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Transcript of Palmetto DOT Submission
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A. FEBRUARY 13, 2015 APPLICATION AND SUPPORTING DOCUMENTS
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B. MARCH 18, 2015 GDOT REVIEW LETTER
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C. APRIL 8, 2015 SUPPLEMENTAL INFORMATION LETTER
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D. PROJECT OVERVIEW
Palmetto is a wholly owned subsidiary of Kinder Morgan, which is incorporated inDelaware and has its principal place of business in Houston, Texas. Palmetto is authorized to do business in Georgia, South Carolina, and Florida, and has an office in Alpharetta, Georgia.Kinder Morgan is the largest energy infrastructure company in North America, and it owns aninterest in or operates approximately 80,000 miles of pipelines, transporting natural gas, refined petroleum products, crude oil, and carbon dioxide. Kinder Morgan also stores and handles avariety of products and materials at its over 180 terminals, such as gasoline, jet fuel, ethanol,coal, and steel. Specifically, Kinder Morgan is the largest independent transporter of petroleum products, transporting about 2.3 million barrels of product per day. Kinder Morgan currentlyowns an interest in or operates over 3,000 miles of pipelines in Georgia alone.
To build on this infrastructure and meet a critical need, Kinder Morgan, throughPalmetto, has developed a pipeline project that will provide significant benefits to Georgia by providing an additional source of supply of refined petroleum products and ethanol toconsumers. Once operational, the pipeline will be capable of transporting refined petroleum
products, including gasoline, petroleum oil distillates, biodiesel blend, and renewable diesel blend, from origin points located in Baton Rouge, Louisiana, Collins and Pascagoula,Mississippi, and Belton, South Carolina to destination points located in North Augusta, SouthCarolina, the Savannah area, and Jacksonville. The pipeline will also be capable of transportingdenatured fuel ethanol as a purity product, on a batched basis, from the Belton origin point toeach of the destination points. Palmetto anticipates beginning construction of the pipeline inApril, 2016, to complete that construction in advance of the pipeline being placed in service byJuly, 2017. Palmetto intends to comply with all applicable federal and state laws regarding thesiting, construction, and operation of the pipeline.
The pipeline will enter Georgia south of Augusta, and route through Richmond, Burke,
Screven, Effingham, Chatham, Bryan, Liberty, Long, McIntosh, Glynn, Camden, and Charltoncounties before crossing into Florida. In Georgia, approximately 86 percent of the route is alongexisting easements and public utility corridors. This route is designed to minimize, as much as possible, the impact of the pipeline.
The pipeline would carry refined petroleum products such as gasoline, diesel fuel, jet fueland ethanol, at 150,000 barrels per day (bpd), with an ultimate capacity of 167,000 bpd. This product will be delivered through the pipeline to terminal locations located in North Augusta,South Carolina, Richmond Hill, Georgia, and the Jacksonville, Florida area.
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E. THE NEED FOR THE PALMETTO PIPELINE
1. Palmetto Is Needed to Meet Growth In Fuel Usage
Over the next 25 years, Georgia’s population will grow by about 49%, and the population of the 12counties on the pipeline route, plus their 11 neighboring counties in Georgia, will grow by 43%. These 23counties (and others) will benefit from being able to receive gasoline, ethanol and diesel fuel from the
Palmetto Pipeline. The basis of these population projections and the list of counties are found in Table E-1.
The 23 East and Coastal Georgia counties used 778 million gallons of motor fuel in 2014 or 50,000 barrels per day (bpd), not counting the large quantities of motor fuels used at Fort Gordon, Fort Stewart,Hunter Army Air Base, and for off-road purposes. The basis of this fact is found in Table E-2.
Motor fuel usage will closely track population growth, even with improving car and truckefficiency, according to a 2010 report by the Carl Vinson Institute. “The Motor Use Fuel Tax in Georgia:Collection Efficiency, Trends, and Projections,” Wes Clarke, Warren Brown, and Matt Hauer, Carl VinsonInstitute of Government (December 2010), attached as Appendix 3. Tables 10 and 13 in the Vinson
Institute report contain, respectively, statewide population projections and statewide gasoline and dieselfuel use projections. Projected population increase from 2011 to 2020 is 12.6%. Projected gasoline anddiesel use from 2011 to 2020 is 15.4%. The conclusion drawn is that statewide motor fuel consumptionwas projected to increase faster than the state’s population (even considering improved fuel efficiencies innewer cars and trucks).
Assuming this trend continues, a 43% increase in the motor fuel use to 72,000 bpd in the 23 Eastand Coastal Georgia counties (matching their projected 43% population increase by 2040) is aconservatively low projection of 2040 motor fuel needs in that narrow section of Georgia.
2. Palmetto is Needed for Capacity Expansion and Choice
East and Coastal Georgia are pipeline constrained. In Middle and South Georgia, existing petroleum products pipelines deliver fuel only to Macon, Columbus, Albany and North Augusta. Palmettowill provide the first direct petroleum pipeline to the Savannah area and to Jacksonville, and willsupplement the North Augusta pipeline capacity. Some fuel is brought by marine vessels to Savannah andJacksonville. The vast majority of the fuel used in Coastal Georgia is transported by tanker truck from petroleum terminals at Macon and North Augusta that are served by pipelines. The Palmetto Pipeline will provide infrastructure needed for the continued healthy growth of East and Coastal Georgia, without anystate incentives or other public investment.
3. Palmetto is Needed for Highway Safety
Assuming 80% of the motor fuel in the 23 counties is delivered to the wholesale and retail outlets by 10,000 gallon capacity tanker trucks, and that these trucks can haul maximum loads of 8,800 gallons ofgasoline or 7,500 gallons of diesel, it takes 198 truck-loads of motor fuel and 198 return trips, 365 days peryear, to serve these counties. Without this pipeline, it will take 43% more trucks in 2040.
The Savannah area alone has about 15,000 bpd of motor fuels trucked to it from Macon and NorthAugusta. (About 5,000 bpd may get to the Savannah area by marine vessel.) These 15,000 barrels per day
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require 74 truck trips per day, or about 27,000 trips per year and 7.8 million highway miles per year bytruck.
