Despite the fact that the proposed Bluegrass Pipeline has been suspended, the companies behind the project are appealing a circuit court decision that found they don’t have the right of eminent domain.
The pipeline would have carried natural gas liquids—like butane, ethane and propane—from drilling operations in the Northeast through Kentucky to processing plants on the Gulf Coast. The NGLs are used in manufacturing materials such as plastics and synthetic rubber, and some Kentucky residents expressed concerns about widespread water contamination if the pipe were to be built and leak.
In May, the companies behind the project announced they were suspending capital investment in the project due to a lack of customer commitments. This was after a number of setbacks, including a ruling from Franklin Circuit Judge Phillip Shepherd that the Bluegrass Pipeline wouldn’t have the power of eminent domain in Kentucky.
Representatives of Bluegrass Pipeline parent company Williams said at the time that the company would seek to use eminent domain only as a last resort, but they believed they had the power under Kentucky law.
Texas Gas Transmission is planning to build a 30 mile natural gas pipeline through Henderson County, Kentucky. Known as the Southern Indiana Market Lateral, it will extend from Texas Gas mainline facilities in southern Henderson to Posey County, Indiana, to serve the new Midwest Fertilizer and SABIC Innovative Plastics plants.
Texas Gas’ parent company, Boardwalk Pipeline Partners, recently faced significant opposition to its natural gas liquid Bluegrass Pipeline. To avoid the opposition they faced over the Bluegrass Pipeline, Boardwalk Vice President of Operations Rick Ashy says Texas Gas will be more proactive in meeting with and providing information to the media and public officials.
“We want to make sure everyone in the community understands the purpose of the pipeline, why it’s being built, what the need is," Ashy said. "We have to live and work in these communities ourselves. We want to be good corporate neighbors.... We have a really good reputation, we feel, with the community, and the communities that our pipeline crosses, including the Mayfield area, we go right through that community. And, we just try to keep a good relationship with the property owners because at the end of the day it’s still their property.”
Texas Gas is working on projects to transport gas from pipelines at Lebanon, Ohio, which carry gas from the Marcellus and Utica shale fields. If completed, the Southern Indiana Market Lateral will transport 166,000 MMBtu, or roughly 166 million cubic feet, per day of natural gas piped from Lebanon.
The CEO of one of the companies behind the Bluegrass Natural Gas Liquids pipeline says a lack of customer interest has led backers to halt the controversial project.
Stan Horton with Boardwalk Pipeline Partners says his company, along with Williams Co., is still having discussions with potential liquid natural gas customers.
“The Bluegrass and Moss Lake projects are not dead. We are no longer funding any capital for those projects, but the joint venture between us and Williams is still in place,” said Horton.
Horton spoke on a conference call with investors Monday morning.
The Bluegrass Pipeline project had drawn heavy opposition from environmental groups and some residents in the path of the project. It also sparked a debate in the state legislature concerning the rights of private companies to use eminent domain.
U.S Army Corps of Engineers documents show that a planned pipeline project in Kentucky would affect more than 750 rivers, streams, wetlands and ponds during construction. The proposed Bluegrass Pipeline would carry natural gas liquids through more than a dozen Kentucky counties on the way to the Gulf of Mexico.
The Courier-Journal obtained a wetlands destruction permit submitted to the Corps of Engineers in December by the pipeline builders. The permit says the construction would require digging trenches through most of the waterways or drilling underneath others, as well as maintaining a 50-foot cleared right of way.
Opponents of the pipeline say construction would do lasting damage to the waterways.
The permit has since been withdrawn and the pipeline's builders have pushed back a proposed construction completion date to the end of 2016.
A Franklin County judge has ruled that Kentucky law doesn’t allow the use of eminent domain for a natural gas liquids pipeline. The move is the latest blow to the controversial Bluegrass Pipeline project.
The Bluegrass Pipeline would carry natural gas liquids across Kentucky to the Gulf of Mexico. The NGLs are used in manufacturing processes, but the project has been controversial because of worries about the project's environmental impact and safety concerns.
A measure to block NGL pipelines from using eminent domain is moving through the state legislature, but the Franklin County ruling adds another legal hurdle to the project. Judge Phillip Shepherd ruled that the pipeline doesn’t fall under the commonwealth’s definition of “public service,” and thus couldn’t use eminent domain.
Tom FitzGerald of the Kentucky Resources Council filed the lawsuit on behalf of several Kentucky landowners.
