Bluegrass Uprising

As American energy production booms, thousands face pipelines in their backyards.

Lorrie Reed lives alone in a trailer on a rural road outside Frankfort, Kentucky, on two acres of land that her late husband bought more than twenty years ago. He left the property to her and their daughters when he died in a motorcycle accident. “He told me before he passed that the place was going to be mine, and the only way I’d lose it was if I let somebody mess me out of it,” Reed says.

Ever since this past summer, when land agents approached her—twice—to ask permission to survey a proposed pipeline route across her property, Reed repeats these words to herself. She walks with a limp, an injury from a collision with a dump truck during the years that she worked on road maintenance crews. She owns a pistol because she is afraid of the feral dogs that she says are common in the area. She held the gun in her palm when the pipeline consultants pulled into her gravel driveway. “You’re trespassing,” she told them.

Still, she decided to sign the paperwork allowing them to survey. A day later, a letter arrived at her house from the Bluegrass Pipeline Blockade, a loose-knit network of Kentuckians organized mainly through Facebook. Reed learned that the pink survey ribbons in the field across the street from her land marked the potential route of a two-foot-diameter transcontinental pipe. It would haul a mix of butane, propane, pentane and other chemicals—called “natural gas liquids,” or NGLs—from fracking wells in West Virginia, Ohio and Pennsylvania all the way to the Gulf of Mexico. Nine years ago, a four-inch NGL pipeline about a tenth as big destroyed five homes in eastern Kentucky and left a state trooper with severe burns after he rescued a 3-year-old child. In August of this year, a ten-inch NGL pipeline ruptured in western Illinois, shooting flames 300 feet into the air.

The information frightened Reed, and she wrote to the Williams Companies, one of the two corporations leading the pipeline project, to say that she had changed her mind: no one from the Bluegrass Pipeline project should set foot on her land.

By the end of the summer, distressed property owners and other Kentucky residents had united in an uprising against the pipeline. The project hasn’t aroused much public outcry in the other seven states it would cross. But in Kentucky, the proposed route traverses hallowed terrain: the eponymous Bluegrass Region, where the Kentucky Derby’s prizewinning horses graze; rolling hills pocked by springs, rivers, and aquifers that flow through the limestone soils and give Kentucky bourbon its characteristic taste. Opponents say a pipeline spill could destroy Kentucky’s traditional economies. Signs saying No Proposed Bluegrass Pipeline now line many of the rural roads; one sits at the edge of Reed’s yard. Officials in several counties and one city have passed resolutions protesting the pipeline or pleading with the state or federal government to consider the potential impact on property rights and the environment. Since at least October, land agents hired by the pipeline developers have been privately making deals with property owners—but some, like Reed, say they won’t budge.

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It’s becoming a familiar battle for the fossil-fuel industry, as it scrambles to build new infrastructure to move the massive quantities of oil and gas that it’s producing in the Northeast, Southwest, Rockies and Great Plains. As technology has made it easier and more cost-effective to extract natural gas and oil trapped in rock formations, fossil-fuel production has boomed in the United States, reversing a decades-long decline in domestic fuel production. (The International Energy Agency predicts that the United States will be the world’s number-one producer of oil and gas by the end of 2015.) But despite President Obama’s brag in 2012 that he’s overseen enough new pipelines to “encircle the Earth and then some,” the United States is fracking and drilling so enthusiastically that the builders of pipelines can barely keep up. “Developing new pipeline capacity…will not be without difficulties,” the Brookings Institution wrote in a 2013 report. “Landowner rights…pose potential obstacles that can slow down the construction process.”

There are dozens of new oil and gas infrastructure projects—and thousands of miles of new pipelines—planned for the next few years. But pipelines carry flammable, toxic materials next to homes, and many experts say they’re poorly monitored by the government. The Federal Energy Regulatory Commission approves any proposed new gas pipelines that cross state lines, and the Pipeline and Hazardous Materials Safety Administration (PHMSA) oversees their safety standards. But PHMSA is notoriously understaffed: just 110 federal inspectors supervise the nation’s 2.5 million miles of existing pipelines. (PHMSA says it has help from about 300 state inspectors, but they don’t cover every state.)

Oversight for new pipelines carrying oil and NGL—both classed as “hazardous liquids”—is even laxer, say critics. Although agencies like the Army Corps of Engineers and the US Fish and Wildlife Service issue permits related to specific environmental concerns, no federal regulator scopes the whole project or checks whether the pipeline could follow a different route—one, say, with a narrower environmental impact. With the exception of densely populated zones, places with drinking-water sources and any land deemed “unusually sensitive,” if a pipeline operator notices a safety problem, it is, according to the watchdog group Pipeline Safety Trust, “left pretty much up to [their] good judgment” to decide when to fix it.