If the Palmetto Pipeline supplies just half of the current 15,000 bpd of fuel to the Savannah area, itwill eliminate 13,500 tanker truck trips and 3.9 million miles driven by those trucks annually.
The pipeline will significantly reduce the number of truck miles driven to get fuel to customer
outlets. A new pipeline terminal near Savannah will put at least 17 Southeast Georgia counties closer to a pipeline sourced terminal than they are now, which will reduce tanker travel miles driven. A terminal atJacksonville will put at least 7 other Southeast Georgia counties closer to a pipeline sourced terminal.Fewer truck miles driven means lower probability of traffic accidents, decreased traffic congestion, andless wear and tear on Georgia’s highways. See Table E-3 for list of counties benefitted.
4. Palmetto is Needed to Reduce Fuel Transportation Costs to Consumers
Pipeline transport is the safest and most cost efficient way to move large quantities of motor fuel.Trucking a gallon of fuel from Baton Rouge to Savannah costs about 30 cents/gallon. The cost of marinetransport for a gallon of motor fuel from Baton Rouge, LA to Savannah is about 50% less than trucking it
between those same points. The cost to send a gallon of fuel by pipeline from Baton Rouge to Macon or North Augusta, and then truck it to Savannah, is about 36% less than marine transport. The cost to send agallon of fuel from Baton Rouge all the way to Savannah by pipeline is about 25% less than the currentmethod of pipeline plus trucking.
5. Palmetto Is Needed to Increase Healthy Competition
Competition is good for the economy. Georgia encourages competition among its manufacturers,food processors, timber and mining industries, telecom and natural gas utilities, farmers, retailers, andsmall businesses. The Palmetto Pipeline will not only help serve Georgia’s growing population, it will also provide competition for the very limited motor fuel choices in East and Coastal Georgia.
As a general proposition, additional sources of supply will lower motor fuel prices. There iscurrently only one independent supplier to the Savannah area, and the free enterprise system hasdemonstrated over and over that competition reduces prices and/or increases choices. The market willsupport as many suppliers as needed to provide good service at a reasonable rate. Note: Palmetto will notown the product transported in the pipeline and will not set the price of gasoline at the pump, and thereforehas no ability to raise or lower fuel prices.
6. Much of the Fuel Carried by Palmetto Will Be Used in Georgia
Kinder Morgan estimates that at least 50-60 percent of the pipeline capacity will transport refined
products to consumers in the Augusta and Savannah areas. Additionally, the close proximity ofJacksonville (the third terminal market for Palmetto Pipeline) to coastal Georgia communities suggests thatmuch of the additional product shipped through the Palmetto Pipeline to Jacksonville will ultimately entermarkets in South Georgia. Kinder Morgan estimates that the following quantities of barrels per day (bpd)will be offloaded from the pipeline:
• North Augusta area: 40,000-50,000 bpd• Savannah area: 20,000-25,000 bpd• Jacksonville area: 70,000-80,000 bpd
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7. Product on the Pipeline Is Not For Export
Neither the existing terminal in North Augusta, nor the proposed terminals for the Savannah areaand Jacksonville are or will be export terminals. The proposed terminal for the Savannah area will belocated along I-95 in Richmond Hill, far from any marine facility. The Palmetto Pipeline has been
designed to provide transportation service from the Gulf Coast refineries to these market centers and nofurther. The Gulf Coast refineries, where products transported through the Palmetto Pipeline will originate,already have marine export capabilities, so it would not be economical to transport fuel to North Augusta,Savannah, or Jacksonville for subsequent export outside of the United States.
8. Palmetto Pipeline Will Result in Public Convenience
• Meeting the 43% growth in motor fuel needs in East and Coastal Georgia over the next 25years is a convenience. Not having Palmetto Pipeline would result in 43% more tankertruck trips from North Augusta and Macon to meet the growth in fuel need. Avoiding thatmany more trucks and millions of additional annual truck miles driven on Georgia’s
highways will be a traffic convenience for Georgia’s citizens.• Avoiding millions of additional truck miles annually on East and Coastal Georgia highways
will reduce the probability of highway accidents involving trucks. Thus Palmetto Pipelinewill result in safer highways. Increased highway safety is a convenience for Georgians.
• Providing more competition to fuel suppliers in the Savannah and Augusta areas, startingimmediately when Palmetto Pipeline goes into operation, is a convenience. Competitionwill be inconvenient for the one independent motor fuel supplier in the Savannah area, andto a few other existing suppliers in the Augusta area. However, competition will be veryconvenient to the hundreds of thousands of automobile and truck owners and thousands offarmers in East and Coastal Georgia, since they will have more opportunities than theycurrently have to save money on motor fuel costs. Avoiding unnecessarily high fuel costs is
a public convenience.• Palmetto Pipeline will result in less heavy truck traffic and thus less wear and tear on
Georgia’s highways. Georgia’s citizens pay for highway construction and repair with theirtax dollars, so having their highways last longer before repairs are needed means lowerrepair costs to taxpayers. Saving tax dollars is a convenience for Georgians.
9. Shippers and the FERC Have Approved This Project
These facts prove what the market has already revealed: there is a substantial need for the PalmettoPipeline. Palmetto’s prior filings with the GDOT describe the binding commitments it has received to shiprefined products through the pipeline.
Following these commitments, and as part of the approval process required for this project,Palmetto filed a petition with the Federal Energy Regulatory Commission (“FERC”) where Palmettorequested that the FERC approve the rates, and terms and conditions of service for the Palmetto Pipeline.Following a review of Palmetto’s application and the associated facts regarding this project, the FERCissued an order on May 1, 2015 (see Appendix 4) granting Palmetto’s petition and concluding that the project was consistent with FERC precedent: “The Commission finds that the rates, and terms andconditions of service offered to the potential committed shippers during the open season are consistent withthe ICA and Commission precedent.”
