FRANKFORT, Ky. (Sept. 6, 2013) — A proposed interstate natural gas liquids pipeline that would impact landowners in at least 25 Kentucky counties does not qualify under the state’s eminent domain law, the head of the state’s Energy and Environment Cabinet on Thursday quoted his agency’s general counsel as saying.
Cabinet Secretary Len Peters made the comment during Thursday’s meeting of the Interim Joint Committee on Natural Resources and Environment in Frankfort. He said while his agency does not have the authority to stop the proposed “Bluegrass Pipeline” project — which would transport natural gas liquids (NGLs) like ethane and propane extracted from natural gas deposits in the Northeast U.S. through Kentucky and surrounding states and on to the Gulf Coast — the Cabinet’s legal counsel does not believe the power of eminent domain can be invoked by the companies hoping to establish the 1,123 mile NGL pipeline through Pennsylvania, West Virginia, Ohio, Kentucky, and down to the Gulf.
Mike McMahon, chief general counsel for Boardwalk — half of the team of Williams and Boardwalk that plans to build the Bluegrass Pipeline — said Kentucky law does give the companies the power of eminent domain, if necessary (i.e., a landowner does not consent to allowing his or her land to be utilized for the pipeline project) in order to obtain right-of-way. Eminent domain can be invoked under Kentucky law for public use projects, and McMahan said the pipeline qualifies since it would transport oil and gas products “in public service.”
Sen. Whitney Westerfield, R-Hopkinsville, said he does not believe the project qualifies since it is not, in his view, a “public utility.”
Right-of-acquisition, permitting, regulatory consultation, and surveys undertaken by Williams and Boardwalk as part of the Bluegrass Pipeline project is expected to continue into 2014. The timeline for the project, found at bluegrasspipeline.com, says the pipeline should be operational by late 2015.
As planned, the Bluegrass Pipeline would carry NGLs from the Marcellus and Utica shale deposits of the Northeast U.S. to the Gulf Coast by tying new pipeline into an existing natural gas pipeline located between Hardinsburg, Ky., and south Louisiana. That existing pipeline would be converted to carry NGLs, under the proposal.
The project would require acquisition of right-of-way for 160 miles of converted pipeline and 180 miles of new pipeline in Kentucky, according to Williams Senior Vice President for Corporate and Strategic Development Jim Scheel. Scheel said Williams and Boardwalk are prepared to pay between $30 million and $50 million to Kentucky landowners to acquire the right-of-way while leaving the deeds in the landowners’ hands.
He assured the committee and the large public audience at the meeting that the Bluegrass Pipeline project would be well regulated at both the federal and state levels, that land acquired for the project would be left in “usable” condition, and the project would bring jobs to the commonwealth. Scheel said the pipeline project would bring at least $136 million in tax revenue to the state, along with around 1,500 construction jobs and the $30 million to $50 million in payments to landowners.
Speaking in opposition to the pipeline was attorney Tom FitzGerald of the Kentucky Resources Council, which advocates for landowners who are opposed to the project. Besides questioning the pipeline’s safety in light of recent NGL pipeline leaks (including a well-publicized incident early this year in Parachute, Co), FitzGerald said he agrees with Peters’ staff that the Bluegrass Pipeline does not qualify to invoke Kentucky’s eminent domain statute.
But FitzGerald said Kentucky landowners will continue to feel “the threat of condemnation” by the pipeline companies until more protection is placed in state law.
No official action was taken on the issue by the committee at Thursday’s meeting.
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