Monthly Archives: February 2016

Mariner East 2 Delay

Sunoco Logistics admits Mariner East 2 delay. The CEO related the delay to permits, not needed property rights!

Sunoco Logistics delays Mariner East 2 pipeline

Construction of the Mariner East 2 pipeline, which has provoked landowner opposition along its route, has been pushed back until summer because of delays in obtaining permits, the pipeline’s operator announced Thursday.

Michael J. Hennigan, the chief executive of Sunoco Logistics Partners L.P., told investment analysts that more time was needed to obtain “hundreds of permits” required to build the cross-state pipeline, which will deliver Marcellus Shale natural gas liquids to Marcus Hook.

“I don’t like the word ‘delay,'” Hennigan said in response to an analyst who used the term. He said the the prolonged review was “not an intentional action” by any particular regulatory agency. The pipeline requires permits from several federal and state agencies, including the U.S. Fish and Wildlife Service, the Pennsylvania Department of Environmental Protection, and the U.S. Army Corps of Engineers.

No mention was made of Sunoco’s ongoing struggles to obtain rights of way from reluctant landowners along the pipeline route. The route largely follows the pathway of the existing Mariner East pipeline, which last year began propane deliveries and this month began sending ethane to Sunoco’s terminal in Marcus Hook.

Hennigan said the initial shipment of ethane would begin loading in the next few days, marking the first time that the material, which is used in petrochemical production, would be exported from the United States. Two European plastics producers have signed contracts to buy the ethane that Sunoco delivers to the Delaware River port.

The JS INEOS Intrepid, one of a fleet of new tankers built by European chemical producer INEOS to carry liquid fuels like ethane and propane, is currently moored in Marcus Hook, according to www.marinetraffic.com. A second vessel, the JS INEOS Ingenuity, has been anchored off the Delaware Coast since Sunday night.

Hennigan updated investors on Sunoco’s plans during a conference call after the Newtown Square company announced its annual financial results. The company is an affiliate of Energy Transfer Partners L.P. of Dallas, Texas.

The delay in the start of construction of the Mariner East 2 pipeline would mean the project now will come online in 2017, rather than the end of 2016, Hennigan said.

The Mariner East 2 project would expand the existing pipeline’s capacity from 70,000 barrels per day to 345,000. It would deliver natural gas liquids from the Marcellus and Utica shale areas of western Pennsylvania, West Virginia and eastern Ohio.

Sunoco says the producer demand for takeaway capacity from the shale region is so strong that Sunoco may build a second, adjacent Mariner East 2 pipeline — that would be a total of three Mariner East pipelines. But it has not yet received enough firm commitments from shippers to commit to the expansion, which Hennigan attributed to uncertainty over the current downturn in oil and commodity markets.

One analyst noted that the current “pause” in the construction start could allow Sunoco more time to line up commitments for the second Mariner East 2 pipeline. Sunoco has said it would want to build both pipelines simultaneously to reduce costs and disruptions.

The first Mariner East project is a 300-mile long 8-inch pipeline that was built 84 years ago to deliver refined products from Philadelphia refineries to inland terminals.

Written by: Andrew Maykuth | philly.com
Photo and caption: Construction was underway in early 2015 to prepare the future site of Mariner East 2 storage and processing equipment at Sunoco Logistics’ complex in Marcus Hook. Delaware County Council

By |February 25th, 2016|Categories: Condemnation, Eminent domain, In the News, Pipeline Construction, Property Rights|

Philadelphia Judge Provides Opinion Adverse to Eminent Domain Power

Clean Air Council and Impacted Landowners Defeat Sunoco Efforts to Throw Out Lawsuit Challenging
Mariner East Pipelines

Philadelphia, PA – The Philadelphia County Court of Common Pleas today rejected Sunoco Pipeline L.P.’s attempts to throw out a lawsuit challenging Sunoco’s Mariner East pipeline projects.  The Court ruled that plaintiffs Clean Air Council and two impacted landowners have standing to bring the case and the Court has jurisdiction to hear it.

If approved, the Mariner East projects would transport natural gas liquids—primarily ethane, propane, and butane—from Ohio, West Virginia, and Western Pennsylvania to the Marcus Hook Industrial Complex near Philadelphia for export overseas. Clean Air Council and the Law Offices of Pinnola and Bomstein argue that Sunoco should not be allowed to use eminent domain to build its Mariner East pipelines because Sunoco has not obtained the approvals necessary to give it rights of condemnation and because the projects would not serve any public need in the Commonwealth of Pennsylvania. While Sunoco has been asserting to landowners along the proposed Mariner East route that it has the right to use eminent domain to build the projects through their properties, this decision makes very clear that Sunoco’s right of eminent domain is not nearly so well established as it has been trying to convince citizens it is.

The Court also agreed with the plaintiffs that those living nearby the pipeline have the legal standing to sue because residents living near the pipeline projects would be affected by the pipelines even if their land would not be taken for the route.

