South Carolina joins Georgia in ruling against use of condemnation to build Palmetto Pipelinehttp://www.kindermorgan.com/content/docs/PalmettoProjectMap.pdf
By David Pendered
A legal opinion issued by the office of South Carolina’s attorney general presents a new obstacle for a proposed pipeline for petroleum and ethanol to be built along the Savannah River and down the Georgia coast, to Jacksonville, Fla.
The opinion contends that Kinder Morgan, Inc. does not have the power to condemn land for the purpose of installing the Palmetto Pipeline. If the pipe were to carry natural gas, the company could condemn property. But a petroleum pipeline doesn’t have the same legal standing as a gas pipeline, according to the opinion.
Through the opinion, South Carolina joins Georgia in rejecting Kinder Morgan’s ability to condemn land, if necessary, to build the 360-mile pipeline. The company contends that condemnation typically is used to acquire about 1 percent of necessary land acquisitions.
Kinder Morgan has appealed the Georgia ruling, by state Transportation Commissioner Russell McMurray. The company is expected to defend its ability to condemn land in South Carolina, if challenged in court.
The South Carolina opinion relies on laws that go back to the state’s efforts to develop a textiles industry after World War II.
In 1950, South Carolina’s legislature enacted a law that extended the state’s power of eminent domain to gas companies. Electrical companies already had condemnation powers, and the law extended the law to include natural gas in order to provide fuel for textile plants, according to the ruling.
- “The historical context for the Bill’s passage in 1950 was the post-War beginning of industrialization in South Carolina. The demand for natural gas to power the textile industry’s growth and expansion, as well as the strong demand for natural gas by other businesses throughout the State, was a major factor in the statute’s enactment. Indeed, in 1952, our Supreme Court concluded that natural gas companies, as a source of power, were equivalent to electric power companies in their legal status – providing a ‘public’ and ‘governmental’ service.”
The opinion concludes:
- “In summary, no South Carolina court to date, of which we are aware, has construed [state law] as bestowing the power of eminent domain upon an oil pipeline company. We are also unaware that our courts have deemed oil pipelines as ‘utilities’ in contrast to natural gas pipelines.
- “While we readily admit that Kinder Morgan can plausibly argue that [state law] 58-7-10 has a plain meaning, for the foregoing reasons, we still have substantial doubt that the statute gives an oil pipeline company such powers. We suggest, before moving forward, legislative clarification, or a definitive ruling by the courts that property can be condemned in South Carolina by an oil pipeline.”
The opinion was released July 1 and signed by South Carolina’s solicitor general, Robert Cook. Cook was named the state’s first solicitor general in 2013. The position is charged with developing legal policies and navigating constitutional questions, according to a statement released by South Carolina Attorney General Alan Wilson. Cook joined the state AG’s office in 1977.
The ruling responded to a request filed by the Aiken County legislative delegation. The five members represent the area of North Augusta, which is where the proposed pipeline would cross the state line from South Caroline into Georgia.
Kinder Morgan has not issued a statement regarding the South Caroline ruling.
In a statement released after the GDOT ruling, Kinder Morgan Products Pipelines President Ron McClain said:
- “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. … We appreciate the feedback we have heard to date on the project, as we heard numerous comments and questions. 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.”
The proposed $1 billion Palmetto Project would begin near Belton, S.C., where it would link to an existing pipeline that stretches from Baton Rouge, La. to near Washington, D.C.
From Belton, the proposed pipeline would be built along the Savannah River corridor to Savannah. From there it would pass through the watersheds of five rivers as it reaches the Brunswick area, continuing to a stopping point near Jacksonville.
The fuel it transports, up to 167,000 barrels a day, would serve consumers who now have limited access to fuel, according to pipeline developer Kinder Morgan. The Palmetto Project would provide Savannah and Jacksonville with their first major pipeline source, supplementing fuel brought in by ship. North Augusta would benefit from additional pipeline capacity.