Commonwealth of Pennsylvania v. State of West Virginia State of Ohio v. Same

Citation67 L.Ed. 1117,262 U.S. 553,32 A.L.R. 300,43 S.Ct. 658
Decision Date11 June 1923
Docket Number16,Nos. 15,s. 15
CourtUnited States Supreme Court

[Syllabus from pages 553-555 intentionally omitted] Messrs. John W. Davis, of New York City, John G. Price and Freeman T. Eagleson, both of Columbus, Ohio, R. G. Altizer, of Charleston, W. Va., and Edward E. Corn, of Ironton, Ohio, for the State of Ohio.

[Argument of Counsel from pages 555-566 intentionally omitted]

Page 566

Messrs. G. M. Hoffheimer, of Clarksburg, W. Va., E. T. England and Fred O. Blue, both of Charleston, W. Va., Philip P. Steptoe, of Clarksburg, W. Va. and W. S. John, of Morgantown, W. Va., for the State of West Virginia.

Messrs. Geo. E. Alter, of Pittsburgh, Pa., W. I. Schaffer, of Chester, Pa., and A. Leo Weil, of Pittsburgh, Pa., for the Commonwealth Wealth of Pennsylvania.

[Argument of Counsel from pages 566-581 intentionally omitted]

Page 581

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

These are suits, one by the commonwealth of Pennsylvania and the other by the state of Ohio, to enjoin the state of West Virginia from enforcing an act passed by her Legislature (Acts 1919, c. 71) which the complainants believe will largely curtail or cut off the supply of natural gas heretofore and now carried by pipe lines from West Virginia into their territory and there sold and used for fuel and lighting purposes. Although distinct, the suits are so much alike that they have been presented at the bar substantially as a single case. They will be dealt with accordingly in this opinion.

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The West Virginia act is set forth at length in the margin.1 The complainants challenge its validity on the ground that it directly interferes with interstate commerce and therefore contravenes the commerce clause of

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the Constitution of the United States (article 1, § 8, cl. 3), and they rest their right to relief on the grounds that to enforce the act will subject them to irreparable injury in respect of many of their public institutions and governmental agencies, which

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long have been and now are using this gas, and will subject them to further and incalculable injury, in that (a) it will imperil the health and comfort of thousands of their people who use the gas in their homes and are largely

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dependent thereon; and (b) will halt or curtail many industries which seasonally use great quantities of the gas and wherein thousands of persons are employed and millions of taxable wealth are invested.

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The conditions out of which the suits have arisen and the facts material to their disposal are as follows:

Natural gas is found at pronounced depths in porous strata usually sand rock—constituting a natural reservoir, and is brought to the surface and reduced to possession through wells drilled into the containing strata. When a surface owner thus reduces it to possession he becomes its owner, and it becomes a subject of commerce, like any product of the forest, field, or mine. In the inclosing strata it is under great pressure, called rock pressure, which causes it to flow out rapidly when the strata are penetrated. If one surface owner drills wells and begins to draw off the gas, others desiring to exercise their common right must take the same course, for otherwise the g § under their lands may be drained out by those wells. After the gas is drawn from the inclosing strata there is no practicable mode of storing and holding it. It must be used promptly. Its chief use consists in producing heat and light by burning it. The points of use generally are in centers of population or of industry more or less remote from the places of production. The intervening transmission is effected through pipe lines. The normal rock pressure will carry the gas considerable distances and when that pressure wanes or is inadequate it can be supplemented by using compressors.

In West Virginia the production of natural gas began as much as 30 years ago and for the last 14 years has been greater than in any other state. The producing fields include 32 of her 55 counties. At first the gas was produced only in the course of oil operations, was regarded as a nuisance and was permitted to waste into the air. But it soon came to be regarded as valuable for heating and lighting, and the economy and convenience attending its use made it a preferred fuel. Its use within the state became relatively general, but was far less than the production, so the producers turned

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to neighboring states, notably Pennsylvania and Ohio, for a further market.