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TABLE E-1
POPULATION PROJECTIONS
COUNTY(l) 2014 POPULATION(2) 2030 POPULATION(3)
Brantley 18,417 25,462
Bryan 33,906 44,465 Bulloch 72,087 107,678
Burke 22,709 26,865
Camden 52,027 77,516
Charlton 12,897 12,879
Chatham 283,379 354,945
Columbia 139,257 178,880
Effingham 55,423 78,507
Emanuel 22,755 26,976
Evans 10,898 12,261
Glynn 82,175 98,625
Jefferson 16,272 17,866
Jenkins 9,125 8,698
Liberty 65,198 85,512
Long 17,113 26,016
McDuffie 21,370 24,436
McIntosh 14,214 18,653
Richmond 201,368 241,582
Screven 14,085 14,494
Tattnall 25,224 33,307
Ware 35,515 40,373
Wayne 31,982 37,275 TOTAL 1,257,396 1,593,271
(1) Counties on this list are the 12 Georgia counties through which a portion of the Palmetto Pipeline is
proposed, and the 11 other Georgia counties which lie adjacent to one of more of the 12 pipeline route
counties.
(2) 2014 populations are estimates made by the U.S. Census Bureau (USCB).
(3) 2030 population projections by the Governor's Office of Planning and Budget (OPB), January 2013.
*Total Georgia 2012 population is 10,097,343 per USCB.
*Total Georgia 2030 population is 13,154,530 per OPB's 2013 projections.
*Straight line projection from 2014 through 2030 to 2040 is 15,065,270.
*Total Georgia growth 2014 to 2040 will be 49.2%
*Straight line population for 23 counties from 2014 through 2030 to 2040 is 1,803,191.
*Total 23 county growth 2014 to 2040 will be 43.4%.
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Counties Total Local Sales
Tax on Motor Fuel
$
Sales Tax on
Motor Fuel as % of
Total Sales Tax
Current County
Share of Motor
Fuel Collections
$
3 cents/gal
Excise Tax
$
County
Transportation
O&M Budget
Appling 1,286,201 14.63 710,458 407,334 2,599,268
Atkinson 391,896 20.05 188,992 124,432 554,755Bacon 625,090 17.18 270,474 194,723 956,763
Baker 142,017 25.38 85,280 54,115 273,987
Baldwin 2,706,724 14.49 1,180,812 875,084 1,634,156
Banks 1,901,360 21.68 1,111,010 601,322 540,506
Barrow 2,833,882 10.79 1,151,518 908,051 1,751,004
Bartow 12,253,293 21.10 5,541,076 3,799,957 4,741,395
Ben Hill 933,689 14.67 463,532 298,776 1,073,567
Berrien 797,709 19.48 311,223 254,948 1,809,729
Bibb 11,051,879 12.58 5,143,087 3,566,045 7,026,239
Bleckley 473,086 17.72 186,333 151,510 691,684
Brantley 681,842 21.46 383,144 218,164 1,778,879Brooks 441,347 15.27 200,866 141,812 1,555,119
Bryan 4,867,811 32.71 1,848,626 1,508,856 1,466,382
Bulloch 3,859,657 12.93 716,668 1,241,718 2,650,576
Burke 771,044 7.39% 552,915 367,390 3,817,253
Butts 5,989,371 53.07 2,297,600 1,784,499 1,766,452
Calhoun 213,234 18.87 94,057 67,150 339,121
Camden 6,260,100 29.42 1,584,863 1,937,241 2,367,827
Candler 844,473 22.22 295,502 270,139 933,159
Carroll 7,804,738 16.74 3,213,973 2,468,999 5,405,226
Catoosa 3,819,804 14.34 1,959,574 1,223,591 2,039,644
Charlton 833,013 26.45 448,496 256,362 1,686,110Chatham 17,621,222 9.48% 3,530,425 5,599,955 14,838,889
Chattahoochee 157,809 5.81% 105,198 50,354 592,148
Chattooga 821,139 11.53 148,578 265,753 2,300,345
Cherokee 6,511,075 10.55 2,315,065 3,159,922 3,406,174
Clarke 5,107,287 8.21% 3,364,431 1,643,061 3,465,036
Clay 137,748 20.59 54,043 43,601 528,169
Clayton 18,304,886 13.82 8,596,284 5,759,819 17,409,599
Clinch 467,479 22.89 151,228 145,371 620,391
Cobb 23,841,340 9.14% 8,688,473 11,528,518 54,753,525
Coffee 2,588,235 16.31 779,763 816,589 2,821,379
Colquitt 2,367,619 15.16 788,579 755,515 3,303,259
Columbia 5,456,750 9.89% 3,239,492 1,755,403 6,623,770
Cook 1,153,445 22.24 609,100 367,816 932,191
Coweta 8,215,486 14.26 3,636,050 2,615,112 3,469,602
Crawford 198,104 12.86 108,779 60,207 831,452
Crisp 2,788,728 23.87 1,210,316 873,328 1,656,570
Dade 2,683,395 40.70 1,609,083 824,270 755,511
Dawson 1,589,650 8.21% 996,214 514,694 2,141,903
Decatur 1,911,823 15.73 720,609 601,213 2,120,509
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DeKalb 31,114,408 9.85% 8,444,316 9,988,518 17,488,676
Dodge 820,679 14.65 363,515 262,040 718,509
Dooly 1,685,158 42.19 730,013 519,065 2,326,997
Dougherty 6,603,407 14.09 1,671,454 2,086,865 1,898,792
Douglas 7,063,790 10.77 4,029,144 2,289,252 4,752,356
Early 513,372 11.63 194,341 160,542 1,014,849
Echols 44,621 14.15 29,748 14,262 454,378
Effingham 1,944,615 8.48% 961,646 628,062 1,787,999
Elbert 807,310 14.05 354,305 259,784 645,567
Emanuel 1,153,560 15.92 568,993 369,112 1,844,547
Evans 530,169 15.87 246,279 165,996 552,568
Fannin 1,601,392 13.75 874,651 514,558 5,891,614
Fayette 3,577,708 8.81% 888,873 1,741,486 3,504,527
Floyd 3,073,166 10.33 955,893 1,331,108 5,769,070
Forsyth 8,556,508 9.11% 4,917,296 2,761,537 7,775,942
Franklin 3,233,655 33.65 1,456,275 978,778 1,023,998
Fulton 43,136,176 5.98% 2,012,574 13,855,417 3,844,212
Gilmer 1,167,979 10.82 643,081 377,618 1,493,667
Glascock 69,468 12.58 36,117 22,489 402,842
Glynn 5,339,368 14.32 1,874,589 2,515,973 4,339,359
