We then had a meeting with the president of the Carnegie Natural Gas Co., D. S. Keenan, who gave us full cooperation in supplying data on the storage of the byproduct gas in the wells referred to, including amount of gas pumped into the wells, pressures used, the amount of gas drawn from the wells, and dates of same; he also gave permission to take samples of the byproduct gas being pumped into the wells and the exact wells wherein the gas was being pumped in, and the wells from which the gas was being drawn, samples of which are hereto attached. All 17 of the abandoned wells controlled by the Carnegie Natural Gas Co. are properly plugged; the plugging records of these wells are available at the company's office, and were reviewed by the commission. You will find attached to this report a number of enclosures containing pertinent data concerning the abandoned gas wells in the area, with which we are concerned, such as casing, plugging, active and inactive wells, storage and withdrawal of gas, pressures used, and a log of the various strata in this field. The commission inspected the portion of the mine affected on March 17, and found methane issuing from "slips" in the roof in 2 intake entries in the vicinity of the area of the recent minę explosion; methane had been found issuing from the roof in the other 2 intake entries. Since the larger portion of the air ventilating the mine enters by way of an intake air shaft in the interior of the mine, it was not necessary to use all of the above-mentioned entries as intakes, and Inspector Powers had recommended that all of these entries, except one which is the haulage road, be made return airways, so that generations of methane in these entries would go directly to the return shaft; and the commission concurred in Mr. Powers' recommendation, which has been carried out. The suction effect of the exhaust fan on these changed areas tends toward eliminating any possibility of methane generating in the haulage road, or intake airway, and since this change, methane has not been found on the haulage road. Irrespective of the original source of the generation of methane in these entries, we are of the opinion that the changes made in the ventilation have eliminated any dangers, unless something of an unusual nature takes place. We want to express our thanks to Mr. Keenan, of the Carnegie Natural Gas Co., for his willingness to cooperate in this matter, and to Messrs. Forbes and Grove, of the Bureau of Mines, for their cooperation and assistance; and to the Bureau of Mines Gas Laboratory for the analyses of samples collected in connection with the investigation. Mr. ROBERT D. L'HEUREUX, P. J. CALLAGHAN, Inspector, 26th Bituminous District. G. S. McCAA, Inspector, 29th Bituminous District. Inspector, 22d Bituminous District. CHICAGO, May 20, 1954. Counsel, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. DEAR MR. L'HEUREUX: Following our telephone conversation today, I called Mr. Wolfe, vice president of the Equitable Gas Co. in Pittsburgh, Pa., and understand that he and Mr. Jacob will endeavor to forward to you, by the first of next week, the memoranda relating to the subject matter of our discussions on April 19. In the interim, and in response to your letter of April 27, 1954, I offer to you for consideration my comments which are submitted in behalf of Natural Gas Storage Co., of Illinois, Natural Gas Pipeline Company of America, and Texas Illinois Natural Gas Pipeline Co., all natural-gas companies within the meaning of the Natural Gas Act, concerning a proposed amendment to the Dirksen bill, S. 525, which has been submitted to you by a group of persons representing certain coal and labor interests and the Bureau of Mines. Imprihis, there are two serious and fundamental objections to the amendment as so proposed by the coal interests: I The amendment, as so proposed, would deprive the Federal Power Commission of its exclusive authority over the underground storage of natural gas, where the same is in interstate commerce, and in fact vest final authority over such in the Director of Bureau of Mines. The provision requiring a from the Bureau of Mines as a condition precedent to the granting of by the Federal Power Commission creates a conflict of administrative 2.1ch will completely defeat the purpose of the legislation so far try is concerned. 3. the apparent finality of any decision by the Director of the Bureau der subsection 5 thereof raises a very serious question as to whether ⚫ail be deprived of its statutory right of review, under the proLe Administrative Procedure Act (5 U. S. C. A. 1009). п erit, as so proposed, is unnecessary to protect the coal-mining reason of the fact that adequate provision is made under existing T latory procedures to achieve the objective there sought. . 2 of the amendment requires applicants seeking establishment de project by condemnation to first secure a certificate of public and necessity from the Federal Power Commission. The subject Poses tioni 2 is already fully covered by the provisions of the Natural as amended (title 15, U. S. C. A., sec. 717) and specifically by Section 157 of the Rules and Regulations of the Federal Power 11% CFR. 157) require full details of the project including a •f the specific property involved in the application. There is neither practical necessity, by legislative enactment, to duplicate these purely strative provisions to cover storage projects specifically, and require that ...al tract of land within the storage area be specifically described by Power Commission in the certificate of public convenience and neces4.1 g the storage project. 