tion or storage of matural gas in the performance of service to customer within its service area.

It does not go to the extent of fixing the 80 percent depletion or 75 percent ownership.

Mr. ROBINSON. I do not want to get into rebuttal, but I am of the opinion that the statement the gentleman just read does not solve the problem where the area is now being produced. If a well is still there and produces, then they would tie up a complete storage area. Senator HUNT. What type of a storage facility would you have that had already not been exhausted in natural gas?

Mr. ROBINSON. Natural gas is being stored in sand, that had neither produced oil or gas.

Senator HUNT. I did not know that. Thank you.

Senator PURTELL. Are there any further questions?

Senator SCHOEPPEL. No questions.

Senator PURTELL. Senator Dirksen?

Senator DIRKSEN. No questions.

Senator PURTELL. Is it your desire or the desire of any of the witnesses who have appeared this morning to remark about the amendment any further?

Mr. ECKERT. Mr. Robinson followed me and, again speaking for the independent producers, I was very much pleased to hear the amendments that he offered, and I am sure that the independent producers are very agreeable with Mr. Robinson's proposed amendment.

Senator PURTELL. They knew of it before he proposed it here. You had a chance to study it.

Mr. ECKERT. No. But where he suggested 80 percent exhausted and 75 percent of the total acreage owned, it is a lot.

Senator PURTELL. It is your opinion it would meet with the approval of those with whom you have discussed the matter.

Mr. ECKERT. Yes, sir.

Senator PURTELL. If there are no other witnesses, and I believe we have completed the list of those scheduled this morning we will conclude the hearing at this point. However, we do have a few minutes left. Is there anyone else who wishes to be heard?

If not, I would say, Senator Schoeppel, that without objection the record will remain open for the insertion of pertinent documents and statements by members of the subcommittee or the full committee.

If there are no other witnesses, then, we will adjourn to the call of the chairman of the Subcommittee on Business and Consumer Interests of the Committee on Interstate and Foreign Commerce. I anticipate that we will have a meeting the latter part of this month, probably the very last day or two, or early in April but we will have further hearings.

(Whereupon, at 11:44 a. m., the subcommittee adjourned to the call of the Chair.)

TO AMEND THE NATURAL GAS ACT

(Extends Rights of Eminent Domain for Aquisition of Storage Areas)

FRIDAY, APRIL 2, 1954

UNITED STATES SENATE,

SUBCOMMITTEE No. 6 ON

BUSINESS AND CONSUMER INTERESTS OF THE

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee met at 10:05 a. m., pursuant to notice, in room G-16 in the Capitol, Senator William A. Purtell (chairman of the subcommittee) presiding.

Present: Senators Purtell, Schoeppel, and Monroney.

Also present: Senator Matthew M. Neely; Bertram O. Wissman, chief clerk of the full committee; Robert D. L'Heureux, counsel. Senator PURTELL. Our subcommittee meeting will come to order. This is a continuation of the hearings on S. 525, which is to amend section 7 (h) of the Natural Gas Act.

Our first witness this morning will be Mr. Edward D. Schorr, an attorney of Columbus, Ohio.

Do you have a prepared statement, Mr. Schorr?

Mr. SCHORR. I do not, but I would like to submit one later in the day.

Senator PURTELL. We will be very happy to have you submit one later in the day and it will become a part of the record.

STATEMENT OF EDWARD D. SCHORR, REPRESENTING COAL PRODUCERS COMMITTEE ON UNDERGROUND GAS STORAGE SAFETY

Mr. SCHORR. Mr. Chairman and members of the committee, my name is Edward D. Schorr. I am an attorney at law with offices at 33 North High Street in the city of Columbus, Ohio. I represent the Coal Producers Committee on Underground Gas Storage Safety. This committee has been formed by and is authorized to speak for the Western Pennsylvania Coal Operators Association, the Central Pennsylvania Coal Producers Association, the Somerset Coal Operators Association, the Northern West Virginia Coal Association, and the Ohio Coal Association.

The coal-mine operators for whom I speak are opposed to the enactment of S. 525. Let me make clear at once, however, that the coal operators for whom I speak are not opposed to the storage of gas

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in underground storage reservoirs, nor are they opposed to granting to gas companies the power of eminent domain to enable them to acquire by condemnation proceedings property which they need for the establishment, operation, and maintenance of gas-storage reservoirs underground.

