Tuesday, Oct 16, 2018
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Company shifts area ethane pipeline route

Plan aims to avoid contested properties

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    Allen Fore, vice president of Public Affairs at Kinder Morgan, speaking about the company's Utopia East pipeline project at the Rotary Club of Toledo in August, 2016.

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    Wood County Common Pleas Judge Robert Pollex ruled in October that the company behind the Utopia East pipeline project does not have eminent domain rights, throwing a potentially expensive roadblock into the project’s path.

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The pipeline company that plans to ship ethane from eastern Ohio to a chemical company in Windsor, Ont., has appeared to change strategies in the face of landowner objections, shifting the pipeline’s route around contested properties.

Kinder Morgan, North America’s largest energy-infrastructure company, had petitioned Ohio courts in numerous counties to use eminent-domain rights to build its 12-inch Utopia East pipeline across dozens of properties whose owners refused to grant easements. That strategy hit a snag in October, when a Wood County Common Pleas Court judge rejected its eminent-domain rights claim, ruling that the pipeline is not necessary and not for a public use.

That decision put on hold dozens of eminent-domain proceedings scattered throughout the 14 Ohio counties along the planned route, which stretches from the Utica Shale region up to a pipeline in Michigan that leads to Canada. 

The ethane it is to transport would be used solely by NOVA Chemicals Corp., a Canadian firm.

Kinder Morgan had appealed Wood County Common Pleas Judge Robert Pollex’s ruling to the 6th District Court of Appeals, but last week filed a motion to dismiss the appeal. The company said the appeal is moot because it has acquired a route around the properties at issue, and thus no longer needs eminent domain.

When asked whether Kinder Morgan had made minor reroutes or planned a major change, such as purchasing an existing pipeline for its use, Allen Fore, vice president of public affairs, said the company has looked at a variety of options.

“We found a way to avoid these landowners and others and so this is really consistent all along with our philosophy to have mutually agreeable acquisition of land,” he said.

Residents along the pipeline’s proposed path have already seen the rerouting in action.

Norwalk resident Allen Nielsen owns property slightly south in the Huron County village of North Fairfield. A Kinder Morgan representative approached him and several neighbors about 18 months ago offering to buy rights to run the pipeline across their property. They said no.

While several pipeline projects in recent years — both locally and nationally — have prompted protests, legal challenges, and community backlash, often motivated by concerns about how petroleum use may contribute to climate change, Utopia East has generated little public opposition.

And Mr. Nielsen said he’s “not a tree hugger,” though he does believe in conservation. Instead, he was worried about how the pipeline would affect his property value, both because he’d lose a number of trees he sells for lumber, and because of how digging up farmland affects the soil.

Ohio State University’s College of Food, Agricultural, and Environmental Sciences will conduct a study, funded by Kinder Morgan, of pipelines’ effect on cropland productivity. 

The company gave OSU $200,000 for the study.

After repeated offers, and then an eminent-domain threat from Kinder Morgan, the company gave up, and Mr. Nielsen has since noticed stakes along another neighbor’s property marking out a new route.

“Right now, it’s obvious they are going around us,” he said.

Willard resident Rita Bishop is worried how the pipeline could affect her property too. Kinder Morgan visited about two years ago seeking rights to lay about a mile of pipe across the 450-acre farm where she lives with her daughter.

But after an oil company laid a pipeline across part of the property in the past, that section was ruined for crops, Ms. Bishop said, and she and her daughter fear further damage could reduce the price they could fetch if they ran into financial trouble and decided to sell the farm to raise money.

They refused the offer.

“Not a lot of people want to live next to a pipeline,” she said.

Instead of protest camps and town hall meetings, residents in Huron County did what the owners of PDB Farms of Wood County, south of Pemberville, and dozens of others in the area did: They contacted lawyers.

PDB Farms is represented by Andrew Mayle of the Fremont-based Mayle, Ray & Mayle and by Maurice Thompson, a lawyer who also is founder and director of the 1851 Center for Constitutional Law in Columbus.

“The thing that I believe is happening is Maurice and Mayle tied them up in knots,” Mr. Nielsen said.

Mr. Mayle said he and his clients are still considering options on how to respond to Kinder Morgan’s motion to dismiss its appeal. While Wood County clients are happy to be left alone, he said, the pipeline company would face similar legal challenges of land condemnation in other counties.

“It’s not necessarily a moot issue, because we are dealing with those exact same issues in other cases,” he said. “So unless they are going to dismiss any eminent-domain cases they have, the issue is going to come up again.”

Ohio Revised Code Chapter 1723 gives certain private companies power to appropriate private land as long as they follow eminent-domain procedures, which include paying fair market value for seized land. Any taking of property is prohibited “except as necessary and for a public use.”

Among eligible companies are “common carriers,” which can include pipeline companies transporting petroleum products. The concept of common carriers — which offer freight or passenger transportation to the general public — and their use of eminent domain goes back to the railroads. Other kinds of common carriers now included under Ohio law are electric utilities and water companies.

In the meantime, landowners fighting the company in court and others watching the process play out are left wondering what will happen.

“We can either sign with them and have some say in how it’s done and where it goes, or we can resist and take a chance that the court will award them eminent domain,” Ms. Bishop said. “And then they will come, and that won’t be pretty.”

Mr. Fore said the company has acquired 95 percent of the easements it wants, and expects construction activity to begin this month.

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com or 419-724-6086, or on Twitter @NolanRosenkrans.

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