Gordon 5,181,806 20.89 2,553,767 1,598,803 4,166,738
Grady 1,590,306 21.23 638,827 505,602 834,552
Greene 1,220,677 17.36 888,122 564,705 1,242,385
Gwinnett 26,619,777 9.63% 10,502,681 12,887,491 34,907,908
Habersham 2,358,559 15.83 576,610 825,273 1,695,450
Hall 10,339,171 12.79 5,359,015 3,313,971 3,349,202
Hancock 135,650 9.83% 75,753 43,866 1,603,272
Haralson 3,301,912 32.09 1,267,172 1,014,224 1,946,812
Harris 1,149,959 16.69 663,398 368,638 1,087,428Hart 1,045,073 13.41 552,553 339,561 1,247,723
Heard 169,481 1.42% 90,365 54,846 381,851
Henry 11,189,744 12.63 5,219,876 3,620,015 15,180,707
Houston 7,310,204 11.70 1,501,986 2,350,554 4,873,809
Irwin 296,552 16.76 137,387 93,471 802,706
Jackson 5,245,903 19.25 2,285,208 1,633,759 5,375,203
Jasper 265,954 10.99 127,712 85,793 1,697,802
Jeff Davis 1,328,037 23.63 617,830 412,357 1,069,423
Jefferson 862,122 15.89 309,101 272,466 733,517
Jenkins 404,958 18.46 182,228 127,592 631,195
Johnson 353,704 22.56 200,367 111,575 975,304Jones 739,868 12.94 403,156 234,993 2,741,991
Lamar 757,642 16.73 281,641 242,204 924,840
Lanier 342,708 21.55 128,267 110,499 515,412
Laurens 5,006,567 21.18 2,108,166 1,556,536 2,701,783
Lee 1,223,432 13.14 681,882 394,733 1,743,983
Liberty 2,231,557 10.22 880,578 724,204 1,380,395
Lincoln 326,733 17.73 178,529 101,691 447,843
Long 221,351 15.37 123,172 71,043 974,948
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Lowndes 12,387,654 19.94 4,110,377 3,860,623 5,014,687
Lumpkin 930,665 10.70 488,757 301,592 1,010,120
Macon 450,459 14.31 145,080 139,460 263,220
Madison 1,091,885 19.57 589,145 351,264 832,739
Marion 208,500 17.09 89,731 65,265 306,959
McDuffie 2,491,665 25.92 1,377,382 773,960 1,366,054
McIntosh 993,323 26.66 513,233 320,131 1,012,752
Meriwether 667,413 13.84 354,924 214,310 1,103,915
Miller 252,006 16.56 136,515 80,081 672,340
Mitchell 1,027,413 16.13 341,806 324,060 767,922
Monroe 1,367,423 11.25 694,594 437,331 2,793,038
Montgomery 170,456 11.48 59,163 53,679 1,416,366
Morgan 3,060,817 29.96 1,605,089 945,783 2,459,147
Murray 1,477,823 12.88 840,679 473,029 1,534,615
Muscogee 8,393,357 8.17% 5,586,703 2,717,176 15,453,788
Newton 5,145,818 16.35 2,696,748 1,668,592 5,744,131
Oconee 2,455,211 13.90 1,424,070 795,020 3,955,358
Oglethorpe 307,144 15.65 193,191 98,752 1,309,515
Paulding 4,897,785 11.59 2,817,689 1,587,296 7,716,782
Peach 3,485,403 33.17 1,704,598 1,084,645 940,611
Pickens 1,936,021 16.55 948,992 625,860 2,238,245
Pierce 613,454 15.48 243,273 235,509 977,650
Pike 391,875 14.24 227,953 124,202 874,695
Polk 2,172,740 15.62 773,570 693,336 2,165,755
Pulaski 393,690 15.52 130,790 126,727 749,552
Putnam 1,023,799 13.48 450,869 323,817 3,708,245
Quitman 169,647 35.51 113,027 53,555 413,681
Rabun 1,450,761 15.11 80,148 466,606 1,725,074
Randolph 565,776 26.20 196,030 173,836 1,111,132Richmond 8,289,516 7.73% 5,041,049 2,667,426 11,239,942
Rockdale 3,638,542 12.10 3,096,964 1,583,684 2,661,493
Schley 135,933 15.15 52,680 42,928 206,223
Screven 578,769 16.62 292,900 184,210 1,324,567
Seminole 536,785 18.34 291,578 167,593 798,776
Spalding 3,279,121 13.31 1,195,749 1,060,019 2,649,959
Stephens 1,128,582 12.10 497,128 365,393 1,137,252
Stewart 203,581 23.05 60,388 63,799 530,179
Sumter 1,848,534 16.05 651,194 586,439 985,841
Talbot 123,828 10.00 63,270 39,933 761,640
Taliaferro 50,794 15.31 29,884 16,673 234,648Tattnall 1,089,791 21.23 508,085 341,058 1,712,725
Taylor 405,561 17.53 170,909 127,362 717,976
Telfair 610,290 18.24 158,429 192,542 510,046
Terrell 475,869 18.00 181,158 150,677 510,868
Thomas 2,613,811 12.82 861,816 839,660 3,290,605
Tift 6,507,231 25.83 2,151,272 2,013,785 2,897,335
Toombs 2,305,911 16.66 642,609 733,588 1,454,739
Towns 621,634 12.20 337,093 201,041 834,308
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Treutlen 246,155 21.76 87,373 79,852 313,46
Troup 5,702,124 17.99 2,014,896 1,780,438 1,427,60
Turner 564,022 23.25 212,257 181,779 798,07
Twiggs 525,132 32.15 288,890 215,279 1,164,53
Union 1,315,859 12.35 789,393 423,659 1,289,8
Upson 1,092,192 12.57 463,743 348,493 882,18Walker 2,159,547 14.88 1,058,208 701,428 1,870,64
Walton 4,087,886 14.58 1,791,512 1,315,471 4,750,67
Ware 2,554,275 13.16 1,030,253 808,671 1,641,05
Warren 115,100 8.97% 60,565 36,095 388,67
Washington 1,375,762 16.02 577,281 430,812 2,051,40
Wayne 1,563,124 13.83 691,952 495,632 2,652,19
Webster 128,947 23.30 85,021 40,715 303,53
Wheeler 233,763 19.26 95,020 72,424 603,85
White 914,683 9.08% 408,380 295,137 1,441,8
Whitfield 5,469,505 17.44 1,765,577 2,556,233 12,243,54
Wilcox 182,727 14.83 77,963 58,334 562,07
Wilkes 455,889 14.96 178,267 144,778 834,55
Wilkinson 491,066 9.99% 139,711 151,734 1,067,46
Worth 558,925 13.16 237,916 179,246 2,060,73
Total: 511,123,143 16.69% 197,652,706 175,415,167
This table was developed by GDOT for examining transportation funding options during the 2015 General
Assembly Session.
