Daily Independent (Ashland, KY)

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September 5, 2013

Eminent domain contested for proposed pipeline

FRANKFORT — Whether a major new natural gas liquids pipeline crosses through the Kentucky bluegrass and parts of cave country may come down to who’s right about whether the companies who want to build the pipeline can invoke eminent domain.

The companies say they can but Kentucky’s Secretary of the Energy and Environment Cabinet, an environmental attorney and a number of landowners opposed to the pipeline say they can’t.

Eminent domain allows governments to seize private property for public uses or services even against the property owner’s wishes. Compensation for the property is determined by the government or the courts.

On Thursday, Dr. Len Peters, Secretary of Kentucky’s Energy and Environment Cabinet, told a legislative committee that his legal staff does not believe Williams Company or Boardwalk — the two companies partnering to construct the Bluegrass Pipeline — can invoke the legal ability to take private property for public use.

When Peters made his comments to the Natural Resources and Environment Committee a room full of pipeline adversaries cheered and applauded.

But Mike McMahon, general counsel for Boardwalk which is headquartered in Owensboro and already operates a pipeline which will be part of the NGL pipeline if it’s constructed, told lawmakers, “Yes, we do have eminent domain authority under Kentucky statutes.”

Michael Haines, general counsel for the EEC, said his research indicates the pipeline does not fit the public use requirement for eminent domain nor are the companies regulated utilities which could allow them the invoke eminent domain.

McMahon contends the legislature in 1992 eliminated the requirement that only regulated utilities have eminent domain authority.

Attorney General Jack Conway has not opined on the subject, but he said Thursday afternoon he is researching the question.

The two companies want to construct about 180 miles of new pipeline from the Marcellus and Utica gas fields in Ohio and Pennsylvania to Hardinsburg, Ky., where it would connect with an existing 160-mile pipeline owned by Boardwalk and is tied to a network which could eventually transport the NGLs to the Gulf of Mexico.

The company is exploring multiple paths along a general route and negotiating with landowners for rights-of-way. The pipeline would be buried three feet underground, leaving the surface for continued use by property owners, according to Geordie Robinson of Williams.

Tim Scheel, Williams Vice President, said the pipeline would mean $136 million of new tax revenue for the state, create 1,500 construction jobs and about 80 permanent jobs, and result in between $30 million and $50 million in payment to private property owners.

McMahon expects the companies to negotiate voluntary agreements with 98 to 99 percent of landowners before needing to resort to eminent domain on the remaining 1 to 2 percent.

But Sen. Robin Webb, D-Grayson, said she’d heard complaints from landowners that company officials are entering private property without prior permission. Scheel said that isn’t company policy but acknowledged it had happened.

Later after the meeting, opponents gathered in another meeting room where landowners claimed company officials have surveyed their properties without permission.

Joann Sadler, 80, who owns 1,600 acres in Scott County along with her brother, said company officials continue to survey on her land despite her warnings they’re not welcome. She told them at 80 she isn’t afraid of being jailed and they would be wise to stay off her property.

“But they just say, ‘Oh, isn’t she cute?’ and keep on coming onto our property,” Sadler said.

Tom Fitzgerald of the Kentucky Resources Council also told the committee the companies can’t legally invoke eminent domain and urged lawmakers to establish a statewide siting board to conduct “comprehensive, advance review of such pipelines.”

He also warned them of the danger of constructing the pipeline in Karst regions around Mammoth Cave where limestone features create sink holes and networks of caves. Pipeline leaks could contaminate underground water systems before they are discovered he said.

The ultimate fate of the pipeline is likely to be determined either by the legislature or by the courts.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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