2 -age of subsection 2 requiring that certificates authorize the establishsti raze pool “in the specific land, interest in land or other property * whöject matter of the proceeding" is an invitation to litigious-minded Un locations far removed from coal-mining areas of the United resist condemnation (and to demand an exorbitant price which will he horne by the consuming public) on the ground that the storage • certificate of public convenience and necessity does not specifically *** utlization of his speciție land. On the basis of years' experience courts, wherein a galaxy of defenses to condemnations brought by the @es de presented by the writer have been urged, such is no idle speculation ces real, and serious, possibility. the reasons given, I sincerely urge that such proposed subsection be rein the alternative, that the words: in the specific land, interest in land, or other property which is the subject ɗ the proceedings,” ated therefrom. sextant 3 of the amendment requires a petitioner seeking a certificate raze project to file a petition with the Federal Power Commission and -* w,”ın 3 days to file with the Director of the United States Bureau an application for a certificate. In addition, such petitioner is re*u mike publication in the area in which the property is sought to be ta-1, of notice of petitioner's intention to seek condemnation, describing ***y to be condemned with particularity. • of this amendment is obvious: certificate provision is already fully covered by the Natural Gas ~ 7, and the rules and regulations thereunder, relating to notice and and importantly, the requirement for filing application with the Die United States Bureau of Mines creates an unworkable overlapping strative jurisdiction. The interests of mineral owners within gas arons can be fully protected by the Commission under its specific powers * se evind tions upon the granting of a certificate' and, in any event, by jer in these cases where agreement cannot be reached and condemnation It sets wholly illogical to place the mining industry in a special The Commission shall have the power to attach to the lasnance of the got to the exercise of the rights granted therein der such reasonable terms and the public convenience and necessity may require "* and privileged category without regard to the best interests of the public generally. A further vice of subsection 3 is that, by its very terms, it requires a petitioner seeking a certificate to assume all interests must be condemned. As a practical matter it is absolutely impossible to ascertain, within 30 days following the filing of a certificate of public convenience and necessity, whether all necessary interests in land can be acquired by voluntary agreement or whether some (usually rather small in both number and area) must be acquired by condemnation. Under proposed subsection 3, however, all land within the proposed storage area must be precisely described and notice published of petitioner's "intention to seek the condemnation” of the same on penalty of forfeiting the right to condemn a particular tract after a certificate has been obtained, after extensive negotiations have been had with the landowners to obtain the same voluntarily and after an impasse has been reached as to the particular tract. Such a provision is not only demonstrably an absurdity, it is inimical to the public interest and could prevent the storage of gas in an area, by reason of the highly technical matter of a failure to have "precisely" described the land sought to be condemned, even though the public interest urgently required such operation; indeed, after surveys, which are attendant upon construction, we have often found the record description of various lands in serious error and have taken new instruments correctly and “precisely" describing the same. In this connection, we direct your attention to the fact that in securing some of the underground storage rights of Natural Gas Storage Co. of Illinois it was necessary to make use of the Illinois eminent domain statutes, not because of an adverse position of a landowner, but to cure defects in title such as unknown owners, etc., which normally cannot be ascertained until title certificates have been perused by lawyers long after certificates have been granted. It is sincerely urged that this subsection 3 be rejected in its entirety. 