KM response to Palmetto Pipeline decision

Kinder Morgan, Inc. has announced that it received notification that the Georgia Department of Transportation (Georgia DOT) 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% 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% of the proposed route is co-located next to existing infrastructure – power lines, pipelines, roadways and railways – and that over 80% 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 US 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 minimise 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 bpd 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 3000 miles of pipelines across 85 Georgia counties, and employing 300 people within the state. When approved, this approximately US$1 billion project will generate approximately 1200 temporary construction jobs, 28 permanent full-time positions, and result in projected revenue to state and local taxing bodies of over US$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% 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 bbls 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.

Adapted from press release by Hannah Priestley-Eaton

Published on 21/05/2015

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