Natural Gas Flowing Through North Florida’s Backyard?
Although a natural gas boom and the Keystone XL Pipeline currently dominate the national energy dialogue, a related but less-publicized project is planned for the southeast. This project consists of an interstate pipeline transmitting natural gas from a hub in Alabama through Georgia and terminating in southeast Florida’s Martin County. Florida Power & Light Company, the major utility company planning the pipeline, recently awarded Sabal Trail Transmission, LLC (a joint venture of two very large energy corporations) the contract to build and operate a major portion of the pipeline. With ever-increasing demand for natural gas and a lack of any significant natural gas production in Florida, the two major natural gas pipelines already delivering natural gas to the state are nearing capacity. Sabal Trail’s portion of the new pipeline will cost an estimated $3 billion, transport at least 1 billion cubic feet of natural gas a day, and span 456 miles across the three states. Construction is planned to begin in the spring of 2016 and the pipeline is expected to be operational by summer of the following year. Thus, although energy companies are currently buying up land in other states in order to access natural gas deposits through techniques like hydraulic fracturing, the new pipeline serves as a reminder that the natural gas boom can affect landowners in Florida, too.
Sabal Trail has yet to announce a precise route for the pipeline; however, it is expected to affect north-central Florida counties of Ghilchrist, Alachua, and Levy. Landowners in the area need to become aware of the potential implications of this pipeline. Some landowners in these counties have already received letters from Sabal Trail indicating the potential for impacts to their land. Once Sabal Trail determines a particular route, the company will begin negotiating with landowners to purchase fee title or an easement for its use. If a landowner refuses to sell, the company may also use the power of eminent domain to force the sale. Whatever the case, the landowner will need to consider a variety of potential legal consequences.
In the case of an easement, it is important, for example, to consider tax implications, maintenance responsibility, the specific activities Sabal Trail will conduct on the land, what materials and substances might be introduced onto the land, and whether the company will remove the pipeline if it is ever abandoned. For eminent domain, Sabal Trail will file an action in court to force the sale. The landowner will appear and respond in the proceeding, and the main purpose will be to determine the amount of compensation. Nevertheless, it is important for landowners to understand that decisions related to their land and Sabal Trail’s construction of the pipeline could have a wide variety of implications.
Update on Florida Power & Light Co.’s Natural Gas Pipeline
A major pipeline that will transport at least 1 billion cubic feet of natural gas a day across a significant portion of the Florida peninsula recently received one of the last two major regulatory approvals required. The contracts for building the pipeline, which were awarded by Florida Power & Light Co., the utility planning the pipeline, to Sabal Trail Transmission, LLC., received state approval by the Florida Public Service Commission (PSC) in late October. Already, in 2008, the PSC found that there was a need for the pipeline, and after PSC’s approval in October, the next and final big step remaining is federal approval.
Sabal Trail is currently studying various corridors before it determines a preferred route for the pipeline, which is actually an interstate pipeline that will originate in Alabama and travel through Georgia before beginning its Florida route. Sabal Trail plans to submit its preferred route, along with alternatives, to the Federal Energy Regulatory Commission (FERC) sometime in 2014. The FERC is a federal agency with preemptive authority to approve interstate natural gas pipelines, and it usually does approve such pipelines along with a variety of conditions. Thus, through Sabal Trail’s process and the FERC approval process, the precise route of the pipeline may change, making it important for landowners with land potentially in the project area to become and stay involved in these processes. Moreover, once a final route is fixed, Sabal Trail must secure legal permission to cross private parcels of land along the route. The company will do so either by entering in to voluntary contractual relationships with landowners or through the power of eminent domain, which is conferred to interstate natural gas pipelines upon FERC approval.
For more information please visit the Sabal Trail Transmission, LLC website.