Bluegrass Pipeline officials, opponents address legislators

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By Ryan Quinn
The State Journal

A legislative committee meeting drew about 150 people Thursday for a discussion on the proposed Bluegrass Pipeline, which could make its way through Kentucky.
Controversy has arisen over the safety and environmental risks of the project and the question of whether the pipeline companies have eminent domain to secure easements from landowners. All these issues came up Thursday, with lawmakers expressing both support and concern.
Williams and Boardwalk Pipeline Partners seek to establish a roughly 1,100-mile pipeline from natural gas mining regions northeast of Kentucky to plants on the Gulf Coast.
Sen. Robin L. Webb, D-Grayson, brought up alleged instances in which land surveyors for the companies have surveyed properties without owners’ permission — including the Kentucky State University Research and Demonstration Farm.
Despite requests from The State Journal, Williams has still not provided the name of the KSU official who a representative has said granted survey permission.
“There have been instances where we have had missteps,” Jim Scheel, senior vice president of corporate strategic development at Williams, told members of the Interim Joint Committee on Natural Resources and the Environment.
Scheel said it’s the company’s policy to ask permission and that it would continue “to do everything in our power to make sure we have great relationships going forward” and quickly address any issues.
The representatives of the natural gas liquids pipeline argued that the project would economically benefit Kentucky and the nation as a whole, adding jobs and contributing to lower energy costs.
About 500 miles of the pipeline, passing south through Ohio and Kentucky, would be new construction. That section would connect to 600 miles of existing pipeline that begins in Breckinridge County and goes south to Louisiana.
The pipeline would transport up to 400,000 barrels, or 16.8 million gallons, of natural gas liquids each day. Natural gas liquids, including hydrocarbons such as ethane and propane, are the byproducts of the natural gas mining process and would primarily be used to create plastics.
Scheel also said the project would mean $30 to $50 million would be paid out to landowners to secure easements. A Williams’ representative previously stated that easement acquisition would begin in August.
Regulators, including Len Peters, secretary of the Energy and Environment Cabinet, said they had little or no authority to regulate the interstate project.
But Tom FitzGerald, an environmental lawyer who directs the Kentucky Resources Council, said the Energy and Environment Cabinet has had regulation power for a decade due to a prior legislative decision, and said it’s time for the cabinet to act. He also called upon the governor to call a special session to deal the issue or, at the very least, take it up at the beginning of the next General Assembly in January.
Gov. Steve Beshear recently declined to take up the issue when the General Assembly met in August for a special session called to settle redistricting.
FitzGerald suggested landowners are currently being persuaded to sign for surveys and easements with the threat of having to give up easements anyway through eminent domain.
Pipeline officials maintain that they have that power, though they stressed they would only use it as a last resort and have used it rarely in previous projects.
FitzGerald and the Energy and Environment Cabinet have said they don’t believe the pipeline companies have such power because they don’t think the pipeline is a utility providing a public service to Kentuckians.
FitzGerald said after the meeting that it’s nice that he and the cabinet and several county attorneys agree that the companies don’t have the power of eminent domain.
“But that doesn’t protect the landowners who are out there when a company comes to them and says, ‘Oh, I’d like to voluntarily acquire an easement from you, but I have the power of eminent domain, but I really don’t want to do that to you,’” FitzGerald said.
“That’s not a negotiation at arm’s length,” he added. “That’s an inherently unfair situation.”
FitzGerald is confident the legislature will act to ensure only regulated utilities have the power of eminent domain.
Attendees — the majority seemed to be opposed to the project, judging by their applause when lawmakers asked tough questions of pipeline officials — did not get a chance to speak at the almost two-hour meeting, but they moved into another room afterward to voice their concerns.
Editor’s note: Reprinted with permission through the Kentucky Press News Service.