Eminent Domain Protested For Proposed Pipeline

Sep 5, 2013

FRANKFORT, Ky. -- A private company that wants to build a pipeline to carry natural gas liquids across Kentucky can't use eminent domain to obtain the right of way, a ranking state official said Thursday.

Kentucky Energy Secretary Len Peters told a legislative committee that his legal staff, after careful analysis, reached that conclusion regarding the proposed Bluegrass Pipeline project, which he described as "one of the most difficult and controversial issues that we have faced in the commonwealth in quite some time."

"Based on this research, relative to federal law and statutes and how natural gas liquid pipelines are regulated, they do not see how eminent domain can be invoked," Peters said.

The position differs from that of company executives who insisted Thursday that the companies do have authority to use eminent domain to obtain right of way if landowners are unwilling to cooperate.

The Bluegrass Pipeline, being built by Williams Co. of Oklahoma and Boardwalk Pipeline Partners of Texas, would cross northern and central Kentucky, carrying a liquid byproduct of the natural gas refining process that's used to make plastics, medical supplies and carpet, among other products.

Land owners and environmental activists have fought furiously against the pipeline, citing concerns about potential leaks.

The Bluegrass Pipeline controversy is an extension of an environmental debate raging in several states over fracking, a process in which water and sand are injected into underground shale to push out oil and gas. The flammable liquids that would travel through the Kentucky pipeline would come from fracking sites in the Marcellus and Utica shale gas areas in Ohio, Pennsylvania and West Virginia.

Boardwalk general counsel Mike McMahon said the companies "have not landed on a precise route" for the pipeline in Kentucky, though he said work is under way to do that.

"We are very, very early in the process," he told the Joint Committee on Natural Resources and Environment.

McMahon insisted that the companies do have eminent domain authority under Kentucky law, but he said it won't have to be exercised on a widespread basis. He predicted that the companies will be able to negotiate agreements with some 98 to 99 percent of landowners for the purchase of right of way.

"But there are rare occasions, usually less than 2 percent of the landowners we come across after we finalize the route, that we have to exercise eminent domain," he said.

A group of Catholic nuns are among those who object to the proposed pipeline, prompting a company spokesman to announce Wednesday that the route would stay north of the Sisters of Loretto's 780-acre property in Marion County. The nuns earlier this year had refused to let surveyors onto their property because they oppose construction of the proposed 500-mile pipeline that would connect to an existing transmission line that runs from Kentucky to the Gulf of Mexico.

"We have received numerous letters and emails from concerned citizens basically asking us, the Energy and Environment Cabinet, to intervene to stop this proposed project," Peters told lawmakers. "We've responded to each and every one of these letters that we do not have the authority."

If built, the proposed pipeline would be one of several that already crisscross Kentucky.

Jim Scheel, a senior vice president for Williams, said eminent domain would be a last resort in the process to plot the most economical and environmentally friendly route across the state.

"We're not here to come in and take people's property," Scheel said. "That is not the intention of this."