Sunoco set to take land for pipeline
By Timothy Puko
Published: Friday, July 26, 2013, 12:17 a.m.
Several property owners could lose land from a pipeline company's use of eminent domain — all because of William Penn and the Duke of York.
Sunoco Logistics Partners LP has notified landowners in several communities that it will try to take land for a pipeline running from Washington County to an export terminal near Philadelphia.
Its partners, primarily Range Resources Corp., plan to export half of the natural gas to Europe. Philadelphia-based Sunoco Logistics filed its first eminent domain claim in Westmoreland County this month — an attempt to compel landowners to allow a pipeline easement on their property in return for a fair-market payment.
The oddly drawn border by Penn and the duke puts a small part of Sunoco Logistics' gas terminal in Delaware. After snaking for nearly 300 miles within Pennsylvania, the last half-mile of the pipeline edges into Delaware.
That half-mile is key, experts said, because any inch of a pipeline that crosses a state border qualifies as interstate commerce, giving Sunoco the power to take land for the project, even if it's designed to ship gas overseas.
“That is very convenient,” said Amanda M. Olejarski, a Shippensburg University professor who released a book about eminent domain in March. “They're really kind of massaging and taking advantage of all the advantages the law provides them.”
Sunoco Logistics spokesman Joe McGinn said the company works with landowners “to negotiate and acquire easements without utilizing legal avenues,” and has offered and paid “above-market appraisal value for the property.”
Ethane, propane gases
The Mariner East project is part of a $600 million plan that generated controversy when company land agents began approaching landowners more than a year ago. Sunoco Logistics decided to move the route once, pushing it into central Westmoreland County when critics raised questions about the risk to public safety and use of eminent domain in dense suburbs along the Allegheny County border.
Though experts consider pipelines among the safer forms of transport, this is not a typical natural gas line — and that worries some residents. It will carry ethane and propane, liquid gases that hover in explosive clouds instead of dissipating during leaks, safety experts have said.
The pipeline's more rural route follows alongside two Dominion Resources Inc. gas transmission lines. Yet several residents are fighting that plan, claiming their property was not restored from the previous work and that Sunoco Logistics has not guaranteed it would work any better.
Some people think the company is using eminent domain to bully its way through, without answering questions or negotiating.
“I've asked them several questions, and they haven't answered a one. ... They come in and expect you to blindly sign their contracts,” said William A. Mossor Jr., 49, of Sewickley in Westmoreland County. “They're definitely abusing eminent domain. ... It should be used as a last resort.”
Range Resources wants the project to be acceptable to locals and has had some success in mediating these disputes, especially in Washington County, where it has drilling deals with landowners, spokesman Matt Pitzarella said. Sunoco Logistics did not initially accept that help, he added.
“While this pipeline is important to the economic growth of the region, Range is concerned with the apparent heavy-handed approach,” he said. “We're not Sunoco, so there's only so far we can go.”
A Sunoco official did not immediately respond.
Sunoco Logistics asked Common Pleas Judge Richard E. McCormick in a July 12 filing to grant its workers permission to enter the Mossor property to conduct surveying. Mossor made several demands in order to grant access, with which the company is not required to comply under Pennsylvania's eminent domain code, the company claimed.
Mossor negotiated more amicably with Dominion, he said, in part because federal rules guided that project. The Federal Energy Regulatory Commission gives broad eminent domain powers for natural gas lines but requires public meetings. FERC intervenes to manage the placement of gas lines from the start of the process — but not oil lines.
The agency considers ethane and propane lines as oil lines, spokeswoman Tamara Young-Allen said. It regulates the prices set on oil lines that cross state borders after they're completed.
That's enough to be considered a federally regulated utility under Pennsylvania law, which grants such projects an exemption to use eminent domain for private business, experts said. Landowners must go to court if they want to challenge what Sunoco Logistics offers.
‘It's still interstate'
The issue is magnified because of the shale gas boom reviving energy production nationwide, said William F. Demarest Jr., a lawyer and eminent domain expert at Husch Blackwell LLP in Washington. Texas dealt with several similar cases, he said.
“The privately owned pipeline just for its own oil, not a common carrier, wouldn't be entitled to eminent domain. It's the public use character that is controlling here,” Demarest said.
The pipeline ends at Marcus Hook Industrial Complex, a former refinery site straddling the Pennsylvania-Delaware border. Mariner East technically ends in Delaware, but a network of smaller pipes sends gas back into Pennsylvania and throughout the rest of the complex to storage tanks and docks where Europe-bound ships will load on both sides of the border, McGinn said.
Of the 781-acre site, satellite maps show a fourth of it lies in Delaware, west of the circular border William Penn set in 1682.
“It doesn't matter whether a hundred-mile-long pipeline crosses into another state by 10 miles or 100 feet — it's still ‘interstate,' ” Demarest said.
These types of pipelines have an impact on how quickly the gas industry grows in Pennsylvania, because having more pipelines boosts prices and growth, he said.
Gov. Tom Corbett; U.S. Sen. Pat Toomey, R-Lehigh Valley; and other political leaders lauded the Sunoco Logistics pipeline as a job creator in remarks sent to Range Resources for its September announcement touting the project's progress.
The pipeline would move up to 70,000 barrels of fuel daily from a MarkWest Energy Partners LP plant in Chartiers that separates propane and ethane from gas extracted from Marcellus shale.
MarkWest processes the gas for Range Resources, which can make more money by selling propane and ethane separately. Those products are priced more closely to oil, in part because they can be used for more things, such as manufacturing and plastics. Range plans to supply most of the gas for Mariner East and has contracts to ship half of it to Europe, it has said.
If Sunoco Logistics succeeds with its eminent domain plan, other companies could try the same, said Olejarski at Shippensburg.
“It's going to become more and more common,” she predicted. “These organizations and companies, they learn from each other.”
Timothy Puko is a Trib Total Media staff writer. Reach him at 412-320-7991 or firstname.lastname@example.org.
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