3. Subsection 4 of the amendment requires that the application for certificate from the Director of the Bureau of Mines set forth in detail the precise location of the proposed storage project and makes it the duty of the Director to investigate whether the proposed storage project will underlie or overlie any known commercially recoverable coal or other mineral deposit other than oil or gas or will endanger the life or health of any person engaged in mining or interfere with recovery of any commercially recoverable mineral interest. The Director is required to certify to the Federal Power Commission the results of his investigation. The foregoing amendment is unnecessary to protect the interests of the coal industry and those engaged in mining. Section 7 (d) of the Natural Gas Act requires that notice of application for certificates shall be served upon such interested parties as the Federal Power Commission shall require by regulation. Section 157.10 of the Commission's Rules and Regulations (18 C. F. R. 157.10) requires that upon the filing of the application for certificate under section 7 of the Natural Gas Act, notice of such filing will be given by the Commission to any governmental agencies interested or whose participation may be in the public interest by publishing notice in the Federal Register and by mailing copies to such agencies, and any governmental agencies desiring to receive such notice of applications may be placed upon a list maintained by the Commission and shall be mailed copies of all such notices of applications. Thus, while it has been suggested by members of the natural-gas industry that specific provision might be made under S. 525 for the Federal Power Commission to serve the Director of Mines with a copy of all underground storage applications, even such a provision is wholly unnecessary if the Director of Mines will avail himself of the privileges already available to him by simply notifying the Federal Power Commission of his desire to receive copies of all of same. Indeed, the testimony of Chairman Kuykendall of the Federal Power Commission, which was offered at the hearings on S. 525, make it apparent that not only will such notice be given, but that every cooperation has and will be given to the Bureau of Mines if it avails itself of already existing statutes and regulations. It is sincerely urged that this subsection be rejected. 4. Subsection 5 of the amendment provides that upon receipt of the certificate of the results of the investigation by the Director of the Bureau of Mines, the Federal Power Commission shall proceed to consider the petition for certificate of public convenience and necessity but that the Commission "shall not have power to issue a certificate and necessity unless the Director of the Bureau of Mines shall certify to the Commission that:" (a) No part of the gas-storage project underlies or overlies any known commercially recoverable coal or other mineral interests other than oil or gas, and (b) The storage project will not endanger the health or life of persons engaged in mining, and (c) The gas-storage project will not interfere with the recovery of any known commercially recoverable mineral interest. I specifically direct your attention to the language of this subsection which withdraws from the powers previously vested in the Federal Power Commission under section 7 (c) of the Natural Gas Act, the power of the Commission to issue an underground storage certificate without an antecedent certificate from the Director of the Bureau of Mines. In short, the Federal Power Commission may only consider the public interest after the private rights of the coal and mining interests have been insured. The effect of the foregoing subsection 5 is to grant to one man, the Director of the Bureau of Mines, the power of veto over the granting of certificates of public convenience and necessity by the Federal Power Commission. As I have previously pointed out, such language is susceptible of the construction that a petitioner's normal right of review under the Administrative Procedure Act is precluded. This construction is strengthened by the fact that proposed subsection 6 of the same amendment provides for judicial review of final orders of the Federal Power Commission, but makes no mention of the certificate of the Director of the Bureau of Mines which is a condition precedent to the vesting of the power in the Federal Power Commission to issue a certificate. The granting of such an absolute power to the individual head of a governmental agency over the actions of a Commission composed of five members, with a large and experienced staff, is clearly improper and nullifies the intent of Congress as expressed in the Natural Gas Act to confer jurisdiction upon the Federal Power Commission over matters relating to the natural-gas industry. The interdiction that the Director of the Bureau of Mines alone shall determine whether commercially recoverable mineral deposits underlie the proposed storage stratum or whether the same shall be interfered with by storage operations, which, if found in the affirmative, automatically deny the granting of a certificate by the Federal Power Commission, is a concept of administrative law which the writer has never before encountered. The mere statement of such a proposition is a sufficient demonstration of its fallacies. As noted above, the Director of the Bureau of Mines can receive copies of all applications for gas-storage projects filed with the Federal Power Commission and can intervene in all such proceedings and introduce the results of his investigation at the hearing of the application before the Commission. In the numerous proceedings before the Federal Power Commission, to which our companies have been parties, all public bodies, whether city, county, State, or Federal, have been given full opportunity to participate and a full measure of eredence given their testimony and suggestions. It is sincerely urged that this subsection be rejected. 