The column titled “3 cents/gal Excise Tax, $” is the column of interest. The total of the excise tax dollars for
the 23 East and Coastal counties is $23,350,625. Dividing that number by 3 cents per gallon yields the
number of gallons of motor fuel sold in those counties in 2014 on which excise tax was paid. This was
778,354,167 gallons. Rounded to 778,000,000 gallons per year, this is equal to more than 50,000 barrels per
day (bpd).
This is a conservatively low number for actual motor fuel use in the 23 counties, since several types of fuel
use are exempt from the excise tax (agricultural field use, non-highway use, military use, etc.) and thus are
not counted.
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TABLE E-3
COUNTIES THAT WILL BENEFIT BY BEING CLOSER TO A
PIPELINE-SOURCED PETROLEUM PRODUCTS TERMINAL
SAVANNAH AREA (BRYAN COUNTY TERMINAL)
JACKSONVILLE AREA (JACKSONVILLE TERMINAL)
Appling Brantley
Bacon Camden
Bryan Charlton
Bulloch Clinch
Candler Echols
Chatham Glynn
Effingham Ware
Evans
Jeff Davis
Liberty
LongMcIntosh
Pierce
Screven
Tattnall
Toombs
Wayne
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F. LOCAL BENEFITS OF THE PIPELINE PROJECT
Construction of the Palmetto Pipeline would generate approximately 1,200 temporaryconstruction jobs at its peak. While Palmetto will hire pipeline construction contractors to buildthe Palmetto Pipeline, these construction firms will hire local labor to augment their crews. Theeconomic impact of construction will be significant. Workers will rely upon local businesses,housing and support services during construction.
Palmetto will purchase property rights sufficient to construct and maintain the pipelineand will pay fair market value for those rights. Payments to landowners for these rights willhave a significant economic impact on individual landowners and, potentially, communitieswhere these funds would be put back into the market.
Additionally, upon completion, the pipeline will result in an increase of an estimated $4.5million in annual tax revenue to state and local taxing bodies in Georgia.
These local benefits are, of course, in addition to those associated with meeting increasedfuel needs in east and coastal Georgia. As detailed above, the twelve counties through which the pipeline is proposed and the other counties in Georgia that border those twelve, have a 2014 population of 1,257,396 and are projected to grow to 1,803,191 by 2040, according to a 2010report by the Carl Vinson Institute. See Appendix 3. This 43% growth will likely increasecurrent fuel consumption in those counties by at least 43%.
The Palmetto Pipeline will be a tremendous benefit to Georgia citizens. It will provide anew and reliable source of motor fuel and it will significantly reduce the potential of motor fuelshortages in coastal Georgia. This new source will also provide a competitive market for motorfuel. No one can confidently predict the future price of gasoline, but competition is the life blood of the free market system and has proven time and time again to reduce prices toconsumers. The cost of the pipeline will be borne solely by Palmetto. The residents of coastalGeorgia will pay nothing for this major infrastructure investment.
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G. ENVIRONMENT AND SAFETY
The route identified by Palmetto will cause minimal adverse environmental impacts, andas compared to other modes of transporting petroleum products, pipelines are recognized as notonly the most cost-effective but also the safest mode of transportation. These issues are not thesubject of the GDOT process but will be fully addressed.
1. Environmental Issues
A number of federal and state agencies will be involved in the review and approval of theenvironmental impacts of the project, including the U.S. Army Corps of Engineers (COE) andthe Georgia Environmental Protection Division (EPD). After, and separate from, GDOT’s process, the project will undergo a review that will address environmental protection andmitigation relating to project siting, permitting, construction and operation, among other issues.
As required by Georgia law, any proposed petroleum product pipeline must undergo anenvironmental review by EPD, which occurs subsequent to GDOT’s issuance of the certificate
of convenience and necessity. See O.C.G.A. §22-3-84(a). Palmetto will ask EPD to determine,after notice to affected landowners and a public hearing, that the location, construction, andmaintenance of the Georgia portion of the Palmetto Pipeline is consistent with and not an unduehazard to the environmental and natural resources of Georgia. See O.C.G.A. §22-3-84(b)(4). Inmaking that decision, the EPD Director will determine whether the Georgia portion of the pipeline route is “an environmentally reasonable route,” whether existing utility corridors mayreasonably be used for the pipeline, and whether the project will comply with any local zoningordinances (unless compliance would impose an unreasonable burden on the project, as weighedagainst the purpose of the zoning ordinances in question). O.C.G.A. §22-3-84(c). Prior toissuing the permit, EPD will also need to assure that ample opportunity has been afforded for public comment, including comments from the municipalities and counties in which the pipeline
will be located. Id.