But these coal people are firmly of the opinion that when the sovereign power of eminent domain is granted to gas companies to take, by condemnation proceedings, property which the gas company asserts it needs in order to store gas underground, the grant of the power of eminent domain should not be unlimited and unrestricted power, but it should be clearly defined as a limit or restriction so that the property rights and the personal safety of the persons who are likely to be affected by the establishment and operation and maintenance of underground reservoirs will be properly safeguarded and protected.

The coal operators for whom I speak are equally firmly of the opinion that the power of eminent domain should not be granted for underground gas-storage purposes either by Federal or by State Government unless laws are enacted at the same time regulating, in the interest of safety, the establishment, operation, and maintenance of underground gas-storage reservoirs regardless of whether the property acquired for their establishment is acquired through the exercise of the power of eminent domain or by purchase or otherwise. Such regulation is necessary for the protection of the health and safety of the people and the safety of the property in the area in which the reservoir is located.

We oppose S. 525 because it would grant unlimited power of eminent domain, unlimited, unrestricted, broad powers of eminent domain, grant that power to natural-gas companies as they are defined in the Natural Gas Act and permit those companies exercising that power to exercise the power to appropriate practically anything that they might deem necessary for gas storage purposes.

The Natural Gas Act as it stands today provides that when any holder of a certificate of convenience and necessity cannot acquire by contractual agreement or is unable to agree with the owner as to the price to be paid therefor, such holder of a certificate of public convenience and necessity-and that would of course be a natural gas company as the term is defined in the Natural Gas Act-may acquire the property that it needs for gas storage purposes by exercise of the power of eminent domain.

And the law as it stands today also provides, may acquire, I should have said, the right-of-way for pipelines and then it also provides that the holder of such a certificate of public convenience and necessity unable to agree with the owner as to the price of the property, may acquire in addition this right-of-way for the location of compressor stations, pressure apparatus and other stations and equipment necessary for the proper operation of such pipeline or pipelines, whatever property it needs for that purpose.

Now, S. 525 proposes to add to that language of the Natural Gas Act, language which would provide that in addition to this power to acquire property by eminent domain for pipeline purposes, the language added would provide that the power of a holder of a certificate of convenience and necessity when he cannot acquire what he wants by contract or purchase, unable to agree with the owner, may acquire

by appropriation the necessary land or interest in land. The words "or interest in land" are new, would be added.

In addition to right-of-way-that is, new-for the storage of gas, and for the location of compressor stations, pressure apparatus and other stations or equipment necessary to the proper operation of the pipeline.

The words "land or interest in land" certainly would permit the appropriation of a fee title. Land or interest in land. The appropriation of a fee title or any lesser title in the land, and of coursethe words "or other property" would include not only real property but the personal property, chattels of any kind.

The words "necessary for the storage of gas" means necessary in the judgment of the company, in the judgment of the condemnor. Courts do not inquire whether the determination made by the condemnor of necessity for a taking is proper or wrong. It is not a question for the courts at all. The powe to determine necessity is vested in the appropriator, in the condemnor. Particularly is that so when the condemnor is the Federal Government or an agency of the Federal Government to whom the power of eminent domain is delegated. That of course is a very broad power, that power to appropriate any property the company may deem necessary for the estab lishment, operation, and maintenance, I would say, of a gas-storage reservoir, in addition to its power to appropriate and acquire rightof-way.

The harm flowing from this broad, unfettered grant of power is obvious. If S. 525 were to become a law, natural-gas companies holding certificates of public convenience and necessity, issued by the Federal Power Commission under the provisions of the Natural Gas Act, would be able to acquire by condemnation land or interest in land or other property without limitation or restriction.

Let us consider a few examples of the kind of appropriation that gas companies could make under this proposed amendment to the Natural Gas Act. If S. 525 is enacted into law, such companies could appropriate land or interest in land or other property it considered necessary for the purposes of a storage reservoir and in doing that they could appropriate the right to pump gas into any strata of the earth. They could also obtain the right to store the gas under the earth. They could appropriate the right to take the gas out again. They could appropriate the right to do that; that is, that injecting and storing and taking out in only one particular strata under the surface of the earth, or they could appropriate it in all of the strata, or they could merely appropriate just the right to store gas underground under the provisions of this amendment to the bill.

By such latter appropriation, for example, appropriating just the right to store underground without specifying a particular strata, without acquiring the right to store in one strata, by such appropriation it could easily prevent other gas companies, its competitors, from storing under the surface of the earth. Such a company could appropriate the fee to the property of the landowner if it determined that the operation would require the storage in this reservoir and they could take his whole estate of the land.

If in the judgment of the company the safe operation of the reservoir required the taking of the land, they could.