Collins v. Public Service Commission, 45179

• Citation: 365 Mo. 1086,293 S.W.2d 345
• Decision Date: 09 July 1956
• Docket Number: No. 45179,45179
• Parties: , 15 P.U.R.3d 265 C. Richard COLLINS and Floyd Collins, d/b/a Collins Brothers Oil Company, a Partnership, Appellants, v. PUBLIC SERVICE COMMISSION of Missouri, Respondent, Laclede Gas Company, Co-Respondent.
• Court: United States State Supreme Court of Missouri

Page 345

293 S.W.2d 345

365 Mo. 1086, 15 P.U.R.3d 265

C. Richard COLLINS and Floyd Collins, d/b/a Collins Brothers Oil Company, a Partnership, Appellants, v. PUBLIC SERVICE COMMISSION of Missouri, Respondent Laclede Gas Company, Co-Respondent.

No. 45179.

Supreme Court of Missouri, En Banc.

July 9, 1956.

Rehearing Denied Sept. 10, 1956.

J. J. Middleton, Craig & Craig, Howard W. Campbell, Mount Vernon, Ill., Fordyce, Mayne, Hartman, Renard & Stribling, Nelson W. Hartman, Joseph R. Long, John P. Baird, Jr., St. Louis, for C. Richard Collins and Floyd Collins, d/b/a Collins Bros. Oil Co., appellants. Glenn D. Evans, Gen. Counsel, Frank J. Iuen, Asst. Gen. Counsel, Jefferson City, for respondent Public Service Commission.

Thompson, Mitchell, Thompson & Douglas, Guy A. Thompson, James M. Douglas, Richard L. Eckhart, St. Louis, for corespondent Laclede Gas Co.

WESTHUES, Judge.

On August 29, 1953, the Laclede Gas Company of St. Louis, Missouri, filed application with the Public Service Commission seeking authority to exercise the power of eminent domain, as provided for in Sections 1-10A, Laws 1953, pp. 513-517, Sections 393.410-393.510 RSMo 1949, V.A.M.S., to acquire subsurface rock formations underlying 6,000 acres of land in St. Louis County and in St. Charles County, Missouri, for the purpose of storing gas therein for distribution and sale. On February 2, 1954, an amended application was filed. A number of intervening petitions were filed in objection to the application. One of these was filed by C. Richard Collins and Floyd Collins, doing business as Collins Brothers Oil Company, a partnership. Their application for intervention was allowed. Other such petitions were also sustained and an extensive hearing was had before the Public Service Commission. The Commission granted the application of the Laclede Gas Company. Collins Brothers Oil Company instituted review proceedings in the Circuit Court of Cole County. That court affirmed the order of the Commission and Collins Brothers Oil Company appealed to this court.

Collins Brothers alleged they held valuable oil and other mineral rights under lands affected by the proposed gas storage; that they had commercially producing oil wells thereon. That was the ground upon which they were allowed to intervene.

In the course of the opinion we shall refer to Collins Brothers Oil Company as appellants, to the Laclede Gas Company as Laclede, and to the Public Service Commission as the Commission.

Appellants briefed four questions seeking a reversal of the judgment of the Cole County Circuit Court affirming the order of the Commission. They are as follows (omitting citations of authorities):

'I. The Commission's order that it is in the public interest for Laclede to exercise condemnation is contrary to the law and the evidence, and this Court may review the evidence unhampered by the findings of fact by the Commission, and, thereupon may enter a lawful order on the Record.

'II. The Storage Act delegates to the Commission its power to determine when eminent domain shall be exercised without fixing any standard or criteria to guide the action of the Commission, and the aid (Act) therefore is unconstitutional as an unlawful delegation of legislative powers.

'III. The Storage Act authorizes the taking of property for private use and without compensation.

'IV. The classification of property subject to condemnation under the Storage Act is unjust, the selection of persons by the Commission who may exercise condemnation is arbitrary, and the Act is unconstitutional under the State and Federal Constitutions as discriminatory, denying equal privileges and immunities due process of law.'

We shall dispose of these points in the order stated.

