittee, my name is Christopher Smith, and I'm the
Senior Vice President for Policy, Government, and Public
Affairs for Cheniere Energy.
Cheniere is the largest exporter of liquefied natural gas
in the United States. Since we began operations in 2016, our
LNG has helped displace dirtier fuels like coal, cleaning the
air and cutting carbon emissions, while enabling the deployment
of renewable energy. The American energy infrastructure we are
building represents a more-than-$30-billion investment,
creating thousands of jobs, supporting suppliers across the
country.
One of the infrastructure projects that we have undertaken
is the Midship Pipeline, an approximately 200-mile natural gas
pipeline in Oklahoma. Unlike our typical projects, it is not
connected to our facilities, nor directly to our LNG
production, but, rather, is a separate investment in the larger
natural gas transportation system, providing access to new
markets for Oklahoma's abundant natural gas.
Since this project was announced, we have worked to
proactively engage with landowners and over 1,000 stakeholders
in total so they're informed, involved, and heard throughout
the process. Because of that work, we've enjoyed a positive
relationship and a two-way dialog with the majority of
landowners throughout this project and have been able to
quickly address their concerns.
I want to assure the committee that we're doing everything
we can to resolve the issues identified in the FERC order, and
we have dedicated a team working around the clock to do so. In
fact, today we have several members of the team in Oklahoma
meeting face-to-face with landowners.
Under our FERC certificate, we are required to restore
land, and I want to provide an update on those efforts. Just to
give the committee perspective, the pipeline project is a total
of about 200 miles, and today we're talking about approximately
21 miles identified in the FERC order that require restoration.
As of today, over 75 percent of the identified tracts in the
FERC order have either been completed or are awaiting
inspection results from FERC or have reached agreements for
alternate arrangements.
Midship is engaged in FERC's voluntary third-party
compliance program, where FERC monitors are on the ground
reviewing our work along with our environmental inspectors and
those retained directly by landowners. We currently anticipate
meeting all of our restoration obligations under the order by
the May 17 deadline, with the important caveat that alternate
arrangements are being pursued in some of those cases.
Ahead of the March order, we voluntarily entered into the
FERC's Alternate Dispute Resolution process, known as ADR. This
process yielded success, as we have entered into ADR with many
additional landowners with whom direct discussions have
stalled. We've also engaged in dozens of bilateral settlement
discussions that have resulted in successful resolution.
There's a clear path forward that all parties are following
to meet the goal of completing remaining restoration work
identified in the FERC order or reaching alternative
arrangements in compliance with relevant FERC requirements.
As we speak, active negotiations are occurring on the
ground between landowners and project representatives. So,
while I will do my best to address the overall progress that we
have made, I want to protect the productive process that we
have established and with which we are coordinating with FERC.
We understand and take seriously the concerns voiced by
specific landowners as well as by this committee. Midship hears
those concerns, and we are taking all reasonable steps
available to remedy and resolve the remaining challenges as
part of our responsibility to landowners.
Again, thank you, Mr. Chairman, for the opportunity to
appear before the committee, and I look forward to fielding
your questions.
Mr. Raskin. OK. Thank you.
And, finally, we will hear from Terry Luber.
Mr. Luber, you have five minutes.
STATEMENT OF TERRY LUBER, OKLAHOMA FARMER
Mr. Luber. Thank you, everyone. Good morning.
In August, this farm I own is going to be in the family for
111 years, and I'm the fourth generation. I had it for three
months before Midship came in and destroyed it.
I have a series of terraces and a water well on my
property. And the terraces, they drain the water and save the
silt. The waterway does the same thing; it's just a larger
drainage ditch. It carries the water off the property.
Midship let this go unchecked with soil retention measures
and actually just destroyed it. There are so many metric tons
of soil gone that I had to use my topsoil that they piled on
the side to fill the waterway and let it erode away again. So,
I mean, it's basically--it's unfathomable how much it's going
to cost to fix that.
They've been in several times and showed they're inept. One
of their inspectors, compliance inspectors, from FERC, came out
and was standing on the waterway and asked me what a waterway
and a terrace is. I mean, how can you write the rules--this
person said they wrote the rules for this. How can you do that
and not even know what a waterway and terrace is?
On the other end of the property, I have a gate opening.
It's about 40-foot-wide. They were warned with emails and
verbally that this needed to be a hard crossing. I bring a semi
in and heavy trailer with a track hoe and, say, a dozer. And
they cut the bore section in the middle of the gate. So,
basically, what I have is soft dirt on half the side of the
gate and solid dirt on the other side.
When the semi swings in, they always have to swing wide,
and you have the potential for the wheels on the trailer or the
truck to sink in on the soft side. They dug a hole for their
weld joint 40-foot-across, 70 feet wide, and 11 feet deep. So,
that pipe is suspended four feet, probably, from its bottom in
unstable soil.
So, a potential rollover, the driver may survive. If it
dents the pipe, the pipeline is damaged. If it breaks at the
weld joint, which is a distinct possibility, and you have a
flare-up, that driver has absolutely, has no chance of
survival.
The creek is less than a football field away, and you're
going to have thousands of barrels of liquid natural gas
pollute the creek, and it will go for miles. And that's what
people, you know, water their livestock and stuff. It's
everybody's livelihood.
They cut trees and left them in the floodplain. I asked
them to move. Some of them floated out in a flood, got on the
west-side creek bank, which is about 30 feet high, and we lost
about 10 feet of soil on the creek bank. We haven't lost that
much in 50 years.
The environmental issue because of that will surely make
the national news. And I don't want anybody killed on my
property. And they had fair warning. And I don't know how we're
going to fix that now. It's the only place I can have that gate
gap to get to the west end of the creek.
These people absolutely knew they were going to get eminent
domain. And this is no different than, if you think about it,
someone coming to your door, kicking the door in, making you
stand there and watch while they destroy everything you care
about that's been in your family for generations and walk off
and say, ``You better be glad we didn't do anything more.''
