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For Land TrustsFor Land Trusts

Court Throws Lifeline to Pipeline Opposition

Source: 
Land Trust Alliance
Author: 
Lorri Barrett

Kentucky land trusts had a big win in court when an appeals court found that Bluegrass Pipeline developers cannot use the power of eminent domain to acquire pipeline easements. The court said that the developer is not regulated and that the pipeline does not serve the people of Kentucky. 

In Bluegrass Pipeline Co., LLC v. Kentuckians United to Restrain Eminent Domain, No. 2014-CA-000517 (May 22, 2015), the Commonwealth of Kentucky Court of Appeals upheld a ruling by the Circuit Court. The Circuit Court had found that the pipeline “seeks to benefit from the rights conferred on regulated utilities … without subjecting itself to the responsibilities, duties and regulatory oversight imposed by those statutes.”  The court of Appeals agreed, stating “the legislature only intended to delegate the state’s power of eminent domain to those companies that are, or will be, regulated by the PSC.” 

The attorney for Kentuckians United believes the ruling is broad enough to apply to another controversial pipeline, the proposed re-purposing of Kinder Morgan's existing Tennessee Gas pipeline. The re-purposed pipeline would also carry hazardous natural gas liquids through Kentucky from fracking zones in Ohio and Pennsylvania to the Gulf Coast. Most of that pipeline is already built, but the company has stated it may need to acquire workspace or other easements for the transition.

The Court of Appeals concluded that the pipeline company did not have eminent domain power because it was not regulated by the Public Service Commission and therefore was not "in public service" as required by Kentucky eminent domain statutes. This broad ruling takes a big advantage away from natural gas companies seeking to acquire easements for pipeline projects. Bluegrass Pipeline has 30 days from the last order to appeal to the Kentucky Supreme Court. See Ky. Rev. Stat. § 278.502.

Land trusts in other states might take note of this case on a few points. Always check very early to determine if the entity that says it is building a pipe line or power line actually has eminent domain authority. These days many do not. Second, push the company to prove that they really have customers waiting for the energy; many push to build these speculatively and the prolonged decline in prices is dropping customer demand. Third, understand your state regulatory environment. That is absolutely critical.

More Information

Because the controversy over pipelines and other energy infrastructure has become so complex and pervasive, the Land Trust Alliance has created a forum on The Learning Center for members (at the $250 level and above) to discuss their experiences and share news. There is also a collection of materials, including news, court opinions and much more, available on The Learning Center.

 

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