“This is a great victory for Pennsylvania residents and landowners,” said Joseph Otis Minott, Esq., Executive Director and Chief Counsel of Clean Air Council.  “Today, the Court declared that Pennsylvania citizens threatened by these pipelines have a right to have their legal claims move forward, despite Sunoco’s attempts to shut the courtroom doors on them. We appreciate the Court’s thoughtful and well-reasoned opinion.”

“As best we can tell, this is the first time that a Court of Common Pleas opinion has recognized the broad range of legal and constitutional issues posed by these interstate pipeline projects,” said Michael Bomstein, attorney for plaintiffs deMarteleire and Bomstein. “By refusing to dismiss our suit and certifying the matter for appeal at this stage, the Court now has set the stage for a statewide ruling on whether Sunoco can continue to get away with using eminent domain for private profit at the expense of the environment and the citizens of the Commonwealth,” said attorney Bomstein.

Sunoco Pipeline is expected to appeal the ruling to the Pennsylvania Superior Court within a month.

Read this Order and Opinion Overruling Preliminary Objections here.

Article published: www.cleanair.org

 

By |February 25th, 2016|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Ongoing Washington County Litigation vs. Sunoco

Attorneys Present Arguments in Sunoco Pipeline Case

An attorney for five Washington County property owners who face property losses to Sunoco Pipeline for its Mariner East project told a judge Thursday the company does not have the jurisdiction for eminent domain.

“They don’t need eminent domain to build pipelines,” attorney Michael F. Faherty of Hershey told Washington County Senior Judge William R. Nalitz. “This could be built without eminent domain.”

Sunoco attorney Stephanie Carfley countered that Sunoco is regulated by the Pennsylvania Public Utility Commission as a public utility and thereby has the authority to exercise eminent domain.
“The goal is not to use eminent domain,” Carfley said. “But that doesn’t mean we don’t have the power of eminent domain.”

Landowners want Nalitz to stop Sunoco’s efforts to take portions of their property by ruling the company does not have jurisdiction to exercise eminent domain.

They are Rodney Lee and Robin Louise Rohrer of 108 Poplar Road, Avella; John Paul Craig, Frank Stewart Craig and Timothy David Craig of 638 Country Road, Avella; Harry Joseph and Patricia Marie Yevins of 136 Fox Road, Avella; Edward J. Thomas III and Bonnie W. Thomas of Dairy Road, Mt. Pleasant Township; and David Alan and Esther L. McPeak of 3075 Henderson Road, Washington.

The property owners who attended Thursday’s arguments before Nalitz declined to comment. Nalitz did not indicate when he will issue his decision in the case.

Faherty contended in his argument before Nalitz that the Mariner pipeline is interstate commerce, as opposed to intrastate commerce, because it crosses state lines, and that the state Public Utility Code doesn’t apply.

“Interstate commerce is not regulated by the PUC,” Faherty said. “If it crosses state lines, it is interstate commerce.”

Carfley disagreed, saying the pipeline project is both an interstate and intrastate service.

“It (the Mariner East pipeline) will have numerous public benefits,” Carfley said.

Carfley said the gas products from the pipeline will be used throughout Pennsylvania, which she said will see a financial boon from the pipeline.

Carfley said the pipeline will have a $4.2 billion impact on the state, creating 30,000 jobs for people who will earn $1.9 billion during its construction.

Sunoco in 2012 announced the Mariner East pipeline project for “wet” gas products such as propane, ethane and butane, designed to relieve the oversupply of natural gas liquids in the Marcellus and Utica Shale basins and to alleviate supply-side shortages of propane and related products in parts of Pennsylvania and the Northeast.

The finished pipeline would stretch between Washington County and Twin Oaks, Delaware County, in the Philadelphia area.

Faherty said in an interview after the arguments before Nalitz that Sunoco has offered his clients financial compensation for their land, but the offers have been “inadequate.” Faherty said Sunoco could “go around” his clients’ property to build the pipeline.

“My clients would sell their property for a fair price with fair easement terms,” Faherty said.

Written by: By Karen Zapf | Observer-Reporter|Washington Co.
Graphic: Sunoco Logistics

By |February 22nd, 2016|Categories: Condemnation, Eminent domain, Pipeline Construction, Property Rights|

Faherty Law Firm Presents Evidence Against Sunoco Eminent Domain

Can Cumberland County farmland be taken for pipeline? Monday’s hearing to continue Feb. 29

It was difficult to tell who was getting more honks from passing cars – the handful of protesters or the man in a Statue of Liberty costume advertising a tax-preparation service.

But cars were honking, and what was clear from the signs the protesters carried was that they did not want Sunoco Pipeline’s proposed Mariner East II running through Cumberland County.