Rules adopted by the Board of Natural Resources further explain the procedures andrequirements applicable to EPD’s consideration of a petroleum pipeline. Ga. Comp. R. and Regs.r. 391-3-23-.01, et seq (hereinafter “r. 391-3-23-.01”). The application for the permit mustinclude an Environmental Effects Report, comparable to the reports required under the GeorgiaEnvironmental Policy Act, which must be prepared and signed by a professional engineer or a professional geologist. See r. 391-3-23-.07(2). The Environmental Effects Report must include,among other items, a copy of GDOT’s Certificate of Public Convenience and Necessity, routemaps, a description of the proposed project, background data on engineering or environmentalstudies used by the pipeline company, and a proposal to monitor the effects of the pipeline on the
surrounding environment. See r. 391-3-23-.07(2). The rules further provide for public notice, a public hearing, and an opportunity for written comments on the proposed pipeline. See r. 391-3-23-.07(4).
Palmetto will not be legally authorized to exercise the right of eminent domain until EPDhas issued the required permit, unless EPD fails to approve or deny the permit within 120 days ofthe date of publication of the public notice of the EPD permit application. See O.C.G.A. §22-3-84. Moreover, EPD can impose reasonable conditions on the permit to require monitoring of the
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effect of the pipeline on the surrounding environmental and natural resources. See O.C.G.A.§22-3-84(c); r. 391-3-23-.07(7).
In addition to the EPD petroleum pipeline-specific permit, the project must comply withrequirements for other site-specific environmental permits. Palmetto expects to apply for permits from the COE pursuant to Section 404 of the Clean Water Act and Section 10 of theRivers and Harbors Act, and Palmetto will comply, as appropriate, with the general permit forthe discharge of stormwater during construction. Where stream buffers apply, Palmetto willfollow applicable standards and procedures.
The pipeline will be constructed to avoid, to the extent practicable, any adverse impactsto rivers and creeks along the route, and the pipeline will not cross over or through any rivers orstreams. The pipeline will be buried four feet below ground surface in most areas along theroute; however, as the pipeline approaches a river or stream, the construction team will usehorizontal directional drilling to install the pipeline well below the bottoms of all rivers andstreams, thereby protecting both waters and stream buffer areas.
The company is also working to minimize impacts to wetlands along the proposed pipeline route. Palmetto’s expert wetlands consultants are marking and measuring the wetlandsalong the route, and all wetlands will be identified in the application that will be filed with theCOE for a Section 404 permit. The wetland impacts will also be addressed in the EnvironmentalEffects Report that will be submitted to EPD.
2. Pipeline Safety Issues
It is well understood that pipelines are the safest mode of transportation to deliver products such as gasoline, jet fuel and diesel. “Pipelines Are Safest for Transportation of Oiland Gas,” Diana Furchtgott-Roth, Manhattan Institute for Policy Research (June 23, 2013).
Palmetto’s parent company, Kinder Morgan, is one of the safest pipeline operators in North America, recognized industry-wide as a leader in emergency preparedness, incidentresponse and integrity management for its pipeline network. Kinder Morgan consistently performs better than its industry peers in almost all safety and release-related measures.
Palmetto will follow the company’s required specifications regarding installation of state-of-the-art pipeline and will adhere to company protocols to regularly monitor, test and inspectthe mechanical and operational integrity of the pipeline.
• Pipe Materials – The pipeline will be made of high strength steel, with all joints
carefully welded, pressure tested, and inspected before being put into use, andwill be cathodically protected, which is the best method to protect againstcorrosion in underground pipelines. The Federal standard is to inspect 10% of thewelds, but Palmetto will inspect every weld on the Palmetto Pipeline.
• Monitoring – Palmetto will monitor its pipeline operating conditions 24 hours aday, 7 days a week, in control centers using sophisticated computer systems. Ifoperating conditions change, the operators on duty will be alerted and will
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investigate immediately. Automated and manual valves will be placed along the pipeline system to enable immediate shutdown if necessary.
• Emergency preparedness measures will be put into place and Palmetto will workclosely with local emergency response organizations on how to respond in the
event of an emergency.
• All petroleum pipelines are under the regulatory oversight of the U.S. DOTPipeline and Hazardous Materials Safety Administration.
3. Highway Safety Issues
At least 80% of the motor fuel in the 23 East and Coastal counties is delivered to thewholesale and retail outlets by 10,000 gallon capacity tanker trucks that can handle maximumloads of 8,800 gallons of gasoline or 7,500 gallons of diesel. As a result, it takes 198 truck-loadsof motor fuel and 198 return trips, 365 days per year, to serve these counties. Without this pipeline, it will take 43% more truck trips in 2040.
The Savannah area alone has about 15,000 bpd of motor fuels trucked to it from Maconand North Augusta. (About 5,000 bpd may get to the Savannah area by marine vessel.) These15,000 barrels per day require 74 truck trips per day, or about 27,000 trips per year and 7.8million highway miles per year by truck. If the Palmetto Pipeline replaces just half of the current15,000 bpd of fuel trucked to the Savannah area, it will eliminate 13,500 tanker truck trips and3.9 million miles driven by those trucks annually.
The pipeline will significantly reduce the number of truck miles driven to get fuel tocustomer outlets. A new pipeline terminal near Savannah will put at least 17 Southeast Georgiacounties closer to a pipeline sourced terminal than they are now, which will reduce tanker truck
miles driven. A terminal at Jacksonville will put at least 7 other Southeast Georgia countiescloser to a pipeline sourced terminal.
Fewer truck miles driven means lower probability of traffic accidents, decreased trafficcongestion, and less wear and tear on Georgia’s highways.
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H. EASEMENTS AND EMINENT DOMAIN
Palmetto is not seeking a fee interest in the property along the right of way. Palmetto willseek permanent easements of 50 feet and additional temporary easements of up to 75 feet toallow for construction of the pipeline. Because Palmetto is seeking only easements (not feeinterests), landowners will retain rights to the property. In fact, with regard to the area of anytemporary easement, any and all rights to that property will revert to landowners once the pipeline is constructed. With respect to the permanent easement, landowners will continue toenjoy the use of that land, often precisely as it is projected to be used as if the pipeline was not built.
