TO AMEND THE NATURAL GAS ACT (Extends Right of Eminent Domain For Aquisition of Storage Areas) WEDNESDAY, MARCH 3, 1954 UNITED STATES SENATE, BUSINESS AND CONSUMER INTERESTS OF THE Washington, D. O. The subcommittee met at 10 a. m., pursuant to call, in room G-16 in the Capitol, Senator William A. Purtell (chairman of the subcommittee) presiding. Present: Senators Purtell (chairman of the subcommittee) Schoeppel, Hunt, and Dirksen. Also present: Bertram O. Wissman, chief clerk; Robert D. L'Heureux, counsel. Senator PURTELL. The hearing will come to order. The hearings this morning are on S. 525. At this point we will put in the bill and also the changes in the Natural Gas Act proposed by S. 525: [S. 525, 83d Cong., 1st sess.] IN THE SENATE OF THE UNITED STATES January 16, 1953 Mr. DIRKSEN (for himself and Mr. DOUGLAS) introduced the following bill; which was read twice and referred to the Committee on Interstate and Foreign Commerce A BILL To amend section 7 (h) of the National Gas Act Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the first sentence of subsection (h) of section 7 of the Natural Gas Act, as amended (15 U. S. C. 717f (h)), is amended by striking out "and the necessary land or other property" and inserting in lieu thereof "and the necessary land or interest in land, or other property", and by striking out "for the location of compressor stations" and inserting in lieu thereof "for the storage of gas or for the location of compressor stations". (Changes in the Natural Gas Act proposed by the bill S. 525, existing law is shown in roman type, language proposed to be eliminated is enclosed in black brackets, proposed new language in italic:) NATURAL GAS ACT EXTENSION OF FACILITIES; ABANDONMENT OF SERVICE SEC. 7 (a) *** (h) When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way to construct, operate, and maintain a pipeline or pipelines for the transportation of natural gas [and the necessary land or other property] and the necessary land or interest in land, or other property, in addition to right-of-way [for the location of compressor stations], for the storage of gas or for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of such pipeline or pipelines, it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated: Provided, That the United States district courts shall only have jurisdiction of cases when the amount claimed by the owner of the property to be condemned exceeds $3,000. Senator PURTELL. I have an opening statement to make, but I know that our good friend from Illinois, Senator Dirksen, has many other meetings to go to, and we would like very much if he would present his statement at this point. STATEMENT OF HON. EVERETT M. DIRKSEN, A UNITED STATES SENATOR FROM THE STATE OF ILLINOIS Senator DIRKSEN. Mr. Chairman, I am grateful for the opportunity to make a brief statement before I go to the Civil Functions Subcommittee of the Appropriations Committee. My statement is very brief and very simple, indeed. In cooperation with Senator Douglas, in the 82d Congress we offered S. 1000 which is the identical bill that is before us today, and the bill which you now have which is S. 525, which was introduced in January 1953. The purpose of the bill, of course, is to make it possible for those who are engaged now in the purveyance of natural gas in interstate commerce to avail themselves of the prospects or possibility of underground storage. The act now does not seem to be quite clear on that point, and I presume it does require some clarification. One question has arisen as to whether this should be done at the Federal or the State level. I am confident from the testimony you will receive from people who know infinitely more about this matter than I do, that they will clarify these particular points. There is a growing requirement for and a growing use of underground storage at the present time and I believe virtually everybody in the industry will be more or less agreed on that point. Now, the bill has received the attention of various agencies of Government, some that have an interest in it and some that do not. It has gone to the Department of Justice and that Deparment makes no recommendation on the bill; and properly so, since it is a matter for Congress to determine. The bill has gone to the Federal Power Commission and they have written an opinion and made some suggestions with respect to possible amendments to the bill. It has gone to the Department of the Interior and, through the Bureau of Mines, they have made a suggestion about an amendment in the interest of security, so far as mining is concerned. Then, in addition thereto an amendment has been offered on which I thought there was general agreement in the industry some time last year and that amendment will be offered, I believe, by Mr. Holmes, who is here this morning. My suggestion, Mr. Chairman, is that since probably you are going to have a good deal of testimony on this bill that any amendments that they may have in mind be offered, and