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Kinks in the pipeline

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Updates on the Bluegrass Pipeline project

By Stephen Lega

The Bluegrass Pipeline remains a work in progress.
Governor Steve Beshear doesn't see it as a pressing issue, but at least one group of legislators is trying to learn about the project and its potential impact.
Executives from the Williams and Boardwalk Pipeline Partners testified Sept. 5 before the Interim Joint Committee on Natural Resources and the Environment. The hearings were broadcast live on KET, and the video of the hearing remains available online (http://www.ket.org/legislature/archives.php).
Much of the testimony at the hearing reiterated information many of us already knew. Williams and Boardwalk see a pipeline as the safest way to transport natural gas liquids. They believe the Bluegrass Pipeline project will carry NGLs to processing facilities along the Gulf Coast, and they see NGLs as a vital part of the American economy, citing NGLs uses in making a variety of plastic products and in some types of fuel.
They also testified that the Bluegrass Pipeline would bring hundreds of jobs to Kentucky and generate about $136 million in ad valorem taxes for schools and local and state governments over 10 years.
Williams and Boardwalk officials also repeated that they believe they have the right to exercise eminent domain. They said they are able to reach right-of-way agreements with landowners in most cases, although they have pursued eminent domain in a small percentage of cases.
Jeff Derouen, the executive director of the Kentucky Public Service Commission, and Len Peters, Kentucky Energy and Environment Cabinet secretary, both testified that they asked their attorneys to look into the eminent domain issue. Both said their attorneys did not think the Bluegrass Pipeline project would qualify for eminent domain under state law.
Derouen also testified that the PSC would have no authority with regard to NGLs. He also referred to an opinion issued by PSC attorneys in which they concluded that no certificate would be required prior to the construction of an NGL pipeline. (That opinion is available here http://psc.ky.gov/browseLibrary.aspx?typ=OPIN. It is the opinion dated July 30, 2013.)
Tom FitzGerald of the Kentucky Resources Council (a private organization that advocates for property owners) agreed with the PSC and energy cabinet, but he pointed out that at this point their views were just opinions. He said until the issue goes before a court, no one would really know how the law would be interpreted. He also urged the legislature to take action to clarify the eminent domain laws to make sure it would not apply to an NGL pipeline.
It was clear from the questions that some legislators shared the concerns of pipeline opponents, particularly with regard to how the company has approached landowners and with safety concerns.
State Sen. Robin Webb asked specifically about a dispute regarding a survey on property belonging to Kentucky State University. According to news reports, company officials said they have permission to survey the property, while university officials deny that anyone gave them that permission.
With regard to safety, Jim Scheel, Williams senior vice president of corporate strategic development, said safety is a top priority, and no incident is acceptable. He also said if an incident occurred, he would be confident that the companies would deal with it from a financial perspective.
Obviously, the hearing touched on more issues than I can get into in this space, but I would encourage anyone interested in the Bluegrass Pipeline project to view the video online.
I also received a press release about the hearing from Tom Droege, a spokesman for Williams. In that release, the company encouraged anyone with questions about the project to call (888) 336-3252.
The press release also reads that the companies will be announcing a series of telephone town hall meetings in which residents can ask questions of company officials without leaving their homes.

Final thought
The same day of the hearing, Sept. 5, the Courier-Journal ran a story with the headline "Bluegrass Pipeline won't cross Sisters of Loretto land, company spokesman says."
In the story, Droege was quoted as saying the pipeline would stay "well north of Marion County."
Curiously, also on Sept. 5, the Bluegrass Pipeline Company LLC filed a document in the Marion County Clerk's Office authorizing James C. Curry to act as their "attorney in fact." That record can be found in Deed Book 298, page 643. (The county clerk?s records are available online at http://www.marioncountykyclerk.com/).
With this power of attorney, Curry has the authority ?to enter into, execute, deliver, file and accept? agreements that grant easements, rights of way, licenses and permits; releases and partial releases of easements and rights of way; and rental and lease agreements.
Maybe this document is just a precaution, but I don't understand why a company that isn't planning to build in Marion County would need to authorize someone to enter into agreements on their behalf.