Furthermore, all landowners will be given fair market value for any temporary and permanent easement interests required in connection with this pipeline. Palmetto has alreadyengaged expert appraisers to evaluate the market value of property impacted by the proposed pipeline. Negotiations with landowners will be informed by the results of appraisal studies, andwill be further guided by information landowners provide regarding their property. Palmetto willnegotiate in good faith with landowners and will take landowners’ concerns and perspectives
into account in order to make reasonable and appropriate offers.
In an attempt to minimize impacts on landowners as much as possible, Palmetto hascollocated the pipeline’s proposed route along existing pipeline, utility or railroad rights of waywhenever possible. Georgia law requires that a petroleum pipeline route should use existing public utility corridors as much as can reasonably be done, and approximately 86 percent of the pipeline route in Georgia runs directly alongside existing utility or railroad easements.
Palmetto will make every effort to secure the needed easements by agreements andanticipates, based on previous experience, that most easements will be acquired throughnegotiation. However, Palmetto has begun the process of securing approval for this project so
that it has the ability to exercise the power of eminent domain for those landowners that will notaccept reasonable offers to transfer the property interests necessary to construct this important project. Many different types of utilities in Georgia have the power of eminent domain incircumstances like this one, where that power is necessary to create infrastructure that provides a public good. Such utilities include publicly owned or privately owned lines or systems for producing or distributing:
• Communications• Electricity• Natural Gas• Petroleum products• Water and wastewater
• Rail service.
The Georgia General Assembly has authorized many types of for-profit companies toexercise the power of eminent domain in Georgia. However, there are significantly more stateimposed requirements for petroleum pipeline companies to meet than there are for any other publicly or privately owned utility which wants to use eminent domain. No other type of publicutility is required to apply for and receive a certificate of necessity and convenience from GDOT.
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No other type of public utility is required to develop what amounts to an environmental impactstatement and get a project specific permit from Georgia EPD.
The statements made in the public comment period on the route of the proposed PalmettoPipeline indicate that some landowners are not willing to enter into agreements for easements.
Therefore, the use of eminent domain, although not preferable, may be necessary for this project.
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I. RESPONSES TO FREQUENTLY ASKED QUESTIONS
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Palmetto Pipeline Project
Georgia Frequently Asked Questions:
May, 2015
Project Overview
1.
What is the Palmetto Pipeline and where will it be located?
Kinder Morgan is proposing the Palmetto Pipeline, which will allow the company to offer a new service to
move refined petroleum products from Baton Rouge, Louisiana, Collins and Pascagoula, Mississippi, and
Belton, South Carolina, to North Augusta, South Carolina, Savannah, Georgia, and Jacksonville, Florida. The
new 360-mile pipeline from Belton to Jacksonville will be constructed as part of the project.
The proposed Palmetto Pipeline will cross through the following counties in Georgia: Bryan, Burke,
Camden, Charlton, Chatham, Effingham, Glynn, Liberty, Long, McIntosh, Richmond and Screven.
2.
What is the capacity of the proposed Palmetto Pipeline and what will it carry?
The proposed Palmetto Pipeline would carry 150,000 barrels per day (bpd), with an ultimate capacity of
167,000 bpd. The pipeline would carry refined petroleum products such as gasoline, diesel fuel, jet fuel
and ethanol.
3.
What is the timeline for this proposed project?
The final route selection and development of the environmental permit application is planned for the
summer of 2015. We plan to begin construction in the spring of 2016, and we have a targeted in-service
date of July 2017.
The Need for the Pipeline
1.
Why is the Palmetto Pipeline needed?A.
Meet Growth in Fuel Needs
Over the next 25 years, Georgia’s population will grow by about 49 percent, and the population of
the 12 counties on the pipeline route, plus their 11 neighboring counties in Georgia, will grow by
about 43 percent. These 23 counties (and others) will benefit from being able to receive gasoline
and diesel fuel from the Palmetto Pipeline. Motor fuel use will closely track population growth,
even with expected improvements in car and truck fuel efficiency. Thus, those 23 East and Coastal
Georgia counties will need about 43 percent more motor fuel by 2040.
B. Capacity Expansion and Choice
The 23 East and Coastal Georgia counties used 778 million gallons of motor fuel in 2014, or 50,000
bpd, not counting the large quantities of motor fuels used at Fort Gordon, Fort Stewart and HunterArmy Air Base. By 2040 these counties will be using about 72,000 bpd. East and Coastal Georgia
are pipeline-constrained, since existing petroleum pipelines deliver fuel only to Macon and North
Augusta. Palmetto will provide the first direct petroleum pipeline to Savannah and to Jacksonville,
and will supplement the North Augusta pipeline capacity. Some fuel is brought by ship to
Savannah and Jacksonville, but the vast majority of the fuel used in Coastal Georgia is brought
there by truck. Palmetto will provide infrastructure needed for the continued healthy growth of
East and Coastal Georgia.
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C.
Highway Safety
At least 80 percent of the motor fuel in the 23 counties is delivered to wholesale and retail outlets
by 10,000 gallon tanker trucks that can handle maximum weight limits of 8800 gallons of gasoline
or 7500 gallons of diesel. As a result, it takes 198 truckloads of motor fuel and 198 return trips
daily, 365 days per year, to serve the needs of these counties. Without the pipeline, it will take 43
percent more trips in 2040. The pipeline will significantly reduce the number of truck miles driven
to get fuel to customer outlets. A new pipeline terminal near Savannah will put at least 17
Southeast Georgia counties closer to a pipeline terminal than they are now, which will reduce
tanker miles driven. A pipeline terminal at Jacksonville will put at least 7 additional Georgia
counties closer to a pipeline sourced terminal. Fewer truck miles driven means lower probability
of traffic accidents and less wear and tear on Georgia’s highways.
D.
