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Court Dismisses Bid to Block REX-East Construction in Eastern Ohio

July 20, 2009
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A district court in Ohio last Tuesday dismissed a complaint brought by affiliates of coal company Murray Energy Corp., which sought to block Rockies Express Pipeline LLC (REX) from building its pipeline over active mining areas in eastern Ohio until it can come up with a "definitive mitigation plan" certified by a registered engineer in the state.

Affiliates American Energy Corp. and Consolidated Land Co. in April filed their complaint in Belmont County Common Pleas Court, seeking injunctive relief and damages from REX. The case, which was subsequently moved to the U.S. District Court for the Southern District of Ohio Eastern Division, alleged that REX was impeding the Murray Energy affiliates' coal and mining rights by its failure to commit to any post-construction mitigation measures.

District Judge Gregory L. Frost ruled that the complaint against the pipeline was beyond his jurisdiction, given that orders issued by the Federal Energy Regulatory Commission (FERC) are subject to review by appellate courts.

The Commission approved the last leg (REX-East) of the 1,678-mile pipeline in mid-2008 (see NGI, June 2, 2008). This portion (639 miles) of the cross-country pipeline will end in eastern Ohio. Murray Energy last month asked the Commission to stay construction of the REX-East line, which crosses approximately eight miles of Murray-controlled coal reserves. The request still is pending [CP07-208].

"The court cannot consider an attack on the 'propriety of FERC's proceedings, findings, orders or reasoning'...The law does not permit this court to act as a reviewing entity second-guessing FERC's actions or reasoning here, regardless of the possible implications of FERC's decisions. The FERC letters permit construction, even if violative of FERC's own rules, and this court is not empowered to interfere with that decision," Frost said.

Claims by the Murray Energy affiliates of potential safety hazards and interference with mining operations "constitute collateral attacks on the FERC certificate [approving the REX pipeline] and the FERC's decision" to allow REX to build the pipeline across the plaintiff's coal operations in Ohio, the judge said.

Frost further called the Murray Energy affiliates' argument "factually disingenuous...because plaintiffs seek to obtain in the present litigation what they were unsuccessful in obtaining in the proceeding before the FERC."

Murray and REX have squabbled over the pipeline's construction plans since the Commission authorized the start of REX-East construction last year (see NGI, July 28, 2008). Within days, REX asked the agency to schedule a technical conference to discuss how the company might pursue an environmental construction requirement for its REX-East leg to cross Murray's coal reserves, saying it might need an alternative route. The certificate issued by FERC last year directed REX to develop a plan with Murray that would "maintain pipeline integrity and operation while not impeding the mining operation." Failing that, the company could offer an alternative route.

The portion of the REX-East pipeline from Audrain County, MO, to the Lebanon Hub in western Ohio went into operation on June 30 (see NGI, July 6). The remainder of the pipeline to Clarington in eastern Ohio is expected to be in service by Nov. 1. The REX pipeline will have a capacity of 1.8 Bcf/d when completed.

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