5. Subsection 6 of the amendment provides that any final order of the Federal Power Commission entered in a proceeding authorized by the Natural Gas Act shall be subject to review by the United States Circuit Court of Appeals in the same manner as any other final order of the Commission. As pointed out above, this subsection apparently has no application to the certificate authority of the Director of the Bureau of Mines without which the Federal Power Commission cannot act; i. e.: it "shall not have the power to issue a certificate of public convenience and necessity" without such Bureau of Mines certificate. Limited, therefore, to situations where the Federal Power Commission has the power to act, the same is vacuous and is utterly unnecessary inasmuch as section 19 of the Natural Gas Act already provides that parties aggrieved by orders of the Federal Power Commission in proceedings under the act may apply for rehearing by the Commission and for review of Commission orders in the United States Circuit Court of Appeals. 6. Subsection 7 of the amendment provides that nothing in the act shall be construed to prevent or restrict the application of State law or regulation pertaining to health and safety to underground gas-storage projects except insofar as such State law or regulation may be in conflict with a specific provision of the act. This provision merely restates the existing law applicable to the police power of the States in connection with Federal activities and inasmuch as it merely states a rule of construction, it is superfluous and should be eliminated. I think it imperative, however, that you give very serious consideration to the effect a bill such as that under discussion may have on the statutes which several of the States have enacted with reference to the exercise of the right of eminent domain in connection with the underground storage of natural gas. While normally a condemnor would have the right to elect to use either the State or Federal statute, assuming it could qualify under both, the interdictions contained in subsection 5 of the proposed amendment under discussion might well be urged as establishing a policy of Congress that commercially recoverable (both present and future) mineral deposits be not interfered with, and could have the effect of withdrawing the State right to that extent from a storage company operating under a certificate of public convenience and necessity from the Federal Power Commission, even though such company might have elected to proceed exclusively under such State right. While I have found no case precisely in point, the genesis of such an argument could be found in those cases dealing with preemption of a field by Federal legislation. 7. Subsection 8 of the amendment, in addition to establishing the jurisdictional amount ($3,000) of the Federal district courts, provides that the practice and procedure in any condemnation proceeding under the same in the United States district courts shall conform to the practice and procedure of the State courts. While I recognize that this language is substantially identical with that presently contained in section 7 (h) of the Natural Gas Act, I call your attention to the new Federal Rule of Civil Procedure 71A, effective August 1, 1951, which now provides a uniform condemnation procedure in the Federal courts and renders conformity statutes obsolete. For the above reasons, I sincerely urge that the amendment proposed by the coal interests be rejected. Very truly yours, CHARLES C. MCDUGALD. PENNSYLVANIA NATURAL GAS MEN'S ASSOCIATION, In re S. 525, 83d Congress, a bill to enlarge section 7 (b) of the Natural Gas Act to permit condemnation for gas storage. Mr. ROBERT D. L'HEUREUX, Counsel, Subcommittee on Business and Consumer Interests, United States Senate, Washington, D. C. DEAR MR. L'HEUREUX: On April 2, 1954, at your hearing on the above-cited pending legislation, this association, representing natural gas producers and distributors in western Pennsylvania, filed with your committee a statement expressing its opposition, and the reasons therefor, to the amendment proposed by the Department of the Interior to limit availability of eminent domain for development of underground gas storage solely to areas not underlain with commercial coal deposits. It has come to the attention of the association that, subsequent to that hearing and in response to a suggestion made at that time by the chairman, spokesmen for the bituminous coal industry and mine workers' union, and from the United States Bureau of Mines, met with members of the committee staff on April 9, 1954, and that from this meeting there has emerged a so-called "compromise" amendment. This amendment, in substance, would require a natural gas company seeking to invoke eminent domain for underground storage to obtain a permit from the Federal Power Commission, but goes much further by restricting FPC's authority to issue such permits to instances where the Bureau of Mines certifies that "(a) No part of the natural gas storage pool as to which the condemnation is proposed underlies or overlies any known commercially recoverable coal or other mineral deposits other than oil or gas; and "(b) The said natural gas storage pool will not endanger in any manner the health or life of any person engaged in mining; and “(c) The said natural gas storage pool will not interfere with or impede in any manner the present or future recovery of any known commercially recoverable mineral interest." (Italics added.) 2 Oakland Club v. South Carolina Public Service Auth. ((CA 4th) 110 F. (2d) 84). |