In the absence of help from federal agencies, thousands of people and hundreds of communities negotiate with oil and gas companies on their own. A handful of local governments in various parts of the country—including Missouri and Washington State—have passed ordinances that grant stricter oversight for new housing, schools or hospitals near existing pipelines, and a few states have standards for restoring soils around new projects that cross farmland. Still, when a new pipeline is proposed, property owners have to nail down the details in their contract—often with the help of a lawyer, almost always at their own expense. Without much guidance from regulators, they negotiate the money, as well as how much distance to leave between a pipeline easement and a house, and whether the company will replant the trees it has bulldozed or rebuild fences.

The stakes are high, and the situation can leave people vulnerable—especially if a company claims it can use eminent domain, the power to seize private land for a project deemed to serve the public good. In Kentucky, for several months, both of the companies involved in the Bluegrass Pipeline project insisted they could, although the Kentucky Energy and Environment Secretary refuted this in a public meeting in September. Still, the threat has frightened some property owners.

When I visited Reed in October, I could imagine the pipeline agents sizing her up—a motorcyclist in her 50s, disabled and hard-pressed for income. She sat on a cooler in her front yard in a rainbow tie-dyed shirt, squinting into the sun through thick glasses. She’s going blind from a disease called macular degeneration, she says. She’s gone without health insurance for years, and friends give her their extra prescription inhalers for her asthma and Epi-Pens to ward off bee-sting allergies. Even a few thousand dollars from the Williams Companies would have covered some of her healthcare. In the summer, Reed says, pipeline consultants trailed her to a nearby store. “They were all like, ‘Yeah, you’re going to make good money,’” she recalls. But Reed was unmoved. “I’m a fighter. I always have been.”

Ever since Bill McKibben and farmers and ranchers in the Plains and Southwest turned the Keystone XL pipeline into a litmus test for Obama’s position on climate change, pipelines have been a charged subject. New pipeline projects have provoked public ire: in Manhattan, rallies broke out against the Spectra natural gas line; in the Midwest, Native American horse riders led a protest against the Sandpiper crude oil line. The United States has launched itself headlong into an oil and gas renaissance, and the fossil-fuel industry is asking millions of people to accept new risks from fracking, drilling, refining, and hauling oil and gas on an ever-grander scale. But aside from rock-bottom natural gas prices, it’s not clear whether the risks come with many rewards. Consider the implications for climate change: US carbon emissions have dropped in recent years partly because we are burning more gas (from fracking) and less coal. But new research says the EPA may be grossly underestimating how much methane—itself a powerful greenhouse gas—is leaking from fracked wells into the atmosphere. And while some economists argue that fracking is revving up the manufacturing sector and other new investments, skeptics contend that the entire industry could be heading for a crash as overexploited shale reserves decline.

As the market for methane has become overloaded, producers have relied on selling natural gas liquids, which would pump through the Bluegrass Pipeline, to stay profitable. NGLs are used in plastics manufacturing, petroleum refining and in various other petrochemical processes. Propane can also heat homes and cook hamburgers on backyard grills, and pentanes are a gasoline ingredient. According to Forbes columnist Tom Konrad, “relatively high prices for NGLs have kept many…gas wells profitable despite low gas prices.” But the NGL market is oversaturated too, and the Brookings Institution predicts that it will also hit a glut in a few years.

To ease the glut, the industry will have to move the fuel to new markets in the United States or to export terminals so that it can be sold overseas; and companies say pipelines are safer than other methods for transporting oil and gas. In general, the data on pipeline accidents back them up: from 2005 to 2009, trucks carrying oil and gas had twenty-two times as many spills and accidents as did natural gas pipelines (after factoring for distance and the amount of fuel carried by each). Hazardous liquids pipelines had thirty-four times fewer accidents than trucks and three and a half times fewer accidents than railcars carrying fossil fuels.

But there are a lot of unanswered questions about the environmental hazards of pipelines. “There have been no definitive studies showing that pipelines are the most environmentally safe means of transport for oil and natural gas liquids,” says Lois Epstein, an engineer with The Wilderness Society. When a pipeline ruptures, it spills an order of magnitude more fuel than a train, sending toxics into soil and water. When an NGL pipeline breaks, it can be especially hazardous. The contents are heavier than air and compressed under high pressure to keep them in liquid form. They can explode or spill, tainting soil and water with toxins. A year ago, a leak in a Williams Companies NGL pipeline in Parachute, Colorado, went undetected for two weeks. It dumped 10,000 gallons of toxic chemicals, including cancer-causing benzene, and left a ten-acre plume of contamination in the groundwater.

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“What is a fair offer?” James Smith asked.

“I’m not going to say. I’ll tell you what—it’s more than fair,” the agent replied.

James, his wife Rita and I had left their farm in Nelson County, Kentucky, a few minutes before and come across the agent’s blue pickup truck, labeled “Bluegrass Pipeline,” as the narrow road rounded a corner. The agent (who asked not to be named) had been napping in the front seat when the Smiths pulled up. He worked for a survey company that was contracted to negotiate with property owners along the Bluegrass route. Now he stood beside his truck as the Smiths peppered him with questions, but he wouldn’t give any details about the deals being made with local property owners.

