LOUISVILLE, Ky. (WDRB) -- A judge ruled Tuesday that the proposed Bluegrass Pipeline can't seize land from private property owners under Kentucky's eminent domain laws -- a decision the project's developers said they will appeal.
Franklin Circuit Judge Phillip J. Shepherd's order is the second blow in as many weeks to the pipeline's prospects for condemning land. The Kentucky House passed a bill last week banning eminent domain for pipelines carrying natural gas liquids.
Kentuckians United to Restrain Eminent Domain filed a lawsuit in December, asking for a ruling on whether the pipeline's developers could use eminent domain. Penny Greathouse, a property owner in the pipeline's path, said in court documents that knowing whether condemnation is legal would affect her negotiations.
In a 17-page ruling, Shepherd noted that pipeline officials' claim of eminent domain has a "real and immediate bargaining impact" on landowners, who must factor in the cost of challenging the developers' belief that they can ultimately condemn land if negotiations break down.
"Bluegrass seeks to obtain voluntary easements, but invokes the threat of condemnation," Shepherd wrote. "This has an inevitable chilling effect on landowners who may question the legal authority of Bluegrass, but who lack the means to engage in protracted litigation to resolve the legal dispute."
The Bluegrass Pipeline would transport natural gas liquids -- naturally occurring substances found in natural gas -- for use in plastics, automotive fuels and other products. They are classified as hazardous materials under federal rules.
Kentucky, where plans call for roughly 275 miles of new or repurposed line, would be the midpoint of a route stretching from natural gas fields in the northeast to the Gulf Coast.
Houston-based Boardwalk Pipeline Partners L.P. and the Williams Cos. of Tulsa, Okla., argue that the pipeline will create temporary construction and permanent monitoring jobs in Kentucky, help the United States become more energy independent and allow access to local businesses that use natural gas liquids.
"While we disagree with today's ruling by the Franklin Circuit Court and plan to immediately appeal the decision, we continue to purchase easements through face-to-face negotiations with individual landowners, a successful process whereby we've acquired nearly 70 percent of the route needed in Kentucky," Tom Droege, a Williams spokesman, said in a statement.
Condemnation is allowed under Kentucky law when land is taken for a public use, such as a highway project or a gas line operated by a public utility. But whether it applies to the Bluegrass Pipeline, a joint venture of two private companies, is a more complicated matter.
Attorneys for the pipeline indicated during arguments before Shepherd that the project's path has been altered more than 100 times to address property owners' concerns, according to court documents.
For her part, Greathouse called Shepherd's ruling "wonderful."
"It's a good thing to hear," she said. "I'm certainly glad people who have paid money and own their property actually do own their property."
Shepherd ruled that the pipeline isn't acting in a "public service" and won't have any impact on Kentuckians' energy needs. Instead, he wrote, the project will transport the substances through the state en route to processing plants in Louisiana.
He concluded that "the transportation of hazardous liquids interstate through Kentucky to the Gulf Coast does not justify granting a private company the right to condemn private property."
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