They knew they could get eminent domain.
There are so many issues there's no way I can get it in in
five minutes. I would invite everyone to look at the statement
that I sent in, the written statement. And, like Rob said
before, the contract is--they use the fear factor like a sword.
And thank you.
Mr. Raskin. Mr. Luber, thank you. You do have--you did have
one minute left, if you wanted to conclude.
Mr. Luber. Well, I can tell you this much. If we wouldn't
have had Central Land's services, I don't think we ever
would've got to this point. They were relentless.
And I want everyone to know that the Midship attorneys used
the fear factor all the way through this entire event. I'm sure
they got many, many landowners to sign because of the fear
factor that they used. It was intimidating all the way through.
And I think you're on the right track to give the
landowners some say. I had zero say and zero help from FERC.
Thank you.
Mr. Raskin. Thank you very much for your testimony.
And now we will go to member questioning, and we will begin
with my questioning. I'm going to recognize myself for five
minutes for questions.
Let's see. Mr. Gedge, let me start with you. You describe
this whole ``take your property now and pay you for it later,
maybe'' system as profoundly unfair and unjust. I've got two
questions about it; one is constitutional.
Has anybody ever challenged what you describe as this
unique process that the pipeline companies get through FERC as
a violation of the Fifth Amendment Takings Clause? Why doesn't
this violate the Fifth Amendment?
And then, second, if this has been litigated and
adjudicated, then what is it Congress would need to do to at
least get people in Mr. Luber's situation the same rights that
other property owners get in terms of getting paid up front?
Mr. Gedge. Right. Thank you, Mr. Chairman.
I think the constitutional argument would be a heavy lift
for a couple of reasons. First, since I think the 1880's or so,
the Supreme Court's said that under the Fifth Amendment there
is no requirement that payment, that just compensation, predate
the actual taking. So, as a constitutional matter, that seems
like it's probably off the table under current doctrine.
As a practical matter, moreover, lots of property owners
just don't have the opportunities to raise all of the defenses
they might have because--and this is, I guess, a little bit
outside the scope of my testimony--but because there are
serious notice problems, and a lot of people who end up being
targeted for eminent domain in these situations have
unwittingly lost the opportunity to seek judicial review of
many of the issues that they might be able to.
So, I think, as I said, the Fifth Amendment issue is a
difficult one----
Mr. Raskin. OK, OK. All right, good. Well, we'll be
interested to hear from you about what you think a good
legislative fix would be for that. I'll come back to you.
Mr. Smith, what is your company's incentive to repair and
restore people's land, like Mr. Luber's land, when the
pipeline's running and you guys are, you know, making money
hand over fist on it now? What is your incentive to clear up
the problems you've created on their land?
Mr. Smith. Well, thank you so much, Mr. Chairman, for that
question.
So, when we think about Cheniere's business model and how
we operate--so, over the course of the last decade, we've put
in place around $30 billion worth of assets. In order to do
that effectively, it requires us as a company to create
sustainable, sustained, long-term relationships with a very
wide range of stakeholders, be that off-takers, customers----
Mr. Raskin. Why are the relationships so terrible with
these farmers now?
Mr. Smith. Well, to that point, Mr. Chairman, there are
going to be some points of question here in this hearing that
at this time I'm not going to have complete, satisfactory
answers to. When I look at what our standard is as a company
and the successes that we've had as a company in creating those
type of long-term relationships for our corporation----
Mr. Raskin. OK. Forgive me for interrupting, but when I
spoke to you guys before, I asked you what percentage of the
work in the March 17 order had been deemed complete, and
several Cheniere executives could not tell me, said that they
couldn't provide me even with ballpark numbers of what
percentage of the work had been completed.
In a followup discussion, your staff said it would be able
to provide those percentages in weekly updates. Since then, two
weeks have passed where we've not gotten any weekly updates.
Your staff said those numbers would be included in your
written testimony today. They were not included.
Hey, look, if you can't keep your promises to us and the
whole world is watching, what should make us believe you're
going to keep your promises to people like Mr. Luber when
nobody even sees what's going on?
Mr. Smith. Well, Mr. Chairman, we are making progress on
the list of issues that were identified in FERC and that
compliance order in Appendix A. So, in that order, there were
56 tracts that the FERC monitors identified that we had to
address. And so, right now, as we speak, literally at this very
moment, we have crews on the ground, we have our folks that are
in Oklahoma talking to landowners, sitting at their kitchen
tables, walking their land, discussing these issues as we
speak. And of the 56----
Mr. Raskin. Well, that sounds great. What percentage of the
work in the March 17 order has been deemed completed?
Mr. Smith. So, of the 56 items, of the 56 tracts that were
identified in that order, we have already addressed 41 of those
tracts. So, of the 56, we've addressed 41.
Mr. Raskin. When you say you've addressed them, what does
that mean? You've completed the work?
Mr. Smith. So, what that means, Mr. Chairman, is the work
has either been completed or that we are awaiting inspection
from the FERC monitors.
So, we are working with FERC as the referee. Their folks
are on the ground to make sure that they're identifying any
issues that might be----
Mr. Raskin. OK. Forgive me. I just have a moment left.
Mr. Luber, let me come to you finally. Tell me how the
power of eminent domain that's basically been delegated to the
companies through this FERC system, tell me how that power has
affected your rights and the state of your land today.
You've got to unmute, if you would, Mr. Luber.
Mr. Luber, I'm afraid we can't hear you.
Ms. Tlaib. Mr. Luber, it's just--the unmute button, if you
see the red mic, you can see a little X or a little slash on
the red mic. Just click on that. I think you have it in front
of you.
Mr. Raskin. Do you see the little unmute function?
All right. Well, I'll tell you what. While you guys search
for that----
Mr. Luber. Sorry.
Mr. Raskin. Oh, there you go.
Mr. Luber. I'm sorry. I'm here.