“If it’s $24 a linear foot, I wouldn’t smell a person’s breath for that,” James told him.

It was early October. By then, locals had heard that the Williams Companies were offering landowners a one-time payment: a few tens of thousands of dollars, depending on local property values and the length of the easement. (When I asked, the Williams Companies wouldn’t confirm any specifics, but other reports of easement sales have named similar amounts.)

The Smiths live in Indiana, just across the border from Louisville, and rent part of their property to a local farmer. The land has been in James’s family for more than 200 years. “I was intending to leave it to my sons,” he said. James worries most about a pipeline leak or explosion, which could make local property values sink. A few small-scale studies on pipelines say the easements themselves don’t have a detectable impact on real estate prices—although there are anecdotes, in Kentucky and elsewhere, of property owners who couldn’t sell their land once a pipeline was present.

The Bluegrass agent tried to assure the Smiths that pipeline companies are “building stuff a lot better than they ever have.” They didn’t seem convinced. “You have your interest to protect; I have mine,” James said with a parting handshake.

It’s hard to know how well the agent’s safety claims will hold up. The section of the Bluegrass Pipeline that will run through this area will be new construction. (As the route heads west, the companies plan to convert an older natural gas pipeline.) Newer pipelines use improved construction materials and updated technology. But there’s no guarantee that they will be safer: a lot depends on how well a pipeline is constructed and maintained. “We see pipelines under certain conditions that can fail from corrosion within five years, and others that have been in the ground for eighty years that look brand-new,” says Carl Weimer, the Pipeline Safety Trust’s executive director.

In November, James Smith told me he’d received an easement offer for $40,000 plus a signing bonus for a quick response. He asked his lawyer to reject it.

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The Smiths’ farm lies in an area southeast of Louisville called the Kentucky “Holy Land,” counties marked by monasteries, churches, convents and colleges founded by Catholics more than two centuries ago. Here, poet and scholar Thomas Merton wrote about the “sublime fire of infused love” and renouncing material success in the secluded Abbey of Gethsemani. This past summer, Bluegrass Pipeline agents asked permission to scope a possible route through Gethsemani, where a community of monks sustains itself from donations and the sale of homemade cheese and fudge. The monks said no. In July, an agent approached the Loretto Motherhouse, where about 100 mostly elderly nuns and other women live and pray on a campus covered with statues of saints and angels. The sisters—who are known to turn up at protests against coal-mining—were incensed. In August, they interrupted a community meeting held by the Williams Companies by belting out verses of “Amazing Grace.”

The monks and nuns use their modest resources to help people in the community who have financial troubles, and though they are more left-leaning than many of their neighbors, people trust them. In the summer and fall, locals who opposed the pipeline began asking the nuns to appear at community meetings.

Mike McCain, a farmer in Washington County, read an op-ed in a regional newspaper by a nun named Sister Claire McGowan about three weeks after a land agent walked onto his land and asked permission to survey for a “gas line.” In it, McGowan wrote: “NGLs are…highly flammable and extremely explosive. They are also extremely toxic to living beings in case of contact.”

McCain has limestone sinkholes on his farm, and a river circles his fields. The information in the op-ed angered him: “[The agent] deceived me. It was not a gas line.” McCain began attending meetings and talking with neighbors and his five adult children—all of whom are farmers—about pipeline safety. The more he learned, the more outspoken he became, until he began getting invitations to give public speeches at community meetings alongside state lawmakers. “There’s just no money for me that’s worth it,” McCain told me.

The support from the Kentucky religious community may be one of the reasons the opposition has grown so defiant here. The Bluegrass Pipeline Blockade has also received help from two statewide organizations, Kentuckians for the Commonwealth, a progressive advocacy group, and the Kentucky Resources Council, a legal aid group. KRC has helped two lawmakers draft bills that would prevent the Bluegrass Pipeline from seizing private land via eminent domain; the Kentucky Legislature will take these up in January. In December, the organization also filed a lawsuit against the Bluegrass Pipeline over this issue.

Groups like these have made some locals feel empowered to refuse offers. But many people have been private about their dealings with the pipeline land agents. “I’ve got some that have sworn me to secrecy,” said Keith Metcalfe, a government official from Nelson County.

Charles Howard, who runs a hardware store in Nelson County, is one of the few who have been willing to speak openly in provisional support of the project. Howard envisioned a unified effort among property owners around the region to broker a better deal with the company, such as getting annual payments instead of a single fee. Such arrangements are rare or nonexistent in pipeline easement contracts.

A few weeks ago, he received an offer for an easement on his property. He sent the agent a counter-offer. “If we had sat down and bargained with them as a whole county and worked together, we could have got things that both sides liked”—the pipeline opponents and those who wanted to sell easements] liked,” he said. “But as it was…everybody was set to bargain on their own.”