Analysis: Bill would let for-profit pipeline companies take citizens’ property

A House committee this week deliberated a bill that would allow for-profit pipeline companies to take citizens’ property using eminent domain. Two similar bills were filed in 2020.  

How your property gets taken 

H.3527 creates a process by which privately owned petroleum pipeline companies can use eminent domain to acquire land for pipeline projects.  

Under the bill, before a company could construct a new petroleum (oil) pipeline, or expand an existing one, it would need approval from the Public Service Commission (PSC). Recall that the PSC, whose members are elected by lawmakers, is the same body that approved nine electric rate hikes to pay for the now abandoned V.C. Summer nuclear project.

Curiously, the bill would allow the PSC to base its decision, in whole or in part, on the recommendations of other state agencies. Not only would this shield the PSC from accountability, it would also allow certain agencies to hijack the decision-making process in the name of “economic benefit”, such as the Department of Commerce or Department of Parks, Recreation and Tourism.  

Once approved, the company would be entitled to “reasonable access” to citizens’ property to begin surveying the land, well before construction begins.  

If a person refuses to sell their property, the private company would be entitled to take it using eminent domain after getting permission from the Administrative Law Court. Ultimately, the court must decide whether there is a “public need” for the proposed pipeline, considering factors such as: 

• Whether existing pipelines are adequate; 
• The demand for petroleum; 
• Whether the primary beneficiary is the public or the company; and 
• Information received at public hearings 

If approved (and once all subsequent appeals and notice requirements have been satisfied) the pipeline company could legally begin the process of forcing residents from their property.    

A dangerous precedent 

Eminent domain is a power reserved for government, limited to projects for “public use” (Article 1, Section 13 of the S.C. Constitution). Under no circumstance should a private company have the power to take citizens’ property. The only exception to this rule, at least in South Carolina, is for utility companies. 

The state Legislature already weighed in on this issue, correctly asserting in a 2016 law (now expired) that private petroleum companies are not utilities for the purposes of eminent domain and were never intended to have the power. The provisions of that law should be made permanent to avoid confusion moving forward.  

This isn’t the first attack on citizens’ property rights. We wrote about a set of near-identical proposals in 2020, suggesting there will be a sustained push to expand eminent domain power until better protections are codified.  

Why do these bills keep showing up? For years, there has been an effort to construct a new interstate pipeline in the Southeast, spanning from Belton, South Carolina down to Jacksonville, Florida. Considering the amount of land needed for such a project, the scale of property taken in the process could be extraordinary.

In 2014, the Plantation pipeline (which runs through part of the Upstate) spilled an estimated 369,000 gallons of gasoline on a Belton resident’s property, going undetected for an unknown time and threatening the area’s clean water supply. At least 150,000 gallons had not been recovered as of the beginning of 2020.  

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On Wednesday, H.3527 was sent back to subcommittee by the full House Agriculture Committee. This does not mean the bill has been defeated; the subcommittee could pass it again with adjusted language at any point. A companion bill (S.240) was prefiled last year in the Senate.  

We will be monitoring both bills throughout the legislative session, providing updates as they move or undergo any major amendments.