Mr. Raskin. OK.
Mr. Luber. I touched something, and it took me out. I'm not
very technologically wise.
OK. It affected me in incredible ways. If I had to pay out
of pocket to fix the stuff that Midship tore up, it would cost
me almost as much as the farm is worth. And----
Mr. Raskin. So, you'd have to sell the entire farm to fix
the farm, you're saying.
Mr. Luber. That's basically it. I'd pay twice for my farm.
And I forgot a while ago, I was a pipeline inspector for
eight years, so I know what I'm looking at. And so, I mean, I
know what these people have done, and I know what pipeline
practices are, and this wasn't it.
Mr. Raskin. All right.
Yes, let me just say finally, you seem like a pretty
reasonable guy. Did you try to operate with them in good faith
and say, look, you know, you've torn up the land, we need you
to put it back, and so on? I mean, you don't seem like an
especially litigious guy.
Mr. Luber. No. I've worked in----
Mr. Raskin. Were you trying to work with them?
Mr. Luber. I worked in the oil field for eight years as an
inspector, and I worked I don't know how many years as a
contract welder. I'm not against pipelines at all. And I want
to try to get along. But once I balked on their first offer, it
absolutely went downhill after that, and to no good end. All I
got was lip service out of them.
Mr. Raskin. Yes. OK. Thank you very much.
My time has expired, and, Mr. Sessions, I turn it over to
the ranking member now.
Mr. Sessions. Mr. Chairman, thank you very much.
Not only to our three witnesses, Mr. Gedge, Mr. Luber, and
Mr. Smith, I want to thank you. Your testimony taken by itself,
notwithstanding the entire project, is what I think our young
chairman is focusing on and I would like to also.
But I would like to ask Mr. Smith: Mr. Smith, the need of
our Nation is great. The need to make sure that we have not
only pipelines but that we have safe pipelines and that we get
our product to consumers is very important.
You have heard Mr. Gedge to outline some of his ideas,
notwithstanding about maybe the way courts are interpreting the
Natural Gas Act, but he outlined a rather broad spectrum and
that is an agreement to look at the law of, up front, there is
a better agreement and understanding, I would say, that's a
more balanced approach.
But can you talk with us about the impact of what Mr. Gedge
has said?
Because the reasonability of a balanced approach, I think,
is what not just Americans want but what we would want in the
law. We would want the law to fairly be on the side of the best
interest of consumers, which means properly applying what might
be these rights to come in and get land, but once that is
achieved, that process would be fair.
Mr. Smith, would you mind taking a minute and talking with
us about a level playing field from a perspective of someone
that does pipelines?
Mr. Smith. Well, thank you very much, Congressman, for that
question. There's a lot there in that question, so I'll try to
address the questions that you're asking or the spirit of the
question.
So, in my previous life before I came to Cheniere, I was a
regulator. I was with the--or had some regulatory
responsibilities as an official in the Department of Energy,
and I've worked with FERC on projects like this. And one thing
I can say firsthand is that there is, from the regulator's
point of view, there's a terrifically difficult and important
piece of work they have to do in terms of determining the
public interest.
And determining the public interest means they have to
quantify it, they have to make sure it's consistent with
statute, they have to make sure it's consistent with court
cases, and then they have to put forth a series of regulations
that then quantifies that in a series of steps that can be
followed----
Mr. Sessions. Do you believe that's a balanced process,
currently, that FERC has as their mission?
Mr. Smith. Well, I would demure on opining on, you know, on
the law as written by Congress or interpreted by FERC, who
regulates us, with all respect, Congressman.
What I'll say is, I do know that they have an important
balancing act to make sure that these important infrastructure
projects get built that are going to create jobs but also
ensure the energy that our country needs, at the same time
making sure that there's a process to protect the landowners
and other stakeholders in the community. It's not just
landowners; it's other groups that might be impacted in some
way by this infrastructure.
So, that's FERC's job. And if you look at, you know, what
the Natural Gas Act says and if you look at the way that that's
been interpreted by FERC, that is what they're endeavoring to
do in all of their environmental impact statement requirements
and their certification processes. They're trying to create
that balance.
And I, again, firsthand, can say that that is--that's
difficult but very, very important work the regulator has to do
Mr. Sessions. OK.
If you could move, then, directly to a pipeline company and
how you feel like--and, Mr. Chairman, I think this is really
important in this hearing, is to equally hear--we have heard
some other problems. And Mr. Luber--I greatly appreciate his
not only perceptions but the actual realities
Mr. Smith, how would we have balanced this in looking at
this process? I understand--look, I was with a large company.
We didn't do everything right. But we did what you say you're
doing, and that is trying to pay attention, focus on it, and
fix it.
What would the upfront changes be that you have heard about
today of a balance that would offer more balance between your
need, your desire, FERC, and the landowner?
Mr. Smith. Well, here's what I can say to that question,
Congressman.
You know, in the chairman's question, you know, he asked us
about our progress on Appendix A of the FERC order. We're
making progress. We are moving forward. You know, we have moved
through over 70 percent of the issues that have been identified
by FERC in that order in the period that we have, with the goal
of making sure that we comply with that order by the deadline,
which is the 17th.
Your broader question is--I would say that it is certainly
in our best interests to do this well. And I can say that, as I
compare other endeavors that our company has had and the types
of long-term relationships we've created and if I compare that
with, you know, from what I'm hearing from Mr. Luber and from
Mr. McElvany and Mr. Morris that we saw in the video that the
chairman put out a couple days ago, that's not consistent with
the standard that we need to reach in order to make sure that
we're operating properly.
So, there are some things that we will have to do
differently. And we will understand that better after we finish
the important, vital, immediate mission of making sure that we
remediate the problems that are in front of us right now.
Because after these things are fixed, we're going to have to
come back and make sure that, over time, that the remediation
that we've put in place has worked, that the vegetation's grown
back, the erosion is stable, that all these other things are in
place. And that is a multiyear engagement that we're going to
have with all these landowners. And we need to do that well.
