State Transportation Commissioner Russell McMurry decided not to grant a certificate of public convenience to Kinder Morgan for a 380-mile gasoline pipeline, denying the company the ability to exercise eminent domain for the project.
McMurry’s decision was handed down Tuesday and welcomed by those aligned against the Palmetto Pipeline, hundreds of whom voiced their opposition in a series of public hearings and meetings across eastern and southeast Georgia.
“While I am happy that Kinder Morgan will have to spend more money to acquire their path through Georgia,” said local environmental activist Claudia Collier of Guyton. “I will have to see more legal arguments now to decide what chance it has of being denied by a judge.”
McMurry, in a release said that “after careful consideration of information in the application submitted by Kinder Morgan on behalf of Palmetto; numerous public comments submitted at seven public meetings held by Palmetto; two public hearings hosted by the Georgia DOT; and approximately 3,000 public comments submitted online and by mail to myself and the Utilities staff, the department has determined it will not issue” the certificate.
The Palmetto Pipeline is designed to run from Belton, S.C., to Jacksonville, Fla., traversing 12 Georgia counties for a total of 210 miles. Of that, the longest stretch was through Effingham County, approximately 39 miles.
Kinder Morgan representatives have said in multiple public venues that the pipeline represents a $1 billion investment and could have resulted in 1,200 construction jobs. At full capacity, it was designed to carry 167,000 barrels of fuel each day.
But residents and local lawmakers bristled at the company’s capability to exercise eminent domain to take land for the pipeline route and environmental activists questioned the safety of the pipeline, particularly since it was projected to cross five waterways.
In his letter to Kinder Morgan explaining his decision to turn down their application, McMurry said state law requires him to determine if the project should be allowed to use the powers of condemnation to acquire land needed for the pipeline.
“In this instance, my conclusion is that there is substantial evidence that the construction of the proposed pipeline will not constitute a public convenience and necessity,” he said.
McMurry said he was not making any determinations as to the project’s importance.
“I also recognize that, despite the public objections of many who are opposed to the project, there are also a number of individuals who are very much in support of the project,” the commissioner said.
Kinder Morgan officials expressed their disappointment in the commissioner’s decision.
“We believe that we have more than adequately demonstrated that this project is in the best interests of Georgia’s consumers, as it will result in lower costs and provide safer transportation of refined petroleum products to many areas in the Southeast, including specifically many communities in Georgia,” said Kinder Morgan Products Pipelines President Ron McClain.
“The fact the proposed pipeline is fully supported by long-term commitments from multiple customers seeking safer and more efficient supply options, and that it was so vehemently opposed by certain existing refined petroleum suppliers with vested economic interests in maintaining the status quo of artificially higher prices, is itself compelling evidence that the pipeline will serve needs that are not being met by current supply options. We continue to believe in the viability of the project and its economic benefits to the Southeast region and Georgia in particular, and we plan to pursue all available options to move forward with the project.”
McMurry also countered the company’s assertion that the pipeline will increase competition and therefore could lower fuel prices in the area. He also challenged the company’s claim it would boost future fuel supplies for the area.
“The evidence reflects an overall downward trend in fuel consumption and the idea that the pipeline is needed to address current and future increased demands is simply not supported,” the commissioner said. “In addition to there being little evidence of increasing demand, there also is no evidence that the pipeline would serve to reduce the price of fuel in the region.”
McMurry also pointed to Kinder Morgan’s admission that it does not control own the product to be carried in the pipeline and cannot set the price at the pump.
“Representatives from Palmetto explained at the public information meetings and public hearings that their company would have no control over the ultimate price consumers would pay at the pump for gasoline,” he said. “Thus, one cannot assume that the mere presence of the pipeline will affect prices in the region.”
The commissioner also challenged the proposition that the pipeline would lead to increased competition in the market. He pointed out that the majority of petroleum in the region is trucked out of Macon and North Augusta, S.C.
“There is no apparent lack of competition in either market,” McMurry said. “It is generally known that both markets are served by multiple petroleum suppliers and Savannah has two competing ocean terminal petroleum suppliers in the area. There is no reason to believe nor is there any evidence that the presence of the pipeline in the market alone will affect prices in the region.”
While Kinder Morgan officials have said they intend to use existing easements for most of the route, their capacity to exercise eminent domain for the remainder rankled scores of residents. McClain noted that condemnation is “rarely used,” exercised in only about 1 percent of the land acquisitions for projects. In those instances, landowners received fair market value, he added.
McClain said that about 88 percent of the proposed route would be co-located next to existing easements and rights-of-way for power lines, railways, roads and other pipelines. He also said more than 80 percent of landowners who could be affected by pipeline have agreed to have their property surveyed.
“We appreciate the feedback we have heard to date on the project, as we heard numerous comments and questions,” he said. “We will continue efforts to foster an open dialogue with communities and landowners along the proposed pipeline rights-of-way and share information about the project to address concerns. We understand and are sensitive to the issues surrounding the potential use of eminent domain.
“We are also sensitive to environmental concerns which have been raised,” McClain continued, “and note that a number of federal and state agencies will be involved in the approval and oversight of the project to ensure protection of the environment, including the U.S. Army Corps of Engineers and the Georgia Department of Natural Resources. We will continue to work to reach mutually beneficial agreements with landowners, and to cooperate with applicable agencies and other stakeholders in order to minimize or eliminate potential environmental impacts.”
McMurry said in hs letter to Kinder Morgan explaining his refusal, he had “given a great deal of thought and consideration to the information that has been provided to the department in this process, as well as to the level of authority given to me by the governing statute in making this decision. Finally, I have given significant consideration to the voluminous information submitted by Palmetto, and by interested individuals and groups.”
In a Monday interview with the Statesboro Herald, Kinder Morgan Vice President of Public Affairs Allen Fore said the company will proceed with other permitting applications and indicated the company would appeal if McMurry denied the certificate. The law allows for an appeal to a county superior court.