then of course they can be considered at some subsequent date. I have only purpose, after all, and that is to make it possible for those who are purveying gas to avail themselves of the potential underground storage, because I do think it is necessary in the industry today. So I am quite agreeable to anything that is in the interest of safety that will harmonize any differences that may have developed between those who have an interest in this bill and to do what I think is quite the right thing to do. So I can subscribe to the amendment that Mr. Holmes will offer, and I suppose it is substantially in line with the suggestion made by the Federal Power Commission, except for one item and I would like to be corrected, if I am in error, but I believe the Federal Power Commission suggests that possibly the scope of the bill be limited somewhat by making sure that this does not apply to surface storage, that it will apply only to underground storage. The Federal Power Commission memorandum will be available to you from the file, I am sure, Mr. Chairman. I hope that all aspects of the matter will be thoroughly ventilated by the testimony you will probably receive this morning. It is entirely possible you may not complete testimony today, and, if not, I shall be delighted to be back here after the hearing which I must attend downstairs, and I could be available tomorrow if you run over into tomorrow. Senator PURTELL. I would like to inform the Senator, because I know of his interest in this matter that it appears now as though we will be unable to finish our hearing today, although we will try to extend them into the afternoon. We have some other hearings on health. I believe we will not be able to get to these hearings again until very late in the month, about the 28th or 29th, or early April. These hearings will be confined to this day only, and we wish all people who desire to be heard to be given the opportunity to be heard, and we probably will not be able to hear them all until the 1st of April or the latter part of this month. Senator DIRKSEN. My only point is to modestly assist you in launching this hearing. The matter has been in a state of suspension for a long period of time, partly because of my own neglect, and that is due to the fact that I have been busy on other committees. I will leave it in your good hands at the moment, and I will be back to share in the testimony later. Senator PURTELL. I would like to make my opening statement now. This measure, introduced by Senator Dirksen for himself and Senator Douglas, is identical with S. 1000, which was introduced by these same Senators in the 82d Congress. The Senate Interstate and Foreign Commerce Committee did not have time to complete its study of this legislation at that time. The prime purpose of the bill is to facilitate the storage of natural gas in underground formations in order to make gas available at reasonable cost to persons living in regions distant from producing gas fields. The Department of Defense favors the bill. The Federal Power Commission and the Department of the Interior also urge passage of this measure with clarifying amendments which will be detailed at these hearings. I would like to insert copies of their reports to the committee, along with reports from Agriculture, Justice, and the General Services Administration at this point: Hon. JOHN W. BRICKER, FEBRUARY 3, 1954. Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. DEAR SENATOR: This is in response to your request for the views of the Department of Justice concerning the bill (S. 525) to amend section 7 (h) of the Natural Gas Act. The bill would amend the first sentence of subsection (h) of section 7 of the Natural Gas Act, as amended (15 U. S. C. 717f (h)), so as to extend the right of a holder of a certificate of public convenience and necessity under that act to acquire, by the exercise of the right of eminent domain, the necessary land or other property for the location of compressor stations, pressure apparatus, or other stations or equipment necessary to the proper operation of natural gas pipeline or lines, to include the acquisition of an "interest in land" and to include "the storage of gas" within the purposes for which such acquisitions may be made. Whether the bill should be enacted presents a question of legislative policy concerning which the Department of Justice prefers to make no recommendation. The Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely, WILLIAM P. ROGERS, Deputy Attorney General. DEPARTMENT OF AGRICULTURE, Hon. CHARLES W. TOBEY, Chairman, Committee on Interstate and Foreign Commerce, March 5, 1953. DEAR SENATOR TOBEY: This is in response to your request for a report on S. 525, a bill to amend section 7 (h) of the Natural Gas Act. Section 7 (h) of the Natural Gas Act (15 U. S. C. 717f (h)) authorizes any holder of certificates of public convenience and necessity to exercise the right of eminent domain to acquire rights-of-way for pipeline purposes and