Oil and gas boom fuels increase in pipelines and eminent domain fights www.ajc.com
Moreland — The nation’s oil and gas boom brings cheaper fuel, and real heartache, to thousands of Georgia families who benefit from, or suffer alongside, the thousands of miles of pipelines coursing through the state.
Diane Thomas stands to lose 3.4 acres of tall trees that form an environmentally rich buffer between Godzilla-sized power pylons and her horse farm in Coweta County. One recent morning, after 8 inches of rain, the heavy smell of wet wood and loamy soil proved intoxicating. Tall pines, live oak and sweet gum blocked the sun.
Orange survey ribbons foreshadowed the changes to come.
“My horses enjoy meditating here as much as I do. Sometimes we’ll just stand here and stare,” said Thomas, overlooking a swollen creek. “But we won’t be able to ride this trail once they take down the trees.”
Atlanta Gas Light plans a 17.5-mile pipeline through central Coweta and, Thomas knows, little can be done to stop it. The courts and the Legislature have given Georgia pipeline companies near-carte blanche, via eminent domain, to take private property.
AGL has laid 33,000 miles of pipelines across Georgia. It’s adding nearly 50 miles of pipe in Coweta, Forsyth, northern Gwinnett and Hall counties. The distribution company and an Oklahoma firm are also lining up easements for a 111-mile line from Coweta to Dalton along metro Atlanta’s western flank.
“A lot of areas in Georgia have traditionally been underserved and not had the opportunity to get natural gas,” AGL spokeswoman Kristie Benson said. “We can accommodate areas that are growing by putting pipelines in the ground.”
A Texas builder is tussling with southwest Georgia landowners and local officials over a 157-mile pipeline that would deliver gas to North Florida utilities. Shell Oil and Kinder Morgan, an oil infrastructure company, are petitioning the feds to reverse the flow of a gas pipeline between Atlanta and Savannah so they can export to Europe.
Kinder Morgan also wants to shoot oil, propane and gas down the proposed Palmetto Pipeline from South Carolina through Augusta and Savannah to Jacksonville, Fla. Georgia officials, though, denied a permit last month. An appeal is likely. To succeed, Kinder Morgan will have to show that the pipeline is a “public necessity,” a relatively easy threshold to overcome.
“The public-use doctrine is being twisted and abused by many companies proposing to build these pipelines that are really not for a public purpose, but for a private profit,” said Steve Caley, the interim director of Atlanta-based GreenLaw, an environmental nonprofit. “There needs to be a change in the law to further circumscribe the use of eminent domain.”
AGL says its pipelines serve public and a private purposes and are fully sanctioned by the state’s Public Service Commission.
“We go through a very lengthy process. We look at different routes,” Benson said.
“We do our due diligence to make sure we’ve selected the best route based on certain criteria.”
Decisions hinge on ‘public necessity’
Diane and husband Alan Thomas quit Sandy Springs for a bucolic corner of Coweta in the late 1980s and transformed 200 acres of timber and bramble into Merichase horse farm. They built a log home, stable, barns, two ponds and riding trails through the woods.
In 1996, the gold-winning German dressage and show-jumping teams trained there before the Summer Olympics. A decade later, the Thomases granted the Georgia Transmission Corp. a 5-acre easement to build a towering power line along the farm’s eastern edge. In return, they received $55,000.
AGL now wants to widen the right of way by permanently taking a 55-foot-wide swath of trees from the Thomases’ farm. A temporary construction easement would gobble an additional 20-foot strip, though the Thomases can replant trees once the line is laid. An independent appraiser suggested $11,000 for the property and the trees. AGL offered $12,000 — an amount the Thomases consider absurdly small.
The pipeline isn’t the only threat to Merichase’s tranquility. Nearly 140,000 people live in Coweta County, a 50 percent surge since 2000. Halfway between Atlanta and LaGrange, Coweta attracts manufacturers and homeowners looking for reasonable prices and proximity to Hartsfield-Jackson International Airport.