And while there were a few protesters outside of the Cumberland County Courthouse Monday morning, about 30 more people filled a courtroom, coming out in support of three Upper Frankford Township property owners who fear having a liquid natural gas pipeline running under their land.

It will devalue their properties, cutting them by about 40 percent, property owner Rolfe Blume said.
Property Owners Oppose Pipeline Upper Frankford Township resident Rolfe Blume addresses why he opposes Sunoco Pipeline’s plans to run a natural gas pipeline through his property.

And it could be dangerous, too, neighbor John Perry added, saying there is a 1,000-foot “hazard zone” around the proposed line that could affect his land and the people who live nearby should there be an accident.

After the first day of a hearing in Cumberland County Court, the main question at issue remains unanswered. Does Sunoco Pipeline have the authority to take a portion of land from three Cumberland County property owners?

Judge M.L. “Skip” Ebert heard from the company and from the property owners who filed objections with court over Sunoco Pipeline’s declaration of taking.

Sunoco officials indicate they have that authority, saying they are a public utility with the right to exercise eminent domain to take land in the services of public need.

“We’ve had decisions in three other counties to date involving eight separate properties,” said communications manager for Sunoco, Jeff Shields. “They said very clearly that we are a public utility with eminent domain authority and our project is something that serves the public need.”

But the property owners argue otherwise.

“The only need here is for Sunoco to make a profit,” said Michael Faherty, the attorney representing the property owners.

Both parties will have to wait a little while longer to find out who is right, though. The hearing will not resume again until Feb. 29.

Faherty worked to build the case on Monday that under state law, eminent domain cannot be used for private enterprise, even if there is an element of public use.

Can a pipeline builder take your property through eminent domain?

Can a pipeline builder take your property through eminent domain?

If a state grants public utility status to pipeline builder, the company eminent domain rights. But is it really a public utility?

And since the Mariner East pipeline expansion, called Mariner East II, will be used for overseas export, that constitutes a private enterprise and no public need, he argued.

Additionally, this makes Sunoco’s Mariner East II pipeline an interstate pipeline rather than an intrastate pipeline, and thus subject to federal regulations, which do not grant Sunoco eminent domain, he said.

But Sunoco Pipeline’s attorneys said many of these issues were already resolved not just in other counties, but in Cumberland County, as well, when Judge Edward Guido ruled in favor of the company’s ability to exercise its power of eminent domain.

Expanding the pipeline system with Mariner East II became necessary with the frigid temperatures that came with the polar vortex in the winter of 2013 and 2014, creating a greater public need for propane, vice president of business development Aaron Alexander testified Monday.

Faherty pointed out, though, that the propane will be going across Pennsylvania and into Delaware for shipment overseas.

“How does that benefit the public in Pennsylvania?” Faherty asked.

Alexander told him the public benefiting can also include the shipping companies.

And when Faherty went on to point out the contracts currently associated with the expansion do not require offloading in Pennsylvania, Alexander countered offloading locally is not required, but the contracts do allow for it.

“They allow for intrastate movements as well as interstate movements,” he said.

Alexander also said he does not agree with Faherty’s labeling Sunoco Pipeline as private enterprise, saying the company is a public utility and their rates have been approved by the the state.

When Blume, who has owned his Upper Frankford Township property since 1965, took the stand, he said the pipeline will prevent crops from growing and will ruin several buildings on his land.

And being in a “hazard zone” around the pipeline devalues his property and will make it difficult to sell, he said.

But Sunoco Pipeline’s attorney, Alan Boynton, countered that the pipeline will be underground, and property owners are still free to use the land above however they wish. Any damage will be compensated, as well, he said.

Though the hearing has been continued until the end of the month, property-owner Perry did not feel too confident about their chances of success. The judge indicated he’s still bound by his fellow judge’s ruling unless he hears something different than what has already been ruled upon.

“They keep missing the point,” Perry said. “A lot of this natural gas going through the pipeline will be shipped overseas.”

And Blume, who carries a folder full of photos of burning infernos from pipelines, is hoping the judge will prevent the pipeline from going through his land.

“The line they want to put in is 100 feet from the farmhouse,” he said. “It’s dangerous.”

Written By Steve Marroni | pennlive.com
Photo Caption: Nathan Sooy and Betsy Conover hold signs outside of the Cumberland County Courthouse in support of several Upper Frankford Township residents who are fighting eminent domain proceedings initiated by a pipeline company. (Steve Marroni/PennLive.com) pennlive.com

By |February 9th, 2016|Categories: Condemnation, Eminent domain, News, Pipeline Construction|

Donald Trump’s Errors on Eminent Domain

Ilya Somin provided a thoughtful commentary on Donald Trump’s comments on eminent domain. Somin is a Professor of Law at George Mason University.

Donald Trump’s lightweight defense of taking property for private development [updated with a brief discussion of pipeline takings]

By |February 9th, 2016|Categories: Condemnation, Eminent domain, Pipeline Construction|