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Jan. 24 - Palmetto Pipeline may face additional two-year delay, based on Joint Study Committee report

Category: Manufacturing

by Lou Phelps, Savannah Business Journal

January 24, 2017 -  The Joint Study Committee, Chaired by Sen. Rick Jeffares, and Co-Chairs Sen. Jack Hill and Sen. Frank Ginn, released its report today on the study of oil and gasoline pipelines in Georgia.  State Rep. Bill Hitchens, from the Chatham County Delegation, also serves on the committee as a Co-Chair.  A series of public hearings and fact-finding events were held across Georgia in 2016. (See related Pipeline stories.)

The conclusion of the study is: more study is needed.

And that addition study needs to include a review of language in current legislation that affects and controls the process of building fuel pipelines in Georgia.

Sources close to the committee report that some of the Senate members on the Committee are in support of pipelines, even in the Coastal Georgia region, as “the safest way” to transport fuel -  versus by trucks or ships - but face strong opposition from members from the House side.  There are currently two major fuel pipelines serving the Metro Atlanta area. 

The study committee members agreed to recommend that the Georgia General Assembly extend the current moratorium on oil and gasoline pipeline construction in Georgia for another two years to allow for more study.

The moratorium, passed during the 2015-2016 session,  and is set to expire June 30.  The bill creating the temporary moratorium also established the joint House and Senate study committee. 

A percentage of those opposed to a new pipeline in Georgia focused their opposition on the use of eminent domain; there was also a large percentage that raised possible environmental concerns.

But, pro-pipeline advocates seek improved competition in the number of suppliers, concern for fuel coming in through the Savannah port, and a goal of reducing metro Savannah are truck traffic.

The firm proposing to build a new pipeline that would connect South Carolina and Florida fuel sources, Kinder Morgan, was seeking to conduct a study of a possible path for a pipeline; there was no conclusion by the firm yet on whether it should be built.  But, vocal opponents were able to get even the survey process stopped.   An underlying reason is concern that Georgia’s environmental oversight in the licensing phase is not strong enough.

Kinder Morgan proposed the pipeline to carry gasoline from its terminal in Belton, South Carolina, down the Georgia coast running close to I-95, potentially, and using much of the existing right-of-way already used by electric and natural gas utilities companies.  A terminal would potentially be built in Richmond Hill, to access the fuel, cutting down on the trucks on I-16 and I-95 that come from the Macon, GA and No. Augusta, GA terminals.  A large percentage of fuel comes in my ship by Colonial Oil, up the Savannah river, for processing and distribution.

The Georgia Department of Transportation ruled that there was no economic need along Coastal Georgia for a new pipeline, and denied Kinder Morgan the authority to gain access to private property along the route to conduct the survey.  Kinder Morgan had approval from 85% of the private property owners along the potential route, but needed the State of Georgia to grant access through eminent domain, to the remaining 15%.  The company appealed the GaDOT Commissioner’s decision to the Superior Court of Fulton County, which upheld GaDOT’s ruling.

The study committee report concluded that its members were still struggling with language such as what the words “convenience” and “necessity” mean in regards to economic necessity, old regulations the GaDOT Commissioner used in his ruling. 

And, a fundamental issue is whether fuel oil should be considered a utility when it comes to State authority to use eminent domain for the greater public good.  South Carolina state law allows the use of eminent domain for fuel and gasoline pipelines, but has now voted its own two-year moratorium. 

Rep. Al Williams from Liberty County also serves on the study committee. 

Next step: both the House and Senate will have to approve any bills that accept the Study Committee report recommending two more years of study. 

Interestingly, the Joint Study Committee on Broadband Service in Georgia, which also released its report this week, includes the following:  "Require the Georgia Department of Transportation to open the right-of-way for conduits and fiber on rural roads."  In other words:  use eminent domain for this important utility. 

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