Real Estate & Property Law

The Problem in Evaluating Gas Pipelines

By Alan Ackerman

The people in South Dakota are concerned with the safety system of the pipelines.
    The reality is that the Michigan MPSC and the national FERC apparently understood that a pipeline in the Marshall Michigan area was a problem.  Yet, they chose to allow the dangers to fester until there was a complete break in a pipeline creating havoc on the Kalamazoo River.
    Hopefully, as pipelines are approved in other areas, the dangers of the pipelines, something that is simply not calculated in the valuation process, are considered so as not to endanger the properties.  Yet, the concern remains and, while at the same time there is no economic analysis available to show how it affects property values.  The affect on the values is real, and becomes all the more real when one watches what happened with the pipeline breakdown in a marshland and creek near Marshall, Michigan.  

cnn.com
        
Ever since, the Sibsons say they've worried about leaks from the underground river of crude flowing about a quarter mile from their farmhouse. The pipeline, say company officials, is outfitted with a constantly monitored safety system featuring state-of-the-art technology and an emergency response plan.

"We raise cattle on grass," said Sue Sibson. "Our livelihood is that grass out there, and if that gets ruined, we're out of business."

Some experts fear two issues that were blamed for the Gulf tragedy -- spotty government oversight and emergency response -- could result in a disastrous spill somewhere along America's approximately 170,000 miles of oil pipelines.

In May and then again in June, TransCanada reported small oil leaks at two pumping stations near the Sibson farm -- one less than two miles up the pipeline. Mike Sibson complains that TransCanada should have alerted his family about the incidents. "I might be the first one to spot a leak because I can't depend on them to get the job done."

"No sense in alarming them," said TransCanada Vice President Robert Jones. "There was no concern with regard to the environment or public safety with these very, very small, isolated incidents."

Significant hazardous oil pipeline spills spiked during the past 20 years at 176 in 1994 and dipped to their lowest level -- 99 -- last year, according to federal statistics.

The Gulf disaster and then Michigan's 800,000-gallon pipeline oil spill in July has put the pipeline industry under a microscope and placed more pressure on TransCanada during a critical time.

The Calgary-based company is seeking U.S. permission to build a new oil pipeline stretching from Alberta, Canada, to refine

Full post as published by National Eminent Domain Blog on August 24, 2010 (boomark / email).