Pipeline officials tell state legislators they have eminent domain authority
Sen. Robin Webb asks a question about the proposed Bluegrass Pipeline during Thursday’s meeting of the Interim Joint Committee on Natural Resources and Environment. More than 300 people packed the meeting room to hear testimony. Photo courtesy LRC Public Information.
By JIM BROOKS
Nelson County Gazette
Friday, Sept. 6, 2013, 2 a.m. — Representatives of the proposed Bluegrass Pipeline told a joint legislative committee Thursday that they believe they have the right to use eminent domain in their effort to build an 180-mile natural gas liquids (NGL) pipeline across the eastern half of Kentucky that will connect to an existing pipeline in Hardinsburg.
“We do have eminent domain authority under Kentucky statutes,” Mike McMahon, chief general counsel of Boardwalk Pipeline Partners told legislators, explaining the pipeline will be transporting NGLs across state lines “in public service.”
But eminent domain is only used as a last resort, he explained.
“Acquiring the right-of-way in a lengthy process that takes time,” he said. Eminent domain is used only on “rare occasions.”
The state’s top energy official disagreed, stating the pipeline project did not have eminent domain authority.
Tom FitzGerald, director of the Kentucky Resources Council, voices concerns about the proposed pipeline project.
Len Peters, secretary of the Kentucky Energy and Environment Cabinet, told legislators his agency’s attorneys “do not see how eminent domain can be invoked” for the proposed NGL pipeline, prompting many of the 300 people who attended the hearing erupted in applause.
The cabinet’s legal counsel, Michael Haines,, told the panel that’s because NGL pipelines are not considered “common carriers” or “public utilities.”
In his testimony before the panel, Tom FitzGerald, director of the Kentucky Resources Council, agreed that the pipeline company could not claim eminent domain.
“It doesn’t really matter though, the problem is that as long as the threat is there, unless this next Kentucky General Assembly is going to take action, the landowners will feel the threat implied by eminent domain,” he said. Property owners will grant easements because they feel like they have no choice.
“Negotiations under the threat of eminent domain are ultimately unfair,” he said.
FitzGerald said Gov. Steve Beshear should call a special session to address the question of eminent domain, or otherwise address the issue in the 2014 General Assembly.
Jim Scheel, senior vice president of corporate strategic development at Williams, discusses the project’s benefits to Kentucky.
QUESTION OF SAFETY. Company officials cited numerous benefits the pipeline offers Kentucky, which included access to low-cost energy sources, which will make the state more attractive for manufacturing.
Jim Scheel, senior vice president of corporate strategic development at Williams, cited the safety record the companies have as corporate partners in communities across the state. Boardwalk Pipeline Partners own Owensboro-based Texas Gas Transmission.
“We have great relationships — multi-generational relationships in some cases — with landowners,” Scheel said. “We’ll be good stewards.”
He noted that there was some misinformation being spread about the amount of oversight and regulation of the pipeline.
“We take safety and regulations very seriously,” he said. “As we build and operate the pipeline we’ll be subject to state and federal regulations.”
The U.S. Army Corps of Engineers is the main agency that handles federal regulation, but the company also plans to work with state agencies for the wildlife, water, cultural and geo-technical surveys.
There’s a lot of oversight on the proposed pipeline project, adding that the company supports that oversight.
“We are also very aware of some of the unique geology in Kentucky, including the karst issues,” Scheel said, addressing another big concern of pipeline opponents.
State Sen. Robin Webb, D-Grayson, asked the company officials how they justified going on private property and conducting surveys without permission, referring to verified reports that survey work was conducted without first gaining property owner approval.
Scheel apologized for company representatives who failed to get permission before entering property. “We will be asking for permission, and in most cases we have,” he said. “You have every right to feel that we should do that, and we agree with you. Today is a step in that direction.”
Rep. Reginald Meeks poses a question regarding an NGL spill in Colorado.
Rep. Reginal Meeks mentioned an NGL pipeline leak in Colorado and its environmental impact there. “What would it do in the karst areas and earthquake-prone areas of Kentucky?
No leaks are considered acceptable, Scheel explained. “I don’t expect it to happen, but we are positioned to respond and clean it up if it happens.”
Jeff Derouen, executive director of the Kentucky Public Service Commission told the legislative panel his agency has no oversight regarding the construction or siting of the new pipeline unless that authority is granted by the Kentucky General Assembly.
The PSC will have some oversight on the conversion of the existing natural gas line the company plans to covert for NGLs, he said. The company plans to convert 160 miles of existing natural gas pipeline in Kentucky to transport NGLs to their ultimate destination in Louisiana.
Scheel said the pipeline’s route is far from finalized.
“We’re looking for a prudent route that is environmentally satisfactory,” he said. “We want to be a good citizen and a good part of the community.”
Committee co-chair Sen. Joe Bowen told the committee Texas Gas and Boardwalk Pipeline Partners have been good corporate citizens who have always been a very safety-conscious company.
“I feel far better with these guys than many others who might be involved,” he said “I don’t think you’ll find a more thorough and professional company.”
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