Eminent domain use for hazardous liquids pipeline challenged | Kentuckians For The Commonwealth

Eminent domain use for hazardous liquids pipeline challenged

The claim by developers of a proposed hazardous liquids pipeline that they have the power of eminent domain was challenged today in Franklin Circuit Court.

The action was taken by Kentuckians United to Restrain Eminent Domain (KURE), a new nonprofit organization formed “to protect Kentuckians from the threat of and attempts to exercise eminent domain by entities not in public service to Kentuckians.”

“The purpose of the lawsuit is to clarify as to whether a private company has the right to condemn land, to force someone to sell them an easement if they don’t want to,” said Penny Greathouse, a Franklin County landowner and founding KURE board member.

"Kentucky families' and farmers' homes and land represent the most important investment in their lives and are the legacy we want to leave to our children,” said Corlia Logsdon, a Woodford County landowner who also has been approached by pipeline developers. “Citizens deserve protection from the threat of condemnation from private companies that are not in service to Kentuckians."

"The guy who talked to me said they did have eminent domain … It’s almost like a bullying tactic.”

Although pipeline developers have not yet tried to condemn any property, landowners say their claim that they have the power under Kentucky law puts unwarranted pressure on them to sell easements.

“I don’t want to be put in a position where I have to make a decision because I’m afraid they are going to take my land,” explained Greathouse, who has a 700-acre cattle farm. “I want to be able to deal with them without that hanging over my head.

“They first called us in April and they said it was a natural gas pipeline. When we found out about the natural gas liquids, we rescinded permission to survey,” Greathouse added. “They still have come back and talked to us four or five times.

“The guy who talked to me said they did have eminent domain. All the public meetings we’ve been to that Bluegrass Pipeline has been involved with, they definitely said they have eminent domain power,” she continued. “We went door to door to talk to our neighbors, and people said they believe the company has eminent domain and can come anyway. It’s almost like a bullying tactic.”

Several lawyers familiar with eminent domain laws in Kentucky, including Attorney General Jack Conway, believe the proposed pipeline project does not qualify for eminent domain authority under Kentucky law. But there has been no definitive ruling by Kentucky courts to clarify state statutes.

The lawsuit asks the court to make such a ruling.

Specifically, the plaintiffs ask the court to, “Determine and declare that Bluegrass Pipeline LLC does not possess any power or authority under the laws of the Commonwealth of Kentucky to utilize eminent domain in support of the proposed Bluegrass NGL Pipeline project …”

“Declaratory relief is appropriate in this case … since the requested declaration of rights will terminate the uncertainty and controversy that exists in this situation,” the lawsuit states. “[A] declaration of rights would afford ‘relief from uncertainty and insecurity with respect to rights, duties and relations’ as between KURE and its members, and Bluegrass Pipeline Company LLC.”

“Many Kentuckians report they are being misled and feel threatened. Some have sold easements at less than what they are worth because of this,” said Logsdon, also a founding KURE board member. “Kentuckians need and deserve protection now because we are facing threats now."

KURE argues that the hazardous liquids pipeline does not qualify for eminent domain because it “is not a public utility regulated by the Kentucky Public Service Commission pursuant to KRS Chapter 278, and thus is not ‘in public service,’” as required in state law.

Additionally, the project would not meet the “public use” and “public consumption” requirements defined in state law.

“The Bluegrass Pipeline project will not be receiving, transporting, or delivering oil or natural gas ‘for public consumption’ as that term is used in the statute, since the transportation of the natural gas liquids is for a limited customer base to which the natural gas liquids will be delivered or sold after being processed by the joint venture in Louisiana, and because the unfractionated natural gas liquids would be transported through the Commonwealth and are not intended to serve or be used by Kentucky consumers,” according to the court filing.

“There is no source of authority under Kentucky law granting eminent domain authority to the Bluegrass Pipeline Company LLC for the proposed Bluegrass NGL Pipeline project.”

KURE is represented by Tom FitzGerald with the Kentucky Resources Council.


Are you aware of Senator Higdon's prefiled bill  14 RS BR 258? Might be of interest.  

There also appears to be incidents of defrauding the public for private gain. Do Kentuckians want to to business w/such an unscrupulous company?

Why is everyone assuming that this pipeline will not be a service to Kentucky?  Just because it isn't initially doesn't mean it won't be.  The products that it's proposed to carry will provide an endless number of locations throughout Kentucky for prospective employers to locate processing and manufacturing facilities.  It's the biggest potential source of new jobs in the history of Kentucky.I am also concerned about the pipeline'a safety.  Anyone who isn't does not have an interest in Kentucky.  I was born here, live here, and will be buried here.  But, I am aware of what this pipeline can provide to us so I have a perspective that is hopeful first and suspicious second.Pipelines can be built to ridiculously safe standards and specifications.  Not all pipelines are the same.  I'm challenging concerned Kentuckians, who like me are very concerned about the future of our homeland, to consider looking at this as a challenge to guarantee safety, not block growth potential.

Hey Rob, can you better explain the potential for processing and manufactering facilities? The company has their own planned processing facility in the works in the Gulf of Mexico, and it will be part of the overall project if it moves forward. They will charge producers for the processing by their own facilities and they are making a huge investment in those facilities. Here's a recent quote from their CEO: "If you just do the math and call it a $0.15 to $0.17 transport rate, a $0.10 to $0.11 frac rate and a nickel export rate, you are a little over $0.30 a gallon on say 50,000 barrel a day commitment from somebody. If you do the math on that, it's over $200 million of commitment on somebody every year for 15 years."In other words, if they allow Kentucky facilities to hook on and take NGLs, they lose their "frac" and "export" rates, which is about half their revenue stream. Perhaps they could make that up through what they charge to KY companies but then the facilities they plan to build in the Gulf would be sitting there with less to process while incurring huge fixed costs.  Also, ethane, about 50% of the NGL barrel, is used to make plastics.  It takes a lof of infrastructure and investment to separarate it from other NGLs.  There is a company in Western KY that will use the ATEX pipeline (which runs through IN), which will carry ethane only, so that they do not have to build their own facility to do the separating. Also, the part about public service, speculation of future use in Kentucky does not constitute public service.  The definition of public service in the law is really what matters here. Here's an excerpt about that definition from the reply memorandum in the eminent domain lawsuit:"The phrasing, context and history of the limitation of the grant of eminent domain power to those pipelines "in public service" strongly suggests that the General Assembly intended by that choice of words to restrict the powers granted under that section to utilities under the jurisdiction of the Public Service Commission (PSC)." Read more about this here:http://www.kyrc.org/webnewspro/139422755537411.shtml The PSC has already indicated that the pipeline will not fall under their jurisdiction.   

Rob, even the pipeline company is not claiming there will be "an endless number of locations" (which is surprising since they are pretty good at misinformation). They have scrambled around to find one company in far western Kentucky that uses one of the pipeline products, and another potential one in central Kentucky. But do you think either of those would build a billion-dollar fracination plant when they need only one of the undifferentiated products that will be running through the pipeline, and there is already a glut of that raw material on the market? There is more profit in exports, and that's what they've been telling their investors all along. And do we want to encourage Kentucky manufacturers to buy NGL products from Pennsylvania and undercut the market for Kentucky NGL producers?

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