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Judge rejects Palmetto Pipeline appeal

ATLANTA — The Texas-based energy company planning to build a 210-mile pipeline through east Georgia suffered a setback in court Tuesday when a judge rejected its appeal of a state decision to deny the pipeline developer the right of eminent domain.

Attorneys for Kinder Morgan had asked a Fulton County Superior Court judge to overturn state Transportation Commissioner Russell McMurry’s denial last May of the company’s application for the power to seize property from owners unwilling to sell. The so-called eminent-domain authority allows utilities to avoid costly detours by requiring a judge to set a fair price for rights-of-way across the seized property.

Kinder Morgan has said it plans to invest $1 billion in what it calls the Palmetto Pipeline, which would carry up to 7 million gallons of gasoline, diesel and ethanol a day from Belton, S.C., to Jacksonville. Its route through Georgia parallels the Savannah River and then turns south, crossing every coastal county and five major rivers.

Judge Kimberly M. Esmonds Adams issued her decision Tuesday, ruling against the pipeline company.

“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, this court finds that the commissioner’s decision is adequately supported by the record evidence and therefore affirms the decision of the commissioner and denies Palmetto’s petition for review,” she wrote in a court order signed Monday.

Also on Monday, the House of Representatives voted 165-2 in support of a bill designed to stall the pipeline by imposing a moratorium until July 2017, while new procedures are written.

 

Ruling reactions

News of Judge Adams’ decision broke so fast that even one of the attorneys involved hadn’t heard about it when called by a reporter Tuesday morning.

“I haven’t seen anything about it,” said Hugh McNatt, lawyer for a group of landowners siding with McMurry, including William S. Morris, III, owner of the Savannah Morning News.

But Steve McWilliams, a lobbyist for the newly formed Landowners for Property Rights, had seen it and was pleased that the court concluded the likely benefits of a pipeline would not be enough to justify using force against landholders.

“We’re delighted that Judge Adams has rendered a decision that is consistent with what the private property owners’ community has been saying all along,” he said.

A statement issued by Kinder Morgan indicated the firm was disappointed but not surprised.

“We realized this outcome was a possibility given deference which the court was required to give to the decision of the Georgia DOT, and we are currently reviewing the decision, its ramifications and our options,” the statement read.

Over the past several months, the statement read, the firm has been working with landowners and others to address concerns and review recommendations with the goal of building the pipeline “to the satisfaction of all stakeholders.”

“We’re pleased with the progress we have made to date, and we are encouraged by the constructive feedback we are hearing from stakeholders regarding the project,” the statement read.

Environmentalists said they were happy with the judge’s decision and recent action in the Georgia and South Carolina legislatures to erect more hurdles to petroleum-pipeline construction.

“It’s incredibly encouraging that both Georgia and South Carolina are clearly listening to the people and standing up and protecting private-property rights,” said Tonya Bonitatibus with the Savannah Riverkeeper, an Augusta-based advocacy organization. “I think that it’s been clear all along neither necessity nor convenience exists in this situation.”

Kinder Morgan lobbyists didn’t publicly oppose the Georgia legislation. Instead, company officials have repeatedly said the pipeline would be built even if it couldn’t use eminent domain.

“If that is true and they really believe that, there is no reason for them to appeal,” said Steve Caley, legal director for GreenLaw, an Atlanta-based legal advocate for environmental causes.

Kinder Morgan could next appeal to a higher court. A final ruling by the Georgia Court of Appeals could be years away.

 

The arguments

The company argues that delivering gasoline and diesel fuel through a pipeline would be inherently safer and cheaper than delivering it to Savannah by ship or by trucking it from terminals in Augusta and Macon. But because Kinder Morgan won’t own the material it transports, it has refused to guarantee a savings to motorists.

McMurry rejected that argument. He concluded that the Savannah market was already adequately supplied by competing firms and that demand is gradually declining as vehicles become more efficient, meaning there was no public necessity for a new source.

Adams found no problem with his reasoning.

“The commissioner’s decision is supported by substantial evidence,” she wrote.

She also dismissed Kinder Morgan’s complaints of procedural errors that McMurry was not following precedent and was preventing the company from responding to public comments opposing the project and extending the deadline for public comments.

Gov. Nathan Deal said the judge showed McMurry did things correctly.

“I am pleased that Fulton County Superior Court Judge Kimberly Adams has confirmed Commissioner McMurry’s initial decision,” he said.

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