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Wednesday, August 6, 2014

Op-Ed Looks at the Risks For Communities That Ban Fracking

Do fracking bans violate
landowners' consitutional rights?
From the Institute for Policy Innovation comes an op-ed discussing the fine line that communities walk when they decide to ban fracking.  Here is a portion:
The Fifth Amendment to the U.S. Constitution says, in part, that private property cannot be taken for public use “without just compensation.” Historically, that provision comes into play when a city or county government wants private land to build a public road. If a landowner won’t sell voluntarily, the government can “take” it through eminent domain, but still has to pay. Sometimes a government may let the owner keep most of the property but pay the individual the difference between its current value and the estimated reduced value after the road is built. 
Government regulations that substantially reduce the value of an owner’s property may also constitute a taking, according to the Supreme Court. For example, suppose a family buys expensive, beachfront property, and the government later prohibits its development. This would reduce the value of the land. The owners may be entitled to compensation. 
With respect to oil and gas drilling, there is a precedent for when the government effectively prohibits property owners’ right to profit from their mineral rights. In 1983, Miller Brothers Oil Corporation, based in Traverse City, Mich., leased privately owned mineral rights below the Nordhouse Dunes Wilderness, also in Michigan. When the company submitted its drilling plan to the state’s Department of Natural Resources, the agency rejected it, saying state law prohibited “any and all” energy development on the land. 
Miller and the mineral owners sued. In 1989 state Circuit Court Judge Peter Houk ruled that the state’s action was a taking of private property, and awarded the plaintiffs $71.5 million, upping that figure to $120.8 million in 1995—and the company never even had to drill. 
The court tried to accommodate the state’s environmental concerns by encouraging it to allow directional drilling under the ground, but the state refused. The government’s unwillingness to find a reasonable compromise triggered the award.
Click here to read the rest of the article.

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