The opinion of the court was delivered by: Curtin, District Judge.
On August 27, 1999, Plaintiff National Fuel Gas Supply Corporation
("National Fuel") commenced this action for condemnation pursuant to the
Natural Gas Act, 15 U.S.C. § 717 et seq., and pursuant to an Order
Amending Certificate of Public Convenience and Necessity, which was
issued by the Federal Energy Regulatory Commission ("FERC"). See Item 1,
Exh. A. By this action, National Fuel seeks an order granting it a
permanent easement for the underground storage of natural gas ("the
storage easement") under 138 acres of land located in Springville, New
York. Id. ¶ 1. In addition to naming the land itself, National Fuel
has named the following persons and entities as defendants: Robert and
Maria Dzara ("the Dzaras"); Matthew Mahl ("Mahl"); Ardent Resources,
Inc.; U.S. Energy Development Corporation ("U.S. Energy"); and various
"unknown others." Id. ¶¶ 6-10. To date, only the Dzaras and Mahl have
filed an answer to National Fuel's complaint. Items 14, 15.
I. Proceedings Before FERC
On July 1, 1998, National Fuel filed an application with FERC in which
National Fuel requested an amendment of its certificate of public
convenience and necessity. See Item 1, Exh. A, p. 1. By that
application, National Fuel asked FERC to authorize a "revised storage
field" for its Zoar Storage Field in Erie and Cattaraugus Counties. See
id. Notice of National Fuel's application was published in the Federal
Register on July 9, 1998. See 63 Fed. Reg. 38160 (1998). National Fuel,
Peoples Natural Gas Company, Columbia Gas Transportation Company, and the
New York State Department of Environmental Conservation ("the DEC")*fn1
all timely filed motions to intervene in the FERC proceeding. Id. at 2.
FERC granted all of these motions to intervene.
In April and May 1999, the Dzaras opposed National Fuel's application
by submitting various affidavits, documents, and pleadings with FERC.
Id. at 3. In their submissions, the Dzaras argued that: (1) U.S. Energy's
extraction of native gas from underneath the Dzaras' property had partly
caused the expansion of the Zoar storage field, and (2) that National
Fuel's storage field was an "outwardly drifting `run-away'" field that
posed a potential threat to the community. Id. However, FERC did not allow
the Dzaras to join the proceedings as parties because the Dzaras had not
requested permission for late intervention, nor had they explained why
they filed their opposition so delinquently. Id. at 3 n. 3.
B. FERC Hearing and Order
On July 28, 1999, FERC held a hearing and received "all evidence,
including [National Fuel's] application, and supplements, and exhibits
thereto. . . ." Id. at 5. On the basis of the evidence submitted, FERC
set forth a helpful factual background for this action:
National Fuel's Zoar Field was first used for the
storage of natural gas in 1916, and its present
certificated boundaries were established in 1948. . . .
The current certificated storage area of the Zoar
Field occupies 1,942 acres plus a 3,000 foot buffer
zone, for a total of 5,834 acres.
National Fuel has now determined, based on pressure
and production history, gas analysis, and analysis of
geological data obtained from recent drilling in the
Zoar Field, that the gas stored in the storage
reservoir actually occupies a larger area to the
northwest and southeast than was estimated decades ago
when the present boundary was defined. National Fuel
avers that the Zoar Field has not expanded; rather, it
has determined that the Zoar Field has all along been
occupying a larger area than believed when the storage
area was certificated. . . . In accordance with its
studies, it requests that the Commission expand
the authorized boundaries of the Zoar Field to reflect
the actual size of the storage reservoir.
Under National Fuel's proposed redefinition of the
storage field's boundaries the Zoar Field would be
expanded to encompass 6,841 acres plus a 5,236 acre
buffer zone, for a total of 12,077 acres.
In its resulting order, FERC noted that "it is standard reservoir
engineering practice to redefine the actual limits of the storage
reservoir . . . using data obtained during the later development and
operation of the storage field." Id. at 4. FERC concluded that after a
detailed evaluation of the geological and engineering
data submitted by National Fuel . . . we find . . .
that . . . [National Fuel's] proposed expansion of the
certificated Zoar Field reservoir storage boundary
area is necessary to protect the storage reservoir
from gas loss and to prevent other producers from
drilling into the reservoir's gas bubble.
Id. at 4. Thus, on July 29, 1999, FERC ordered that "National Fuel's
certificate of public convenience and necessity . . . is amended to
revise the certificated boundary of National Fuel's Zoar Storage Field as
described . . . in the body of this order." Id. at 5. By this order, FERC
approved National Fuel's application to expand the Zoar Storage Field by
more than 6,200 acres.
II. National Fuel's Present Action
National Fuel now comes before this court with its FERC order in hand
and states that the newly authorized Zoar Storage Field encompasses the
Dzaras' property, which consists of 138 acres situated at 13590 Trevett
Road in Springville, New York ("the Property"). See Item 1, Exh. B.*fn2
National Fuel seeks "a permanent gas storage easement in the Onondaga
rock formation, located approximately 1700 feet below the surface" of the
Zoar Storage Field. Id. ¶ 5. National Fuel's proposed easement
indicates that National Fuel would also need to install a certain number
of monitoring wells on the surface of the condemned property. See Item
28, Exh. B (proposed easement). National Fuel claims that it needs the
storage easement in order to operate the Zoar Storage Field, and that
"[o]peration of this natural storage field is critical to the ability of
National Fuel to supply its customers . . . with natural gas during the
fall and winter." Item 28, ¶ 6.
National Fuel and the Dzaras have not been able to reach an agreement
regarding what National Fuel should pay for the storage easement beneath
the Dzaras' land. However, National Fuel asserts in its complaint that it
has "made several good faith offers to Robert and Maria Dzara, the owners
of the property . . ., to purchase the permanent natural gas storage
easement at issue." Item 1, ¶ 12; see also Item 28, ¶ 5 (Miga
Affidavit) (stating that National Fuel made a "fair proposal" to the
Dzaras). As evidence of these good faith offers, National Fuel provided
the court with the correspondence between the parties regarding a
settlement value for the storage easement, as well as an affidavit from a
Senior Land Manager. See Item 1, Exh. D; Item 21; Item 28.
I. The Parties' Positions
A. National Fuel Requests Immediate Relief
Presently, there is no motion before the court.*fn3 Notwithstanding
the absence of a motion, National Fuel insists that it is entitled to,
and that the court is empowered to grant, an order immediately vesting
title to the storage easement in National Fuel. See Item 28, Exh. B
(proposed easement). Once title to the storage easement has vested,
National Fuel ...