So, that's the best answer I've got to that, Congressman.
And I'm sure that there will be--you know, there will be
further dialog in this committee about that issue.
Mr. Sessions. Mr. Smith, thank you very much.
Mr. Chairman, I would yield back my time and appreciate the
young chairman for allowing us--Mr. Smith the time to complete
his testimony on this question.
Thank you, Chairman.
Mr. Raskin. Thank you so much, Mr. Sessions.
We come now to Ms. Wasserman Schultz for her five minutes
of questions.
Ms. Wasserman Schultz. Thank you, Mr. Chairman.
And I thank you for the opportunity to have this hearing.
This is not an issue that most of us are exposed to from around
the country, and the egregious treatment of farmers by Cheniere
is really an important topic, especially because it's caught
the attention of FERC, really, clearly, to have them take
unprecedented steps compared to other cases that are similar.
The farmers who are affected by Cheniere's seemingly
reckless disregard for their legal and moral obligations,
they're not strangers to pipeline companies. And listening to
the testimony, many of these landowners have multiple pipelines
running through their land and have had much more cooperative
interactions with other companies.
So, Mr. Luber, I appreciate the really lengthy commitments
that your family has had to your farm and really the
imposition, which is the mildest word that I could use, the
impact that that's had on you. But what you can you say about
how Cheniere's behavior toward landowners compares to other
pipeline companies?
Mr. Luber. Well, I've got some other pipelines on my
property now that came after them, and I didn't have any
troubles with them. Normally, they negotiate with the landowner
their wants and needs. And no one knows how to take care of the
land better than the landowner. And I will say that most
pipeline companies all think they know better.
But I was not consulted about anything. Anything I asked
for was deaf ears, you know, lip service. And this truly is a
David and Goliath story. They did not try to do anything right.
And I believe, out of spite, because I got them to do that
bore, I believe that's why they cut that pipe in the middle of
my gate opening and made a mess out of that. And that's the
only place I can have that gate. And I have no idea how to
resolve that.
Ms. Wasserman Schultz. And, as you said, it's very clear
that they operated with, you know, a background of fear,
because they knew that they could just take your property by
eminent domain unless you just rolled over and agreed to
whatever it is that they had proposed, correct?
Mr. Luber. That's exactly. I mean--and once I refused that
first offer, everything just was just a disaster. And they
blamed it on Central Land, they blamed it on the landowners,
they blamed it on the weather. We did have very inclement
weather through that, but--I worked with so many different
pipeline companies. Everything, you just use common sense. They
didn't do any of that.
And I have, I don't know, 1,000 to 1,500 pictures and some
videos to prove every bit of what I said.
Ms. Wasserman Schultz. Well, I mean, to me, it seems like
Cheniere has adopted an unnecessarily hostile stance toward
landowners who would've otherwise been happy to have a
cooperative working relationship with them.
We've heard that Cheniere forced lowball offers onto
farmers by immediately seeking to exercise their eminent domain
powers in court rather than negotiate with landowners. In my
experience as a legislator, that's not how the eminent domain
process is supposed to work. There's supposed to be a
negotiation first. And, you know, I understand that sometimes
there are unreasonable landowners, but it seems like----
Mr. Luber. Yes.
Ms. Wasserman Schultz.--this was used, like you said, as a
weapon.
One farmer, Mark Morris, has several pipelines on his
property, and he called Midship the worst they've ever seen. He
said Cheniere refused to negotiate with him and said they feel
they're above the law.
Mr. Smith, do you think Cheniere is above the law?
Mr. Smith. Well, thank you for that question,
Congresswoman----
Ms. Wasserman Schultz. It's just a simple yes-or-no
question. Do you think Cheniere is above the law?
Mr. Smith. No.
Ms. Wasserman Schultz. OK. So, if you're not above the law,
then I assume you'll be fully complying with FERC's March 2021
order and restoring the farms by May 17 unless otherwise agreed
to by a particular farmer. Is that correct? I mean truly
restoring, not restoring by your definition, but by the
farmers' definition or by a mutually agreed definition.
Mr. Smith. Yes, we will be fully complying with the FERC
order and meeting the deadline set in that order.
Ms. Wasserman Schultz. OK. Because my understanding is that
there are definitely discrepancies where landowners are
saying--you're saying that you complied with that and restored
their land and they're saying you're not. So, we're going to
hold you to that, and, clearly, FERC has said they're going to
hold you to that.
The egregious behavior of Cheniere toward Midship farmers
is really just totally unacceptable. And, I mean, for--just
important to point out, in just the last year, Cheniere has
invested at least $100 million into Midship Holdings and is
still unwilling to make many affected landowners whole.
For the FERC Chairman to call for unprecedented
consequences, going as far as considering the revocation of a
pipeline certificate, clearly demonstrates the egregiousness
with which Cheniere has treated landowners in the pathway of
the Midship Pipeline.
Mr. Chairman, thank you for the opportunity to highlight
this really important issue. It impacts the environment. It
impacts landowners' rights. And it certainly, as evidenced by
the ranking member's comments, is not a partisan issue.
I appreciate the opportunity. I yield back.
Mr. Raskin. Thank you, Ms. Wasserman Schultz.
I yield now to my friend from Louisiana, Mr. Higgins, for
his five minutes of questioning.
Mr. Higgins. I thank my friend and colleague, Mr. Chairman,
and I thank the ranking member for holding this hearing today.
It's very important.
But, Mr. Chairman, I don't like eminent domain. And I'm
certain that if the Founders were with us today they would
agree that eminent domain, seizure of private property, should
be a last resort, and, if used, the landowners' rights should
most certainly be aggressively protected.
And that being said, I also recognize the significance of
major projects that are vital to our national security and
economic prosperity.
So, striking a proper balance is--you and I have spoken at
length about this, and I believe we concur that there should be
a balance. And we certainly have an appropriate role to play in
Congress regarding oversight.
