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Eminent domain is a tough pill to swallow for Americans who take their property rights very seriously, and the aggressive moves by Sabal Trail to seize property for a natural gas pipeline running through three southern states is turning into a drama of immense proportions.
Sabal Trail, the joint venture planning to build a 500-mile natural gas pipeline through Georgia, Alabama, and Florida, has gone to court in order to secure the right of way through the land where the pipeline should pass.
So far, Sabal Trail has filed 160 eminent domain suits and more are expected, according to a report by the Orlando Sentinel. The company is desperately trying to get the right of way through 346 more properties, though it says it has already secured the agreement of 1,248 landowners in the area along the route.
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But it’s doubtful that any of these will be allowed by the respective courts to reach the stage of contestation and litigation due to the stated regional importance of the pipeline project.
Florida satisfies almost two-thirds of its power needs with natural gas. Coal is a distant second at around 22 percent, making gas the major source of power for the state. The numbers are not as high for Georgia and Alabama, but natural gas is a significant component of the energy source mix there as well.
Sabal Trail, which is owned by Spectra Energy Corp (NYSE: SE) and NextEra Energy (NYSE: NEE), will carry one billion cubic feet of gas daily once it starts operating at full capacity, and will supply it to regional utilities Florida Power and Light, Duke Energy, and Spectra. Construction works are slated to begin in late June, and the pipeline should be operational in May 2017.
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The pipeline project, however, is facing serious opposition, which focuses on environmental and health concerns.
Local government officials in Georgia earlier this month said Sabal Trail operators were using the eminent domain suits to threaten stakeholders into granting the right of way for the pipeline and, worse, relinquishing any responsibility for damages to the pipeline that could pose environmental and health risks. The state’s representatives last week rejected a resolution that would have granted Sabal Trail easement through the problematic properties.
There are those who believe that any opposition will be crushed, because the project is so important it cannot be stopped.
As for those who disagree, the news that Kinder Morgan has suspended the construction of the Palmetto pipeline because of strong local opposition is somewhat reaffirming. Palmetto would have carried crude oil from South Carolina to Florida, but the Georgia legislature passed a moratorium on new oil pipeline construction in the state.
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There are a lot of groups fighting the construction of the pipeline, and the Sabal Trail is likely to have a tough time getting the necessary right of way.
While it argues that the project will not only be safe but also economically beneficial for the three states, opponents counter with the danger of sinkholes and gas leaks, and question the economic benefits of the project. They also argue that solar power is a better alternative to gas.
While Kinder Morgan has thrown in the towel, Sabal Trail seems determined to hold fast, despite what is working out to be a situation in three states that suggests American landowners feel the balance between their rights to property, and big business may be shifting in the latter’s favor too far and too fast.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.