The Kentucky House of Representatives has passed a bill that would prevent the use of eminent domain in the construction of a proposed natural gas liquids pipeline.
Lawmakers voted 75-16 in support of the measure, which would only allow public utilities regulated by the state Public Service Commission to use eminent domain.
The measure is aimed at the Bluegrass Pipeline, which would carry byproducts from natural gas drilling in the Northeast to the Gulf of Mexico. It's proposed to cross 13 Kentucky counties.
Bardstown Republican David Floyd says the bill doesn't prevent the pipeline from being built, it just protects landowners from corporations.
“The pipeline will proceed," Floyd said. "What we’re trying to do is protect those private property owners, protect those landowners from the big, multi-state, carpet-bagging companies that want to come here and condemn their property without proper provocation.”
A legislative committee has advanced a bill to clarify Kentucky’s eminent domain laws.
If the bill becomes law it would amend Kentucky law to clarify that natural gas liquids pipelines—including the proposed Bluegrass Pipeline—aren’t eligible for eminent domain in the commonwealth.
Legal experts have disagreed as to whether the Bluegrass Pipeline could use eminent domain to obtain easements to carry the byproducts of gas drilling through Central Kentucky. The Judiciary Committee heard rushed testimony from several landowners, but none of the representatives from the laborers’ international union in attendance spoke. The group has previously voiced support for the pipeline.
Representative Johnny Bell of Glasgow spoke directly to those union members when casting his vote.
"Those of you who are up here today to protect your jobs, we all appreciate that," the Barren County Democrat said. "Your job is important to you and it’s important to us, but I feel that a person’s property rights is one of the highest rights that we have in this country, so I vote yes on that and thank you all for being here today."
Now that the bill has cleared committee, it will be up for a vote on the House floor before it goes to the Senate.
One of the companies wanting to build a controversial pipeline to transport natural gas liquids across Kentucky says the project has been delayed up to a year.
In year-end 2013 financial results, Williams Co. President and CEO Alan Armstrong said the in-service target of the Bluegrass Pipeline project was being shifted to mid to late 2016 "to better align with the needs of producers."
The 500-mile pipeline, being built by Williams Co. of Tulsa, OK and Boardwalk Pipeline Partners of Houston, would carry liquids through northern and central Kentucky.
A group of Catholic nuns successfully redirected the route of the pipeline off their land last year and other religious leaders joined them to oppose the project, delivering thousands of signatures to Governor Beshear's office in November.
On Wednesday, Beshear endorsed legislation that would protect landowners from having their land seized for the project. That bill received its first committee hearing in Frankfort Wednesday. It would require private non-utility companies like those responsible for the Bluegrass Pipeline to obtain consent from a landowner before building.
A statewide religious organization is urging Kentucky government to slow down and gather more information on the potential impacts of a proposed natural gas liquids pipeline.
Kentucky Council of Churches Director Marian McClure Taylor says her group wants a more cautious approach taken on the Bluegrass Pipeline, which would connect natural gas producers in Pennsylvania, Ohio, and West Virginia with export centers on the Gulf Coast.
“We don’t want accidents to happen, if they can be prevented,” Taylor said. “We don’t want to be in a situation later where we say you mean you didn’t have your best engineers take a look at the idea of how you were going to re-purpose those pipelines or how they’re going to be constructed or where the pressure stations are going to be.”
One proposed path of the pipeline would extend through northern Kentucky southward into Nelson, Larue, Hardin, Meade and Breckenridge counties.
Opponents of a proposed natural gas liquids pipeline Thursday filed a lawsuit hoping to clarify whether eminent domain could be used for the project.
The Bluegrass Pipeline would carry natural gas liquids from drilling operations in the Northeast to processing plants on the Gulf of Mexico. For the past few months, pipeline company representatives have been approaching landowners, trying to purchase easements for the project. But while the company says it believes it has the power to condemn property if necessary, Kentucky legal experts have disagreed.
Penny Greathouse is a board member of Kentuckians United to Restrain Eminent Domain, the group that filed the lawsuit. She says the uncertainty is a problem for landowners considering whether to sign contracts with the pipeline company.
“I feel like there’s a lot of easements that have been signed because the person themselves have felt like they would rather be on the top end as opposed to on the lower end and they feel like they don’t know if [Williams] can take their property or not, so they’re just going to go ahead and sign, just to be done with it.”
By filing the lawsuit, the pipeline’s opponents are hoping to find out the court’s interpretation of the law before a landowner ends up in court over the matter. They’re hoping for a decision in January.