I would like to state for the record that the pipeline
owner, Cheniere, has a facility in my district and is widely
seen as a welcome member of the community. They've participated
in promoting educational achievement through scholarship
programs and apprenticeships. They've made major investments in
local infrastructure. They were fast on a scene whenever a
hurricane comes through. After Hurricane Laura and Delta, they
were on the ground in southwest Louisiana helping folks in
need.
So, it must be stated that the company that's being
scrutinized today, my experience with them in our community has
been very positive. And yet we have a role to play. And they
should welcome this--they should welcome this level of
congressional oversight and inquiry, and I expect that they do.
Mr. Squires, I have a couple of questions for you, sir. And
I thank you for coming before the committee today, and I thank
you for the work that you do on behalf of landowners. It's an
important role that you play.
In your statement, you made it clear that you advise--
you're very well-versed in how the FERC regulatory process
works, correct, including how the regulatory process works in
case of disagreement? Mr. Squires, is that a fair assessment?
Mr. Squires. Yes. I would say so.
Mr. Higgins. OK. So, even if land is taken by eminent
domain, which I've already given my opinion of, or through
signed easements, FERC encourages the developers to remain
actively engaged directly with landowners involved in the
project.
This is a simple question. It may be a little uncomfortable
for you, but all of this is on the table. While working on
behalf of your clients, have you or the representatives of your
company prohibited Midship and Cheniere from directly engaging
with landowners? And, if so, wouldn't that cause a delay and
wouldn't that hamper the potential progress of reaching an
actual goal of agreeing on what restored land would be?
Mr. Squires. I personally have not forbade Midship or
anybody from reaching out to the landowners. Specifically, we
have encouraged Midship to reach out to the landowners,
specifically recently. But I personally have not, you know,
prohibited Midship----
Mr. Higgins. So, as far as you know--thank you for your
candor, sir. And, again, I thank you for the work you do. So,
as far as you know, Midship or Cheniere has not been restrained
from direct communication with landowners by your company or
representatives of your company?
Mr. Squires. Yes, as far as I know. Yes. Now, the----
Mr. Higgins. OK.
A final question for you, sir. Regarding the values of
lands and compensations for condemned land, are you aware that
Midship/Cheniere has placed into an escrow account in court an
amount equal to--my research indicates is double the appraised
value for landowners whose properties have been condemned
through eminent domain? Are you aware of that escrow?
Mr. Squires. Yes. They call that a bond. Yes.
Mr. Higgins. And so would you think that that property
assessment was valid? Is that an act of good faith on the part
of the pipeline, to place that money in an escrow account at
double the value of the land?
Mr. Squires. It is an act in good faith, but it is also
required by law. You know, for the injunction to take place,
they need to put up that bond amount. And that is based on----
Mr. Higgins. Sure. And we've been advised that everyone
intends to follow the law. I'd see no reason to doubt that.
Mr. Smith, in my remaining time, as I stated, Cheniere has
an excellent reputation in the community, and I'm concerned as
to why that perhaps is not the case in Oklahoma.
Would you share with America what your personal intent is
regarding resolving the remaining issues with landowners? Do
you care about these landowners? Does Cheniere cultivate good
relationships with pipeline-impacted communities? Are empathy
and compassion driving factors?
These are some of the thoughts on my mind. And in my
remaining time, please respond there, Mr. Smith.
Mr. Smith. Well, thank you, Congressman, for the question.
So, certainly, the standard that we have reached in
building and commissioning facilities--and it's being passed in
your district, Mr. Congressman, and in Corpus Christi, Texas--
that standard of long-term successful outreach to the community
that has created those types of bonds, we have not reached or
achieved that standard in Oklahoma on this project. And we are
doing everything in our power to make sure that we are
complying in a way that brings us to our normal level of
standard.
We have put our most senior business development executive
on this project. And, Mr. Chairman, when you spoke with us a
couple of weeks ago, you had an opportunity to talk to Mr.
Wyatt, who, again, is our most senior business development
officer of the company.
We've got teams that are on the ground as we speak at this
moment. We've got crews on the ground as we speak at this
moment. We are doing everything that we can to make sure that
we comply with this compliance order, with the goal of making
sure we're creating the right type of long-term relationships--
--
Mr. Raskin. Thank you. Thank you, Mr. Smith. And the
distinguished gentleman's time has expired.
I'm coming to Ms. Kelly for her five minutes of questions.
Mr. Higgins. Thank you, Mr. Chairman.
Ms. Kelly. Thank you, Mr. Chairman.
And welcome, to the witnesses.
Representatives from Midship and Cheniere assert that one
of the reasons restoration has taken so long is that a group of
landowners banded together to hire someone to advocate on their
behalf. According to Cheniere, having to deal with these
experienced advocates, quote/unquote, ``thwarted'' the
settlement talks.
For the record, Cheniere is a $38.2 million company and the
number-one liquefied natural gas producer in the country.
Mr. Luber, you are a part of the group of landowners who
hired consultants to represent you. Why did you decide to join
that group and hire outside help?
Mr. Luber. We were absolutely outgunned, as a landowner.
They hired the best attorneys. I mean, all the way through,
they have used the best attorneys. And we didn't have a chance,
if it wasn't for Central Land.
You know, it was such a lowball offer and such quick timing
on it. It was so unfair. And it was just our decision, my wife
and I, that we would go ahead and fight it out with Central
Land. And that's been a real blessing.
Ms. Kelly. Thank you.
Mr. Squires, you have a lot of experience with the FERC
process and natural gas pipelines. How easy or difficult would
you say it is for a landowner who doesn't have your level of
expertise to figure out the FERC process?
Mr. Squires. I would say it is extremely difficult. One,
most of the landowners don't even use email. So, you know,
getting online, figuring out how to go through the many-step
processes that involves even filing to the FERC docket is a
lengthy process.
