A Pennsylvania court has ruled against a group of landowners in the southeast part of the state that argued Sunoco Logistics Partners LP's Mariner East 2 pipeline is an interstate system that does not qualify for eminent domain under state law.
The Cumberland County Court of Common Pleas found that Mariner East 2 is an intrastate pipeline that would deliver natural gas liquids (NGL) within the state and meet the criteria of a public utility with eminent domain rights. Six landowners had argued that because the pipeline would deliver NGLs from Ohio and West Virginia it would be an interstate pipeline regulated by the federal government and not state laws governing eminent domain.
The 350-mile pipeline would transport ethane, butane and propane from processing and fractionation complexes in Eastern Ohio, Western Pennsylvania and West Virginia to the Marcus Hook Industrial Complex -- a former oil refinery near Philadelphia that's being repurposed for NGL storage, processing and distribution to domestic and international markets (see Shale Daily, Dec. 5, 2013). The court's ruling is the first recognizing the pipeline as an intrastate system and it was a victory for Sunoco, whose plans for Mariner East 2 have faced staunch opposition (see Shale Daily, April 28, 2014).
A previous ruling in nearby York County found that the pipeline was an interstate system with no eminent domain power under state law. Since that ruling, however, Sunoco has changed its plans to add four new delivery points in the state to meet demand. A similar case on the other side of the state in Washington County, PA, is set to be heard later this month, in an indication that the matter is likely to be decided on appeal by a higher state court. The Cumberland County landowners are considering an appeal.
Last year, Sunoco filed for public utility status with the state Public Utility Commission (PUC) seeking exemptions from local zoning ordinances that could have been problematic for Mariner East 2's development. It was forced to file the request after it became clear that some townships in the southeast were opposed to the pipeline and publicly challenging it.
In March, though, Sunoco withdrew its request with the PUC, saying it had either secured the necessary zoning approvals or changed the pipeline's path (see Shale Daily, March 9). While state courts have largely granted the company survey access, there has been disagreement about its eminent domain power. Sunoco has said that seizing land for the pipeline is a last resort.
Construction on Mariner East 2 is expected to begin next year. The company also launched a binding open season in September for a third Mariner East pipeline that would follow Mariner East 2's path (see Shale Daily, Sept. 14).