West Virginia sanctioned that effort. She permitted the formation under her laws of corporations for the purpose of constructing pipe lines from her gas fields into other states and carrying gas into the latter and there selling it; she also permitted corporations of other states to come into her territory for that purpose; and she extended to all these companies the use of her power of eminent domain in acquiring rights of way for their pipe lines. In no way did she then require, or assert any power to require, that consumers within her limits be preferred over consumers elsewhere. The effort to find a further market succeeded, and the gas came to be extensively carried into Pennsylvania as far as Pittsburgh, and into Ohio as far as Cleveland, Toledo, and Cincinnati. In that way the entire production was made of value to the producers. Landowners and lessees in the gas fields were greatly benefited and the taxable wealth of the state was largely increased. Approximately $300,000,000 were invested in the business—fully one-half in West Virginia. More than 7,000 miles of the pipe lines are in that state—2,000 miles being trunk lines.

Some of the pipe lines reach from the producing fields to the areas of consumption in Pennsylvania and Ohio. Some connect at or near the state line with others leading to the consuming areas. All are so operated that there is a continuous flow of gas from points of production to points of use. Branch lines divert some of the gas at intervening points, but without changing the general flow. Several lines cross and recross the state boundary repeatedly.

The pipe lines are all operated as public utilities, that is, in supplying gas to the public, and this is true in Pennsylvania and Ohio as well as in West Virginia. The lines long have been and now are supplying gas to the

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three states for use in their charitable, educational, and penal institutions, to their counties and municipalities for use in county, city, and school buildings, to local utilities serving particular communities, to the people generally in many cities and towns for use in their homes, places of business, and offices, and, in seasons when there is an adequate supply, to industrial plants for use in their operation. The predominant use is for fuel purposes; that for lighting being relatively small. All gas going into Pennsylvania and Ohio is carried and supplied under prior engagements respecting its disposal—most of it under long time contracts exacted or preferred by the purchasers or consumers.

Experience in other gas fields has shown that multiplied and prolonged drafts on the natural supply will exhaust it. Since 1916 it has been apparent that the older portions of the West Virginia fields are approaching exhaustion and that produc ion in those fields has reached and passed its maximum. The newer portions, however, in the judgment of informed operators, will make the fields commercially productive for several years more.

Latterly during the colder months—from November 1 to May 1 the combined needs of domestic and industrial consumers have been largely in excess of the production, and the pipe line companies generally have adopted and are pursuing the policy of preferring domestic consumers during those months. All the long-time contracts contain provisions admitting of such a preference. During other months, when there is little occasion for heating homes and offices, the needs of domestic consumers drop so materially that much gas may be and is supplied for industrial use without affecting the domestic use. But increased population, enlarged industry—particularly in West Virginia—and the advantages inhering in the gas as a fuel have finally resulted in a gross demand, which cannot be satisfied even in the

Page 589

summer months. The present actual consumption is all that the production will sustain. The pipe line companies cannot supply more gas in West Virginia without cutting down what they carry into Pennsylvania and Ohio; nor can they carry more into Pennsylvania and Ohio without cutting down what they supply in West Virginia. In short, the situation is such that to constrain the companies to supply more gas in any one of the three states necessarily will constrain them to supply less in the other two.

In 1918, 265 billion cubic feet of gas were produced in West Virginia, 38 billion were consumed within the state without becoming available to the public, and 227 billion became available in the hands of the pipe line companies. The companies supplied 70 billion to consumers in the state and carried 157 billion to consumers outside. They also brought 4 billion into the state from gas fields outside and to that extent enlarged the amount supplied to local consumers. Of that amount, 21 billion went into domestic use and 53 billion into industrial use. The major part of the gas carried into Pennsylvania went to industrial consumers, and the major part of that carried into Ohio went to domestic consumers.

The gas carried outside the state is sold for more than that used therein, but this naturally would be so, considering the additional pipe lines, compressors, and labor employed in the longer transmission. The proportion marketed beyond the state has not varied much. It now is practically what it was 10 years ago. Nor has there been any...

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