Ms. Kelly. Thank you.
What are the advantages of landowners banding together and
seeking out an advocate for help with negotiations with
pipeline companies in general?
Mr. Squires. I think it's beneficial. You know, we're not
really there to be the negotiators but there to be their eyes
on the scene, to watch the construction, to monitor the
restoration, to make sure essentially that the company is doing
the right thing, you know, per the FERC guidelines or per, you
know, any other guidelines that they're supposed to adhere to.
Ms. Kelly. Sure.
The FERC process allows natural gas companies to seek
eminent domain, as we've been speaking of, so that they can
acquire rights to private land in court--a power usually
reserved for the government.
Mr. Smith, if someone took a member of your family to court
to assert eminent domain to take part of their land, would you
want them to have someone experienced to represent them?
Mr. Smith. Well, thank you for that question,
Congresswoman.
Yes, I would. And----
Ms. Kelly. OK. Thank you. That's all I needed.
If your family member hired a representative, that person
would presumably be the one dealing with the company and
advocating on your behalf. Isn't that what they're there for?
Mr. Smith. Yes.
Ms. Kelly. OK.
It doesn't surprise me at all that it's been easier for you
to reach agreement when you have isolated negotiations with
individual landowners that don't have the same resources or
experience as your company. It sounds to me that what Cheniere
is really upset about is that some landowners are refusing to
be steamrolled.
In addition to blaming the farmers' advocates for delay,
Cheniere has also accused landowners of purposely flooding
their own land.
Mr. Luber, would you ever flood your own land on purpose?
Mr. Luber. No, ma'am. I would never do that.
And I have never told them they couldn't do what they
wanted to do, even though I knew it was wrong. And I would like
to add that they used some real estate that was sometimes 20
feet out of their permit. They were out of compliance. And FERC
never addressed it, and neither did they.
Ms. Kelly. And you want your land to be fixed as quickly as
possible, I would assume.
Mr. Luber. Absolutely. And I know what it looked like
before. I've lived there all my life almost.
Ms. Kelly. And flooding it would delay restoration even
longer. Isn't that correct?
Mr. Luber. That is correct. And I don't know a farmer in
this world that's dumb enough to do that.
Ms. Kelly. I agree. This theory from Cheniere makes no
logical sense. These farmers are trying to get their farms back
to normal. Accusing them of damaging their own property is
extremely disingenuous.
I thank the witnesses again, and I yield back.
Mr. Raskin. Thank you, Ms. Kelly.
I now go to my dear Ms. Tlaib, the pride of Michigan, for
your five minutes.
Ms. Tlaib. Thank you so much, Chairman.
I do want to start off by letting Mr. Luber know--it's very
important for me for you to hear this: You are believed. I
believe you. Everything, the experiences you went through--I
know it's very hard, as you hear folks calling--I just want you
to know I believe you and you inspire me to work harder in
Congress.
Mr. Luber. Thank you.
Ms. Tlaib. Thank you.
So, I really want to start out with Mr. Smith and asking
you a question. Do you know the definition of ``misleading'' or
``to be misled''?
Mr. Smith. I do, yes.
Ms. Tlaib. Oh--oh, well, let me help you. I'm going to read
off the definition that I found on Oxford. ``Misleading is to
give the wrong idea or impression.'' Other words used in place
of ``misleading'' is ``deceiving'' and ``deceptive.''
So, Mr. Smith, yes or no, when your company submitted its
request to turn the Midship Pipeline on, your company knew that
they still had months of work left to fully restore the
landowners' farms harmed, correct?
Mr. Smith. So I----
Ms. Tlaib. Yes or no, did you all know? Yes or no? It's not
that complicated. Did you know this information?
Mr. Sessions. Mr. Chairman----
Ms. Tlaib. Oh, here we go.
Yes, Ranking Member?
Mr. Sessions. Mr. Chairman?
Mr. Raskin. Yes, Mr. Sessions?
Mr. Sessions. This issue is one that you and I both
respectfully, as well as the gentlewoman who is speaking,
respect and appreciate. We're trying to highlight the issue,
not the specific things that might still be in----
Ms. Tlaib. I think it's----
Mr. Raskin. OK.
Ms. Tlaib. If I may, Chairman, I think it's really
critically important----
Mr. Sessions. And I would consider that----
Mr. Raskin. All right.
Ms. Tlaib. I think it's important to understand that the
farmers and the landowners were misled.
Mr. Sessions [continuing]. And would ask that the
gentlewoman----
Mr. Raskin. All right. But wait, my dear friends, you know,
wait. It's going to be difficult if we're talking over each
other.
The time is Ms. Tlaib's time. Let's let her proceed. And I
think we're going to continue to proceed in a totally civil
way.
And, Mr. Smith, you're not taking any of this personally.
We understand you're sent here as part of your job----
Mr. Smith. Yes.
Ms. Tlaib. No. He works for the company. No.
Mr. Raskin. And, Ms. Tlaib, please continue.
Ms. Tlaib. Yes, absolutely. Just for you to know, Mr.
Smith, this is very much just me understanding if the people
were misled.
Mr. Smith. I understand.
Ms. Tlaib. Either your company knew or didn't know. That's
all I need to know.
Mr. Smith. So, we know that when we put the pipelines into
service that we will have a restoration plan. And that
restoration plan, in many cases, is a multiyear plan.
Ms. Tlaib. Sure.
Mr. Smith. We go out and do the work, and then we have to--
--
Ms. Tlaib. But in your request, Mr. Smith, in your request
to turn on the pipeline, you told FERC that you would need
until June 30 to finish restoration, yes or no?
Mr. Smith. In order to----
Ms. Tlaib. I'm talking about an application you submitted
to the Federal Government. Did you tell them that you need
until June 30?
Mr. Smith. Yes.
Ms. Tlaib. OK. So, if I have this right, the corporation
you work for, worth over $15 billion, wanted to start profiting
on the pipeline just a few weeks after it had been completed.
