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Economy and Business


Bluegrass pipeline project through Ohio and beyond is cancelled
It was a big midstream project that didn't appear to be attracting enough business
by WKSU's TIM RUDELL


Reporter
Tim Rudell
 
Map of proposed Bluegrass Pipeline route
Courtesy of WKSU
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In The Region:

The billion-dollar Bluegrass pipeline that was to be running across Ohio in 2015 will not be.  WKSU’s Tim Rudell reports on the decision of its builders to scrap the project.

LISTEN: The shifting economics of a pipeline

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The plan was to send some production of the Utica and Marcellus shale from Ohio and Pennsylvania to distribution facilities on the Gulf Coast.  But in a written statement calling it a plan ahead of its time, project lead-partner, Williams Energy said there was “an insufficient level of firm customer commitment”  to go forward.

Didn't pan out
Kenneth Medlock, senior director of the Center for Energy Studies at Rice University’s Baker Institute says “firm commitment” refers to potential users saying they will need specified pipeline capacities. Dr. Kenneth Medlock, Rice University

He also says, falling short of hoped-for interest is just part of the business.

"This isn’t the first time you’ll hear of a pipeline that’s conceived and doesn’t go forward. It’s not rare. Let's put it that way. The builder of the pipeline needs those firm commitments to underwrite the facility in the first place. That’s true on every pipeline."

Medlock says the interest may have thinned in a pipeline moving south because right now, the more potentially lucrative destinations for shipping gas and liquid products from the Utica and Marcellus may be Canada or  the U.S. East Coast.

Protests as well

There was widespread and active push back against the Bluegrass plan from environmentalists and concerned citizens groups along its proposed route from western Pennsylvania, through northeast, central  and southwest Ohio, to about half way across Kentucky. The most intense protests were in Kentucky.

And a Circuit Court judge in Franklin, Ky., ruled that the pipeline builders could not use eminent domain to acquire easements on properties where owners did not want to allow the pipeline to cross.

However, on its website the Bluegrass Pipeline joint venture indicated that the decision to shut down the pipeline project was not influenced by the Kentucky court decision, and was driven by economics. 

Related WKSU Stories

PUCO gains oversight of vast network of oil and gas pipelines in Ohio
Thursday, October 31, 2013

Listener Comments:

I'm sure you are making the Middle Eastern countries happy that the American people cannot work together to become a major oil producing country that will not depend on foreign oil.


Posted by: Loretta (Pennsylvania) on June 28, 2014 12:06PM
So happy it failed. We don't want the pipeline down our block or anywhere else in Delaware County.


Posted by: Mary Burns (Treadwell NY) on May 16, 2014 11:05AM
It is the policy of the United States to protect the rights of Americans to their private property, including by limiting the taking of private property by the Federal Government to situations in which the taking is for public use, with just compensation, and for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken.
http://en.wikisource.org/wiki/Executive_Order_13406


Posted by: Joe G (Toledo) on May 8, 2014 10:05AM
I am glad this pipe line failed . The people came to my home with three different reps.and none of them had the same story .in the end I told them to go around because I'm not selling out for five grand.the water well and septic they would have destroyed would have set back 25,000 but they offered five.and the land couldn't be touched other than mowing grass .so all I can say is so long big oil the little man finally won one.praise god in the highest way possible .


Posted by: Terry Thomas (newlexington,ohio) on May 7, 2014 10:05AM
NO KXL....EVER....ANYWHERE....or....BY ANY OTHER NAME....I/E:- Blue Grass....Seaway....Pegasus


Posted by: Silverhawk (Texas) on May 3, 2014 3:05AM
Thank you, Thank you, Thank you!!!!!


Posted by: Karen Holdridge (United States) on May 1, 2014 2:05AM
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