I-85 sits within two miles of the horse farm. A 1,000-acre “mega-site,” pitched to Volvo and other carmakers, is even closer.
“The demand is there,” AGL’s Benson said. “And we’ve gone to the Public Service Commission and demonstrated that demand and they authorized (the project). This is for the community, not one specific customer.”
Benson wouldn’t say whether Coweta County, the city of Newnan or the local development authority requested a natural gas pipeline to handle future growth. All that’s needed is for the PSC to agree that a proposed project is a “public necessity.”
“The power companies, railroads or pipeline companies, under Georgia’s system, exclusively decide what is public use,” said Harry Camp, a Cartersville attorney who represents property owners, including the Thomases, in eminent domain cases. “It’s a real uphill battle for Georgia landowners to make a showing that it’s not really in the public interest to have that project.”
AGL gained the PSC’s approval for the Coweta project in 2013. In addition to the expected demand from new customers, AGL’s website states its “obligation to provide enough to serve them on the coldest days of the year.”
Ruling, laws reshaped eminent domain
In 1941, as World War II heated up, Congress granted pipeline companies the right to condemn property for the nation’s defense. It wasn’t until a half century later, when a pipeline burst in a pecan grove owned by a Georgia legislator, that state officials decided to revisit the power given pipeline companies. Anti-pipeline pressure grew a couple of years later when a planned South Georgia gas line drew the ire of well-connected plantation owners.
The General Assembly placed a yearlong moratorium on pipeline companies’ ability to use eminent domain. A compromise required builders to petition the Department of Transportation for a “certificate of need” and the Environmental Protection Division for a permit.
In 2005, with the so-called Kelo decision, the U.S. Supreme Court granted local or state governments the right to use eminent domain to take private property for economic development. Previously, eminent domain was reserved for projects considered beneficial to the public as a whole.
Georgia and 40 other states passed laws tightening the use of eminent domain for economic development. The so-called Landowners’ Bill of Rights requires pipeline companies considering a piece of property to offer a fair appraisal for the land, explain how they settled on the amount and notify the landowner before beginning condemnation.
“They made some attempt to make the process a little more transparent, but it really didn’t do much,” Camp said. “There’s a lot more to be done that would meaningfully help property owners defend their rights.”
It’s easier to halt an interstate pipeline, due to federal and state rules, than a local one. The Georgia Department of Transportation last month denied Kinder Morgan’s request to build the 210-mile Palmetto Pipeline from South Carolina through east Georgia and into Florida.
“There is substantial evidence showing that the pipeline would not constitute a public convenience and necessity,” the transportation commissioner wrote.
‘The door is not closed’
Alan Thomas, a former BellSouth executive, knows AGL holds the upper hand.
“They can come in here and take the land and dictate the price as well and the landowner is powerless,” he said over a lunch of pork barbecue and homemade apple pie. “We realize the chance of winning eminent domain is remote. Any shot we’ve got is with a jury realizing what’s really going on.”
The Thomases are willing to compromise. They’d like, first off, for AGL to run the pipeline on the existing easement. (AGL says the pipeline can’t run directly alongside the power line due to safety, maintenance and future routing issues.) But if the trees must come down, then they want to be adequately compensated for their loss.
They’ve requested $50,000 for the trees and $450,000 in so-called consequential damages — future economic loss due to the reduced value of the tree-less property and the power-line eyesore that would lower the farm’s overall marketability.
“They can’t make Diane happy; they can only make her willing to give up this fight,” Alan Thomas said. “So give us a proper price for our land, an amount to invest that can be expected to grow and make up for the potential value of the loss of the land. Eminent domain is a tremendous sacrifice.”
The Thomases will likely go to court where a “special master” will decide compensation. If the Thomases remain dissatisfied, they can request a jury trial to determine, ultimately, how much AGL will pay for their land.
“We try to offer fair-market value,” AGL’s Benson said, adding that 70 percent of the pipeline’s right of way through Coweta County has been acquired. “But it’s in negotiations and the door is not closed, so we’ll continue to work with them.”