They misled the landowners and had months left to address the
damage they caused the farmers and their land.
We can leave that with no answer, but I just wanted to
explain.
And, again, this is not--this is me as an attorney, as
someone that has worked with so many residents that continue to
be, you know, run over and kind of dismissed, even though, for
many, as you heard Mr. Luber tell you, they did everything they
were supposed to, they did everything right.
And so, Mr. Squires, do you believe the public and farmers
were misled, yes or no?
Mr. Squires. Absolutely. I mean, Midship publicly committed
to doing numerous things that never actually occurred.
Ms. Tlaib. Yes. And I have personal experience where I have
companies, corporations that apply for air quality permits in
my district, which has one of the worst air qualities in the
country. They come with shiny posters and tell us they're going
to do all these wonderful things. Years and years of us
fighting for air monitors.
So, I am, personally, for me, watching my residents get
sick because they didn't implement it. And now hearing Mr.
Luber's experience is really tragic.
Is it fair to say that the company wanted Midship to start
generating revenue as quickly as possible and had no intention
of restoring farmers, Mr. Squires?
Mr. Squires. I would say so.
Ms. Tlaib. OK.
Mr. Squires. I would agree with that.
Ms. Tlaib. This is a tragedy and an example of how FERC's,
you know, pipeline approval process is broken. The company
could immediately start raking in cash, right, profiting, all
while hurting folks like Mr. Luber, who we represent in
Congress. We represent him. You know, Mr. Luber was literally
robbed out of his own livelihood, his income.
So, Mr. Smith, can you give me--you know, this is your
opportunity to do the right thing. Yes or no, will your company
commit to fully restoring--and if you answered other
colleagues, that's fine, but I really want a commitment on the
congressional record in this committee.
Will your company commit to fully restoring these folks'
property and compensating them in full for all damages and lost
income?
Mr. Smith. Congresswoman, we fully commit to fully
complying with the FERC order that's in front of us, which
means that we will work with FERC to ensure that we meet all of
those requirements.
Ms. Tlaib. OK. Great.
Mr. Smith. And, in fact, we are on the ground with Mr.
Luber right now, and I look forward to having the opportunity
to walk that----
Ms. Tlaib. And, you know, I hope it doesn't stop with Mr.
Luber. Because he testified here--I've seen this happen--you go
help him, but you don't help the others because they didn't
come. So, we will seek out others that you hurt, and we will
require you to please do the right thing.
You've committed it publicly. You should follow through on
that commitment and not mislead or deceive these folks that are
not against you--as you heard him. They were doing the right
thing. They were doing everything they were supposed to do. You
didn't follow through.
Last, you know, and, again, really important, Chairman, is
that we follow up and seek out any other information from FERC
in regards to what compliance they have, you know, followed
through on, but also seeking out the other landowners, not just
Mr. Luber. Because I think it's important that we don't allow
them to just help a few here and there but they actually help
every single person harmed by their lack of accountability and
following through on what they committed to these folks.
I yield.
Mr. Raskin. I appreciate that, Ms. Tlaib.
The gentlelady yields back.
There are just a handful of us here, and I have a few more
questions which I'd like to ask. I'd like to give the ranking
member and Ms. Tlaib and Ms. Kelly the chance to ask a couple
more questions if you want.
Look, Mr. Smith, I appreciate your being here today. You
represent a large company that has trampled the rights of a lot
of people. You seem like a delightfully nice guy. It is not a
personal thing. We need to get the law correct and the
administrative process correct so we don't have to call a
congressional hearing to get relatively simple things done,
like people's land restored, right? Because, as Ms. Tlaib is
suggesting, we're not going to be able to go and conduct a
hearing on each of these. That's what the FERC process is for,
right?
And I think everybody agrees that FERC should not just be
an instrument of the big companies. As my friend Mr. Sessions
says, you work for a big company. Big companies can do wrong
things too. So, we don't want the government that's just in the
pocket of the big companies. We want government that is going
to protect everybody's rights in a situation like this.
So, Mr. Gedge, let me come back to you. If we're going to
legislate structurally, systemically, in order to prevent
people in Mr. Luber's situation from getting their rights
abused in the future, what are the things that we could get
Congress together to do now related to eminent domain and
related specifically to the restoration and the repair of
people's land?
Mr. Gedge. Sure. So, thank you, Chairman. A few things.
First, I would improve the notice so that people who end up
facing eminent domain know that they're going to face eminent
domain and they have a chance to object to it.
Second, I would align the people----
Mr. Raskin. Can you explain that for a second? Are you
saying that people are not receiving sufficient and adequate
notice?
Mr. Gedge. So, historically, there has been concerns that
the notices that are issued during the FERC certificate process
don't provide sufficient notice to the people who ultimately
are on the receiving end of a condemnation action.
Mr. Raskin. OK.
Mr. Gedge. And beyond that, Mr. Chairman, I would just add
that aligning the payment and possession dynamics with the
Federal Government, I think, would go a long way toward
eliminating that loophole that we were discussing where the
companies take possession long before they actually make
payment.
And beyond that, on the question of restoration, one
possible way to address that would be to create a trespass
cause of action for folks where the company exceeds the scope
of the easement and doesn't restore the property consistent
with their obligations either under court order or under the
terms of the easement.
Mr. Raskin. OK. I appreciate that.
And I haven't gone back to look at the cases. I want to
look into the whole Fifth Amendment question. To me, it's just
unbelievable that it's consistent with the Fifth Amendment of
our Constitution that the government can essentially delegate
the eminent domain power to a private company to take my land
and all of that can happen before I get any money.
And so I haven't received my money, and then, after ripping
up my land, that that is something that can be continually
postponed. I mean, that is a dystopian nightmare of just Big
Brother and the merger of Big Business and Big Government to
violate the rights of the people. That just can't be right.
We've got to put government back on the side of the people.
