Kentucky lawmakers are weighing whether to take any action to regulate a proposed natural gas liquids pipeline that could cross the state. A joint legislative committee heard from both proponents and opponents of the Bluegrass Pipeline on Thursday.
The proposed project could cross more than a dozen Central Kentucky counties, transporting natural gas liquids from drilling operations in the Northeast to processing plants in the Gulf of Mexico. It’s been touted as a way to increase the country’s energy independence and encourage manufacturing, but many landowners are worried about possible environmental contamination and safety issues.
During the meeting, the pipeline’s developers have stressed the economic benefits they say the project would bring to the Commonwealth, including $136 million in new taxes over the next decade. Because building the pipeline will give natural gas drillers extra income from the sale of the natural gas liquids, Williams Company Senior Vice President Jim Scheel told lawmakers the pipeline will help keep gas prices low.
“As well as the amount of NGLs coming, we also want to bring affordable natural gas,” he said. “What this pipeline does will help unlock those northeast resources of natural gas and continue to provide low-cost gas to the Commonwealth of Kentucky.”
But questions were also raised about the project’s potential environmental footprint. Many landowners worry that a leak in an ecologically sensitive area would prove devastating. Unlike a natural gas pipeline, natural gas liquids pipelines don’t require any approval from the Public Service Commission, or review of the route. Tom FitzGerald of the Kentucky Resources Council suggested that lawmakers should quickly take action to clarify the regulations that apply to the project.
And then there’s the issue of eminent domain.
During the meeting, lawmakers expressed concern about the possibility that the pipeline company could invoke eminent domain to take land when there’s no agreement with landowners. But whether that’s possible is still unclear. Representatives from Williams say they believe they have the legal ability to use eminent domain, though that would be a last resort. But the Kentucky Attorney General and others in the Commonwealth disagree.
FitzGerald said he doesn’t think Williams has the power of eminent domain, but the confusion could influence how landowners deal with pipeline representatives.
“Because the problem is that as long as that threat is out there–and you’ve heard the Williams representative indicate they believe they have the power–unless this General Assembly is going to take action, we run the risk that landowners will be out there, feeling the implied and not-so-implied threat of condemnation,” he said.
FitzGerald told the legislators the issue should be clarified by the General Assembly, preferably in a special session, but at the very least during next year’s regular session.
The Williams Company hopes to have the Bluegrass Pipeline in service by late 2015.