Energy giant encounters another roadblock in quest to build pipeline

Back in May, our blog discussed how Texas-based energy giant Kinder Morgan ran into a considerable setback in its attempts to build the Palmetto Pipeline, a proposed 200-plus mile petroleum pipeline, which would travel across Georgia and into northern Florida.

To recap, Kinder Morgan asked the Georgia Department of Transportation to issue a certificate granting it the power to use eminent domain to secure private land for the project, something expressly authorized by state law. However, the state Transportation Commissioner declined to issue the certificate, finding that the proposed pipeline was not a “public convenience and necessity.”

Not surprisingly, Kinder Morgan appealed the decision to deny it eminent domain authority.

In a decision released earlier this week, however, the presiding administrative law judge affirmed the decision of the Transportation Commissioner to deny the certificate, holding that the energy company had failed to present sufficient evidence showing that it was a public convenience and necessity.

“Having concluded that the record does support the commissioner’s decision, and in the absence of any proffer by Palmetto as to how some different procedure or additional evidence would have changed the commissioner’s decision, the court finds the record adequately supports [the Transportation Commissioner’s] decision,” reads the order.

As if this wasn’t interesting enough, the Georgia House of Representatives passed House Bill 1036 by a vote of 165-2 on the very same day as this decision was handed down.

The legislation, which is now being considered by the state Senate, calls for the imposition of a moratorium on any and all use of the eminent domain authority to secure land for pipelines until July 2017. During this time, a 13-person commission would examine the adequacy of the current law and make recommendations prior to the lifting of the freeze.

Most are anticipating that Kinder Morgan will appeal the ALJ’s decision to the Georgia Supreme Court, a process that could take years and, as such, see the state legislature impose new standards relating to the exercise of eminent domain during the pendency of the appeal. Experts indicate that if this does indeed happen, Kinder Morgan will argue that the standards in place at the time of its filing of the initial application for eminent domain authority should govern.

Stay tuned for updates on this fascinating case …

If you have any questions regarding the state’s use of eminent domain powers, please consider speaking with an experienced legal professional to learn more about your rights and the law.