land or other property for the location of compressor stations, apparatus, or other equipment necessary to pipeline operation. The proposed legislation would extend that authority to include "interest in land" as well as land or other property for "the storage of gas" as well as for the location of compressor stations, apparatus, and other equipment. Since the provisions of section 7 (h) of the act are not applicable to this Department, the amendments would not affect its functions. We, therefore, have no recommendation to make regarding the bill. Sincerely yours, T. D. MORSE, Acting Secretary. DEPARTMENT OF THE INTERIOR, OFFICE OF THE SECRETARY, Washington, D. C., February 11, 1954. CHAIRMAN, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, United States Senate, Washington 25, D. C. MY DEAR MR. CHAIRMAN: You have requested the views of this Department on S. 525 (83d Cong.), a bill entitled "To amend section 7 (h) of the Natural Gas Act." This bill is designed to facilitate the storage of natural gas in underground formations in order to make gas available at reasonable cost to persons living in regions distant from producing gas fields. It would do so by enabling gas companies to exercise the right of eminent domain to secure lands or interests therein for storage purposes in cases where owners of small or fractional interests obstruct the acquisition of storage rights in underground formations. The Department of the Interior favors the enactment of this bill if it is amended as hereinafter suggested. The storage of natural gas in underground formations adjacent to points of consumption has become increasingly important during recent years as a means of safeguarding the supply of natural gas to consumers during periods of peak demand. It is particularly important as a measure of security in the defense program. Extending the right of eminent domain for purposes of underground gas storage may, however, increase existing hazards to the health and safety of persons engaged in underground mining operations in the vicinity of the gas storage reservoir. This is particularly true in the Appalachian region where gas is stored in depleted gas field underlying and near active coal mines. It is therefore necessary to balance the benefits which this bill would produce in the economic storage of gas, and the hazards which may result to those working in active mines. We therefore recommend that the Congress, in extending the right of eminent domain for the purpose of underground gas storage, should restrict that right to areas where such storage would not increase the hazard to the safety or health of mineworkers. The right of eminent domain for gas storage should therefore not be extending to facilitate the storage of gas in the vicinity of active underground mining areas. To accomplish this recommendation, it is suggested that the bill be amended by deleting the word "and" in line 7, by substituting a comma for the period in line 10, and by adding the following language to this bill: "And by substituting a colon for the period at the end of the sentence and inserting the following proviso: 'Provided, That the right of eminent domain shall not be exercised to acquire land or interests in land for the storage of gas unless the court determines that such storage is not likely to result in hazard to men working in any active underground mine.'" We assume that the enactment of this legislation would not give a public utility, which exercises the power of eminent domain under this bill, any immunity from applicable State laws and regulations concerning the safety, health, and protection of property of the citizens of that State, particularly miners and operators of coal mines. We also assume that a public utility acquiring land through the exercise of eminent domain as provided for in the proposed legislation would still be subject to all applicable State laws and regulations respecting the use of that property. It is suggested that the legislative history of this bill make this clear and that if there be any doubt the bill be amended to so provide. The Bureau of the Budget has advised that there is no objection to the submission of this report to your committee. Sincerely yours, F. E. WORMSER, Assistant Secretary of the Interior. OFFICE OF THE ASSISTANT SECRETARY OF DEFENSE, Hon. JOHN W. BRICKER, Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense for the views of the Department of Defense with respect to S. 525, 83d Congress, a bill to amend section 7 (h) of the Natural Gas Act. The section of the Natural Gas Act proposed to be amended provides generally for the exercise of the power of eminent domain by natural-gas companies with respect to necessary rights-of-way in connection with the construction and operation of natural gas pipelines, and the necessary lands or other property, in addition to rights-of-way, for the location of compressor stations or other stations or equipment necessary to the proper operation of such pipelines. |