Laclede is a public utility subject to the regulation of the Commission. Its business is selling gas to the public in the City of St. Louis and in St. Louis County, Missouri. At the time of the hearing before the Commission, Laclede was selling about 90% of the fuel for cooking and 37% of the fuel for heating homes. There were on file with Laclede about 25,000 applications of home owners desiring gas for heating their homes. The gas supply to Laclede was limited and therefore the Commission had by order curtailed Laclede's sales of gas for heating homes. Laclede was forced to refuse service to many applicants. Desiring to furnish its product to all applicants, Laclede sought ways and means to obtain a larger supply of gas for this purpose. It investigated the laying of additional pipe lines to points where gas was available. It was found that the cost of installation was exorbitant. The Mississippi River Fuel Corporation supplied the natural gas used by Laclede. The amount, however, was limited to 300,000,000 cubic feet per day. This was more than needed during the summer months. However, during the winter months, especially in zero weather, the peak load was so great it was insufficient to supply the demand. Laclede studied various methods in attempting to meet the demand for more gas. These investigations disclosed that storing the surplus gas not needed during the summer months and drawing on that supply in the winter was a method of meeting the situation.

Dr. Edward L. Clark, the Missouri State Geologist, was consulted. Then Max and Douglas Ball, and Carl A. Bays and Associates, oil and gas consultants, were employed to conduct explorations and determine the feasibility of storing gas underground in the St. Louis area.

These men, Dr. Clark, Max Ball, Douglas Ball, and Carl A. Bays, all experts in the matter of storage of gas under ground, testified for applicant-Laclede at the hearing before the Commission. From their evidence, we learn that underneath an area of about 6,000 acres in the northern portion of St. Louis County and in a small portion in St. Charles County gas may be safely stored about 1200 feet or more below the surface of the land and the Missouri River. It is referred to as the 'Lange area'--so named because the first test drill was made on land belonging to a man named Lange. A sandstone stratum referred to as the St. Peter formation is located about 1100 to 1400 feet below the surface. It has an anticline or saddleback position or formation thereby creating a dome or trap. The St. Peter formation is overlaid by three strata impermeable to gas. They are, as stated by witness Carl A. Bays: 'The St. Peter reservoir is overlain by three formations, the Joachim, Plattin, and Decorah, all of which are impermeable to gas, having been impermeable to chemical mingling of waters and significant pressure differences for long periods of geologic time. The strata form multiple sealing beds with much more than adequate caprock for the reservoir.' Above the Decorah lies the Kimmswick formation from which appellants are obtaining oil. All of these strata are more than 500 feet below the surface and do not contain any of the products enumerated in Section 393.460 of the Gas Storage Act, supra. These witnesses testified that approximately 29 billion cubic feet of gas may be stored in this St. Peter dome formation. The method to be used is to pump gas into the St. Peter sandrock displacing the water or forcing it back. The three strata lying above the St. Peter, as above-mentioned, will hold the gas in the dome from whence it may be released through pipes when needed. Note the evidence of Douglas Ball as to the requirements for safe storage of gas:

'Three chief things are required for a safe and successful storage field: first, a reservoir bed, usually sandstone or limestone, porous enough and thick enough to contain an appreciable percentage of fluids per unit volume of itself, and permeable enough that fluids can move readily through it; second, a cap rock or sealing bed, such as clay shale, overlying the reservoir, impermeable enough and continuous enough that fluids cannot move through it to escape from the reservoir; third, a trap, a structure or condition of the rocks that confines a gas accumulation to a relatively small lateral area of the reservoir. The traps easiest to find and most commonly known are closed anticlines, rocks folded to form domes.

'Natural gas fields have all these requisites and in addition have a nature given supply of gas in the reservoir. Where the natural fluid is water, the reservoir is known as an aquifer. Man stores gas in an aquifer by drilling into the reservoir at the top of a structure and displacing some of the water with the stored gas simply by pumping the gas in against the water's pressure.'

The cost of the original exploration was at the time of the hearing about $800,000.

The first hearing was held before the Commission on March 19, 1954. The intervenors requested that they be given time to study the evidence of the witnesses and asked for a postponement of the hearings to a future date at which tiem they desired to cross-examine each witness. The request was granted and the date for further hearing was set for April 19. The several intervenors through their counsel at that time cross-examined each witness at length as to every material matter and many immaterial matters on the issues involved. Carl A. Bays, Douglas Ball, and Max Ball were cross-examined about the Herscher storage field located in northern Illinois and used for gas storage to supply Chicago with gas. They, as well as Dr. Clark, were cross-examined in detail about every phase of the proposed storage in the St. Peter sandstone. It is our opinion that these cross-examinations strengthened rather than weakened Laclede's contention that gas may be stored profitably and safely in the Lange area. Appellants introduced evidence showing that at the Herscher storage field, gas had been leaking and coming to the surface ever since it had been used; that water supplies had been contaminated; that the gas company, owner of the storage, had supplied farmers and also the village of Herscher with water. Appellants...