Category: Michigan Eminent Domain

Tax Cuts For Oil Drilling In Michigan


With the March passage of a tax cut for oil drilling, the prospect of further mineral removal in the State is increased. While there may be those who think nothing should be taken out of the ground, the reality is that Michigan is still in a position of cost competition with other jurisdictions.

Carbon dioxide is one of the alternatives in fracking. The downside of carbon dioxide is that the wells will no longer be available for gas storage in future years. However, the utilization of carbon dioxide removes the product as a negative force in the general environment.

“Under House Bill 4885, sponsored by state Rep. Aric Nesbitt, companies that use an enhanced method of extracting oil, also called enhanced oil recovery (EOR), will benefit from reduced taxes. Under this bill, EOR projects will be taxed at a 4% severance rate, rather than 6.6% for oil and 5% for natural gas, as has been the case under Michigan’s Severance Tax Act.

The method uses CO2, which is injected into depleted oil and natural gas wells to push the once-unattainable oil toward other wells where it may be pumped to the surface. It offers the environmental benefit of permanently trapping the CO2underground.”

Michigan Supreme Court Finding That Public Pension Plans Are Not A Property Right Has Important Relevance to Municipal Bankruptcy

In the recent Michigan Supreme Court decision opposing the changes to the Michigan pension system for teachers, the Supreme Court has found that “just compensation” is not to apply.

This likely will mean that in the case of a future community bankruptcy in Michigan, the pension will not be a protected property right in Federal Court, as claimed by pensioners in the recent City of Detroit bankruptcy.

One can foresee the application of this case in other states, such as Illinois, which is underwater due to the community pension obligations.

Justice Stephen Markman, writing for the court, rejected unions leaders’ contention that the law unconstitutionally impaired employment contracts between workers and their school districts and resulted in private property being taken without just compensation.

The increased salary deductions are not mandatory, and the employees were given a choice, he said.



Ugh, Eminent Domain Alone Will Not Revive Detroit


For twenty-six years, the City of Detroit utilized eminent domain as an economic development tool. John Mogk writes about the successes of GM Hamtramck and Chrysler Jefferson Avenue North as clear examples of the benefits of public acquisition of private property.

There seems to be a failure in the Crain’s opinion here on two counts. First, the projects were not always so beneficial, and only inflation and other failures of the City administration makes those projects “good” now. Second, people did get hurt despite studies prepared years after with an incomplete response from the then residents of the Poletown community. Finally, one only needs to look at what is going on in downtown Detroit now. Without eminent domain, redevelopment is occurring every day. Detroit’s downtown never had this rebirth during the whole period of this acquisition for private gain is how public policy did occur from 1978 through 2003.

Detroit does not have the ability to quickly assemble land in large enough tracts to support major projects. The last two auto plants built in the city — the GM Hamtramck and Chrysler Jefferson Avenue North assembly plants — each required more than 450 acres and the use of eminent domain to acquire their sites. However, the use of eminent domain for economic development is no longer available in Michigan. The state constitution was amended in 2006 to prohibit its use for economic development, no matter how beneficial the projects might be for alleviating unemployment, rebuilding the city’s economy and increasing the tax base.

While eminent domain can still be used to eliminate blight, the term is narrowly defined, requires a high level of proof and must be demonstrated separately on each parcel to be taken. Large development sites are required to be assembled by separately negotiating the purchase of hundreds and often thousands of parcels, making site preparation costly, time consuming and practically impossible. Moreover, interspersed properties that are not blighted and held by speculators or absentee landlords can stop any future project.

When Is A Song A Song? Rover Reroute


ET Rover maintains it will eliminate 110 miles of a proposed pipeline. In a recent Livingston Daily article, a local resident notes that ET Rover could still “expand their capacity” by providing a “loop” pipeline around the existing pipeline.

Owners should review the original easement documents to determine limitations on pipe expansion created by the easement itself as well as the original MPSC delegation.

So that takes us back to the original route but without new pipe through most of Livingston County and to the east. On the surface that sounds really good, but it is still clouded by the fact that ET Rover could still “expand their capacity” by installing a “loop” pipeline along the existing line. Their statement which says they have no plans to do so “at this time” makes many of us uneasy. As Jeff Insko says in his “Line 6B Citizens’ Blog,” “Landowners along the Vector line are now, as a friend of ours put it, living with a second shoe dangling over their heads, waiting to drop.”

The four Sierra Clubs in southeast Michigan plan to continue to oppose the pipeline by holding a series of meetings with federal legislators. Our hope is to present information to them that would certainly not have been suggested by the pipeline companies.

Mackinac City Moves Forward with Eminent Domain

After years of bickering with local property owner(s), the City of Mackinac is now attempting to acquire the “coal dock” property by eminent domain. This is something which will effect far more than a simple individual property in the community.


The City of Mackinac Island has filed a lawsuit in 11th Circuit Court against Union Terminal Piers, requesting financial information on the company’s Coal Dock, which the city wants to purchase or take by eminent domain. Mayor Margaret Doud authorized city attorney Tom Evashevski to file the lawsuit Tuesday, February 3, and announced it to the city council Wednesday, February 4. 

Nexus is Not Rover


Attached is the Nexus Gas Transmission Project Overview Map, Timing and Regulatory Process Information.

The Nexus line will terminate at Willow Run. This is because there is another line which traverses from Willow Run through other lines into Sarnia, Ontario.

At this time, the plan contemplates the filing of an application seeking FERC approval in November, 2015.

In November, 2016, agents of Nexus stated that they expect the approval from FERC. If received, the work will begin in late 2017. In other words, the project is about two years away.

Also attached is a copy of the EIS pre-filing environmental review process, with where the process is. The open house required for the EIS pre-filing environmental review process is circled.

The issue is not whether this project will work. Rather, it is a question of whether FERC will find that there is an excess capacity and therefore no need for FERC approval of an application. Realistically, one can suspect the Rover pipeline, and its contemplated use of the under-utilized Embridge pipeline is premised, at least in part, upon the fact that the Rover pipeline only needed to travel to Ypsilanti, Michigan and not through the more densely populated Detroit or Detroit suburban areas.

Unfortunately, this blogger stated that it was the Rover pipeline for which a meeting was being held in Adrian, Michigan on February 17, 2015. Rather, it was for the proposed Nexus pipeline that was going through the application process.

There was a large attendance at the meeting. Literally hundreds of homeowners and farmers will be effected by this pipeline project. While there is a live breath offer as to where the pipeline will be, clearly those owners who would receive notice are potentially in the path of the pipeline.