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Trust Responds to Article About Eminent Domain

Published: April 12, 2017 1:24 PM

Trustees for the Teter Trust recenlty responded to an article in the February issue of the Ohio Gas & Oil magazine and asked for an opportunity to address issues raised in an article written by Atty. Monica E. Russell.

Carol A. Teter and John K. Lovejoy, trustees for the Teter Trust, said “(your company)  has an excellent reputation for serving and informing many communities in eastern Ohio with their hometown newspapers. While the eminent domain article in the Ohio Gas & Oil magazine is informative on a superficial level, so many critical facts are left out that the uninformed reader is likely to walk away as uninformed as before.”

Teter and Lovejoy also said that “As Ohio landowners and mineral owners, we appreciate the information Ohio Gas & Oil Magazine offers the public. It discusses industry information that directly relates to local issues that is often unavailable in newspapers or television. As such, I’m sure you strive to present information in an evenhanded manner.”

However, Teter and Lovejoy said the February article fell short, in their opinion.

In their remarks, they wrote: “In “Court Rules Sunoco Can Use Eminent Domain for Pipelines”, the author discusses the case Sunoco Pipeline v. the Carol A. Teter Trust. We are the trustees of that trust. When we first saw the article, we were hoping for an informative piece, as there has been a distinct lack of news coverage of our case, outside of the Harrison News Herald weekly paper. With all due respect to the author, it reads like a rehashed Sunoco press briefing. Neither we nor our attorney were contacted for information or comment.

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There are a number of factual misstatements and serious omissions that would lead a reader to a conclusion that is very different from the facts.

“First of all, the tone of the article makes it sound like we were using a technicality to try to overturn Ohio’s eminent domain law. Not so. When the law in question, Ohio Revised Code 1723.01, was enacted in 1953, petroleum was understood to mean crude oil, and that was the way it was interpreted. Two appeals court cases in 2001 expanded that to include commonly used fuels such as gasoline, diesel and jet fuel. The ruling in our case represents a huge expansion of the power of this law, which was primarily meant for utilities such as natural gas, water and electricity. We just want the law to be interpreted as written and used for 64 years.

“The article stated that our expert witness, Dr. Paul Matter, a PhD in chemical engineering, testified that petroleum is a complex mixture of hydrocarbons that is a liquid at standard temperature and pressure (60 degrees Fahrenheit, 14.7 lbs air pressure). That is true in the world of chemical engineering, and is also what the definition for petroleum is in O.R.C 3737.87(J), which defines petroleum for laws governing underground storage tanks, which often store the products that underground pipelines transport. Matt Gordon, Sunoco’s engineer with a B.S. engineering degree and not an expert witness, testified that in the oil and gas industry, any component of petroleum is still considered petroleum. Under our questioning, he admitted that under Sunoco’s theory, substances such as mercury and arsenic would also be considered petroleum, as they are also components of petroleum, and a company could appropriate land to transport them. The courts chose to ignore our expert’s testimony and O.R.C 3737.87(J).

“The article states that Sunoco argued that the propane and butane would be used to heat homes and as an additive to gasoline, and would be used at cracker plants. Not so. Sunoco offered testimony that propane and butane “could” be used this way, but only speculated on the possible uses. They had every opportunity to give evidence as to where and how these products would be used, but they did not. We practically begged them. They stated that up to 7% of the propane, or about 2% of the pipeline’s total capacity, may be used in eastern Pennsylvania on “off ramps” that they may build. But, they could not give the name of a possible propane distributor or oil refinery. We feel that 2% of a pipeline’s capacity to heat homes and provide gas for barbeque grills is not sufficient to justify the use of eminent domain.

“Unmentioned in the article is the fact that most or all of the Mariner East I pipeline’s products is being shipped to Europe, and that least most if not all of the products shipped in the Mariner East 2 will end up there too. The name of the pipeline has meaning: Mariner; by sea, and East; to Europe. These products will be used by cracker plants – in places like Sweden. Not a bad thing, but again, is that something we want to use eminent domain for?

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“Unmentioned in the article is the financial side of the issue. Landowners often get $35-$60 per foot for pipelines of this type and size. Sunoco’s written offers were less than $5 per foot, and they weren’t interested in bargaining. Their only rationale for using eminent domain is so they can save money.

“Unmentioned in the article is fact that companies like MarkWest have built hundreds of miles of large-diameter natural gas liquids pipelines without using eminent domain at all. Sunoco kept arguing that pipelines were necessary to transport the products out of the area. Nobody was disputing that; their position was that the pipeline could not be built without use of eminent domain, which is clearly not the case.

“Unmentioned in the article is the fact that on September 2nd Sunoco surveyed a route around us that was approximately the same distance as the route through our property. By the time we filed our motion to stay on October 11th they had options for an easement across more than half of the alternate route. They then did nothing until the fourth week of January. In a flurry of activity, they signed up the rest of the easements in a few days. We have told them for over two years to go around us. All of their delays and/or damages are entirely self-inflicted. The pipeline is currently being constructed around us.

“The author points out that when we asked the Ohio Supreme Court to grant an emergency stay, Sunoco opposed it and asked us to post a bond in the princely sum of $9.5 million for their losses. Why they would think we would be responsible for their losses while the matter is under appeal is beyond us. During the stay hearing in the court of common pleas, we repeatedly asked them how they could quantify such a number. They could not. We asked for the emergency stay from the Ohio Supreme Court on October 11th. On October 12th, the Chief Justice notified Sunoco that they had until October 13th to respond to our motion, instead of the usual 10 days. On the morning of October 14th, the Ohio Supreme Court granted our motion by a 5-2 vote, and required no bond from us. The Court had access to all the court documents at the county and appeals court level, and clearly understood what they were doing when they halted construction on our property. They did not have to take the case, and they did not have to grant the stay, but evidently they understood that there are large issues of property rights involved. In the 63 years since this law was enacted, this is the first time it has landed in front of the Ohio Supreme Court. This will be the first eminent domain case accepted by this court in over a decade.

“When the initial decision in the Harrison County Court of Common Pleas was made in December 2015, ruling that ethane, butane and propane were petroleum for the purposes of using eminent domain to construct pipelines, another company, Kinder Morgan, filed appropriation actions against approximately 300 Ohio landowners for their Utopia ethane pipeline, with lowball compensation offers. Stapled to these lawsuits was a copy of the judge’s ruling in our case.

“As there are many more NGLs pipelines that are planned for the future in Ohio as the industry grows, the ruling in our case is clearly consequential for landowners and the industry alike. After the Ohio Supreme Court accepted our appeal and granted our emergency stay, Kinder Morgan began settling these cases by fairly negotiating with landowners for easements and dropping the eminent domain actions. At this time, as far as our legal team can determine, there are no new pipeline projects that are using this court’s decision for eminent domain. Pipeline companies are once again negotiating fairly with landowners for easements, as they should.”


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