So, with that, I pledge to work with Mr. Sessions, with
every member of this committee. Let's come up with some
legislation that will have bipartisan support that will
guarantee this won't happen again.
Mr. Sessions, I turn it to you for any closing thoughts or
closing questions you may have.
Mr. Sessions. Mr. Chairman, thank you very much.
Mr. Chairman, let me say that I think the balance of this
hearing has been well-intended, and that was to hear, sure,
specifically where things did not necessarily occur where they
should have.
I think that what I would want to do is, Mr. Chairman, for
us all, as a subcommittee, to look into and maybe get back with
each of these participants on a balanced way to make sure that
the Federal courts also understand the Federal--or the intent
of the law. And, seemingly, I find myself at the back side of
not knowing what these court cases that have shaped the way
that companies then react, not only to FERC but react in the
marketplace.
And so I would say to each of the people who've been here
today, including Mr. Squires, including Sam, I want to thank
you.
But, Mr. Smith, always--and you know this, and the chairman
respectfully acknowledged what I think is truthful--big
companies, like AT&T, which is my former company, or your $38
billion company, Cheniere, do have responsibilities. They do
have the need to make sure that they are following the law,
that they are doing their things in the best interest of a
balanced purpose, because they are dealing with our land, with
our landowners, with the Constitution.
And so I would say to you, Mr. Smith, Mr. Squires, and Mr.
Gedge, I would like to spend time to balance this out. I would
like for Ms. Tlaib to feel like that we respectfully did not
only hear her concerns but also others who have spoken up.
But the balance that we will get, Mr. Chairman, will be
good public policy, to make sure we don't look back in a year
or two and say, wow, we didn't fix what we heard.
So, I want to thank all the witnesses. I have no reason to
believe that there was bad faith on anybody's part, but I do
know that things like this do happen. And so we need to look
further into Article III powers, of how they have looked at
this, and make sure we include that as part of our discussion,
answer, and result.
So, Mr. Chairman, you have lived up to the agreement that
we had to effectively look at issues. We have included
landowners, we've included outside groups, and we've included
the people who were at the heart of the matter. I appreciate
and respect the subcommittee's balanced approach. And our
moving forward will be that exactly as you have stated, and I
look forward to working with you.
And I want to thank our witnesses and the members of the
committee for us thoughtfully working with each other.
Thank you, sir.
Mr. Raskin. Thank you so much, Mr. Sessions, for your
thoughtful remarks.
I don't know if Ms. Kelly is still here. If she's not, I
would invite Ms. Tlaib to ask any final questions she may have.
Ms. Tlaib. No, just--you know, I just want to commend Mr.
Luber, because I know this process is extremely intimidating.
You know, the whole committee process, just being here,
sharing, being vulnerable, I know how much it takes. Because
even though you have not done anything wrong--the wrongdoing
was not on you, but a process that was set up in a way that
wasn't balanced, that didn't protect you.
And so I want you to know that, you know, I commend your
courage to doing that. And I know there's so many that just,
you know, even coming here, they think, ``It's a waste of time.
They're never going to hear me.'' I just want up to know I
heard you.
And many of us are, again, inspired and motivated to
address this. And if it was the wrongdoing on the part of Mr.
Smith's company that motivates us to say it's broken and we
need to fix it, it is going to be hearing stories like yours.
Not only on notice, but the language being used and what
was sent to your homes, you know, I know that doesn't make
sense sometimes. And I know. I've heard. And that happens to my
residents as well. They don't understand particulate matter.
They want to know, how is their public health being impacted by
air permits?
So, I have been there and, you know, represented so many
organizations that have been fighting, you know, again, to fix
these processes that are just--I think Ranking Member Sessions
is right, this balanced approach. Because I know this much, and
you know this, Mr. Luber: You know, when somebody does
wrongdoing, admitting it and addressing it aggressively, that
lands us with so much respect. But when there is wrongdoing and
there's pretending, like, you know, that it didn't happen, some
sort of, like, deception that, ``Oh, oops''--this wasn't an
oops. This was intentionally taking a step toward making sure
that you're not whole.
And so I just--I really commend you, and I want you to know
how much I appreciated your testimony today.
Mr. Luber. Thank you so much.
Mr. Raskin. Thank you so much, Ms. Tlaib.
And I wanted to ask one final question of you, Mr. Smith.
You've mentioned a couple of times that Cheniere has several
people on the ground actually fixing property, which is good to
hear. And I just wanted to give you the chance to elaborate
that. Can you tell us how many people you've got on the ground
right now fixing the relevant properties?
Mr. Smith. Well, thank you, Mr. Chairman.
So, we've got a full negotiation team out on the ground,
you know, anywhere between five, six people, that are directly
engaging with landowners. So, right now, as we speak, they are
on the ground at this moment doing that work.
We also have crews, because, you know, as I was able to
discuss a little bit, with the 56 tracts we've started with,
we've made significant progress in this short period of time,
with the full intention of meeting the deadline that was
established by FERC.
So, we have----
Mr. Raskin. All right.
Mr. Smith [continuing]. A team on the ground of people and
negotiators as we speak right now.
Mr. Raskin. Five or six. Thank you for that.
We are going to both aggressively pursue everything we know
about this situation at the micro level while we explore policy
fixes at the macro level to see if we can improve this whole
legal regime out there which hasn't been looked at in a long
time.
Mr. Sessions, I thank you.
Members, I thank you.
Mr. Luber, Mr. Smith, Mr. Squires, Mr. Gedge, thanks to all
of you for participating today.
And let's see, I just have a--I think before--the witnesses
will have and the members will have time over the next several
days--I don't know exactly how many.
How many days do they have to----
Staff. Five.
Mr. Raskin. Members have five days to include any
additional material or to amend their statements in any way.
Mr. Raskin. And, with that, the hearing is closed.
Thank you so much.
[Whereupon, at 11:37 a.m., the subcommittee was adjourned.]
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