Georgia DOT Rejects Palmetto Pipeline, Kinder Morgan Responds on Decision
Wednesday, May 20th, 2015
Statement from Commissioner Russell McMurry on Palmetto Pipe Line LLC Application for Certificate of Public Convenience and Necessity
On February 13, 2015, the Georgia DOT received an application from Palmetto Products Pipe Line LLC (Palmetto) requesting a Certificate of Public Convenience and Necessity for a proposed petroleum pipeline that is expected to run from the Augusta, Georgia-South Carolina border to the Brunswick, Georgia-Florida border. The pipeline project would involve the following counties in Georgia: approximately 2 miles in Richmond; 25 miles in Burke; 34 miles in Screven; 39 miles in Effingham; 12 miles in Chatham; 7 miles in Bryan; 18 miles in Liberty; 2 miles in Long; 17 miles in McIntosh; 24 miles in Glynn; 18 miles in Camden; and 12 miles in Charlton.
O.C.G.A. 22-3-83 dictates that “Before exercising the right of eminent domain as authorized in this article, a pipeline company shall first obtain from the commissioner of transportation or the commissioner's designee a certificate of public convenience and necessity that such action by the pipeline company is authorized.”
After careful consideration of information in the application submitted by Kinder Morgan on behalf of Palmetto; numerous public comments submitted at seven (7) public meetings held by Palmetto; two (2) public hearings hosted by the Georgia DOT; and approximately 3000 public comments submitted online and by mail to myself and the Utilities staff, the Department has determined that it will not issue a Certificate of Public Convenience and Necessity. The basis for the decision is outlined in our correspondence to Palmetto Products Pipe Line LLC.
Kinder Morgan, Inc. then announced it received notification that the Georgia Department of Transportation declined its application for a Certificate of Public Convenience and Necessity associated with the proposed Palmetto Pipeline.
“We are disappointed with the outcome of our proceedings with the Georgia DOT. 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,” said McClain.
McClain also noted, “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. We understand and are sensitive to the issues surrounding the potential use of eminent domain, which is rarely used (about 1 percent of land acquisitions on such projects) and which in all cases results in an award to impacted landowners based upon fair market value for access to their property. We also note that approximately 88 percent of the proposed route is co-located next to existing infrastructure – power lines, pipelines, roadways and railways – and that over 80 percent of the landowners potentially impacted by the Palmetto pipeline have already agreed to have their property surveyed. We are also sensitive to environmental concerns which have been raised, 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.”
The proposed Palmetto Pipeline will enable refined petroleum products to be transported from Baton Rouge, Louisiana, Collins and Pascagoula, Mississippi, and Belton, South Carolina, to North Augusta, South Carolina, Savannah, Georgia, and Jacksonville, Florida. The system will have a design capacity of up to 167,000 barrels per day and will consist of a segment of expansion capacity that Palmetto will lease from Plantation Pipe Line Company between Baton Rouge, Louisiana, and Belton, South Carolina. A new 360-mile pipeline from Belton, South Carolina, to Jacksonville, Florida, will also be constructed as part of the system. Kinder Morgan companies have an 80-year history of doing business in Georgia, safely operating more than 3,000 miles of pipelines across 85 Georgia counties, and employing 300 people within the state. When approved, this approximately $1 billion project will generate approximately 1,200 temporary construction jobs, 28 permanent full-time positions, and result in projected revenue to state and local taxing bodies of over $12 million annually.
Pipelines are the safest and most environmentally sound way to transport refined products, and Kinder Morgan’s safety and environmental performance is significantly better than the pipeline industry average. According to recent statistics, 99.999 percent of crude oil and petroleum product barrels delivered by pipeline reach their destination safely. While we do not consider any release to be acceptable, Kinder Morgan’s spill rate is one-third of the industry’s average (6.846 barrels per billion barrel miles over the last three years versus the industry’s average of 23.578 barrels per billion barrel miles). Overall, our operational performance was better than our industry peers in 35 out of 36 environmental, health and safety comparisons in 2014.