Lower Transportation Costs
Pipeline transport is the most cost efficient way to move large quantities of motor fuel. Trucking
fuel from Baton Rouge to Savannah costs about 30 cents per gallon. The cost of marine transport
for a gallon of fuel from Baton Rouge to Savannah costs about 50 percent less. The cost to send a
gallon of fuel from Baton Rouge to Macon or North Augusta by pipeline, then truck it to Savannah,
is about 36 percent less than marine transport. The cost to send a gallon of fuel from Baton Rouge
to Savannah by pipeline is about 25 percent less than the current method of pipeline plus trucking.
E. Competition
As a general proposition, additional sources of supply will lower motor fuel prices. There is
currently only one independent supplier to the Savannah area (a vocal opponent of this project),
and the free enterprise system has demonstrated over and over that competition reduces prices
and/or increases choices. The market will support as many suppliers as needed to provide good
service at a reasonable rate. Note: Palmetto will not own any of the fuel transported in the
pipeline and will not set the price of gasoline or diesel at the pump. Therefore it has no ability to
raise or lower fuel prices.
2.
Where will product be delivered from the Palmetto Pipeline?Delivery points from Palmetto will be North Augusta, the Savannah area and Jacksonville. The disposition
of product is up to Palmetto’s shippers, and shippers will designate products based on market demand.
It’s reasonable to assume that some of the product delivered to North Augusta will serve east and north
Georgia, product delivered to Savannah will primarily serve the Georgia coastal area, and some of the
product delivered to Jacksonville will serve southern Georgia. In general, as supply sources proliferate,
prices decrease to the consumer.
3.
Where will terminals be located for the Palmetto Pipeline?
Terminals will be located in North Augusta, the Savannah area (Richmond Hill) and Jacksonville.
4.
How many barrels per day will be offloaded for delivery to local customers at the various terminals?
Estimates for Palmetto destinations are as follows:
• North Augusta area: 40,000-50,000 bpd
• Savannah area: 20,000-25,000 bpd
• Jacksonville area: 70,000-80,000 bpd
5. The pipeline begins in South Carolina and ends in Florida - what percentage of the product will Georgia
have for its benefit?
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Kinder Morgan estimates that at least 50-60 percent of the pipeline capacity will transport refined
products to consumers in the Augusta and Savannah areas. Additionally, the close proximity of Jacksonville
(the third terminal market for Palmetto Pipeline) to coastal Georgia communities suggests that additional
product shipped through the Palmetto Pipeline will ultimately enter markets in southern Georgia.
Palmetto's shippers will determine the ultimate destinations for products transported on the Palmetto
Pipeline.
Local Benefits of the Pipeline
1.
How would construction of the Palmetto Pipeline benefit surrounding areas?
Construction of the Palmetto Pipeline would generate approximately 1,200 temporary construction jobs at
its peak. The economic impact of construction will be significant as workers will rely upon local businesses,
housing and support services during construction.
Additionally, upon completion, the pipeline will result in an increase of an estimated $4.5 million in annual
tax revenue to state and local taxing bodies in Georgia.
Moreover, Palmetto will pay landowners along the route the fair market value of any property necessary
to construct and operate the pipeline. These payments will benefit landowners and cause an influx ofdollars into local economies.
These benefits are in addition to the fact that the proposed pipeline would help meet increased fuel needs
in East and Coastal Georgia. The twelve counties through which the pipeline is proposed and the other
counties in Georgia that border those twelve, have a 2014 population of 1,257,396 and are projected to
grow to 1,803,191 by 2040. This 43 percent growth will likely increase current motor fuel consumption in
those counties by at least 43 percent.
2. Will Kinder Morgan hire local individuals to build the pipeline?
Kinder Morgan will hire pipeline construction contractors to build the Palmetto Pipeline. These
construction firms generally hire local labor to augment their crews. Also, the contractors will have apositive impact on the local economy with their local purchases of goods and services such as meals,
lodging, fuel, and construction materials.
3. Does Kinder Morgan already have existing petroleum pipelines in the region?
Yes, Kinder Morgan owns and operates the Plantation Pipe Line Company (Plantation) in the Southeast
region. Plantation is one of the largest refined petroleum products pipelines in the United States. It
delivers approximately 700,000 bpd of gasoline, jet fuel, diesel and biodiesel through its 3,100-mile
network. Plantation connects to 90 delivery terminals throughout eight states which are owned by
petroleum refiners, marketers, and military and commercial fuel users. Plantation was founded in 1940
and its headquarters are in the Atlanta area. The existing Plantation pipeline currently has extensive
operations in Georgia, and the proposed Palmetto Pipeline would allow access to markets in coastal
Georgia as well.
4.
Does Kinder Morgan have an existing presence in Georgia?
Yes, Kinder Morgan is proud to have extensive existing infrastructure in Georgia. Kinder Morgan is no
stranger to operating assets safely and efficiently in this State.
• Kinder Morgan operates more than 3,000 miles of natural gas and petroleum products pipelines
throughout 85 counties in Georgia. Kinder Morgan also operates five terminals in Georgia. In
2014, Kinder Morgan employed 330 Georgians and maintained a payroll of over $28 million.
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• In 2014, Kinder Morgan paid over $15.8 million to state and local taxing bodies.
Environmental and Safety Concerns
1.
What state/federal agencies are involved in approving this project?
A number of federal and state agencies will be involved in the approval and oversight of the project,
including the Federal Energy Regulatory Commission (FERC), the U.S. Army Corps of Engineers the Georgia
Department of Transportation, and the Georgia Environmental Protection Division. The project will
undergo a careful review, which will address environmental protection and mitigation relating to project
siting, permitting, construction and operation, among other issues.
As part of the process, following a review of Palmetto’s application and the associated facts regarding this
project, the FERC issued an order on May 1, 2015 granting Palmetto’s petition and concluding that the
project was consistent with FERC precedent: “The Commission finds that the rates, and terms and
conditions of service offered to the potential committed shippers during the open season are consistent
with the ICA and Commission precedent.”
2.
What kinds of safety features will the Palmetto Pipeline feature to prevent leaks and/or environmental
damage?It is very important that people understand that pipelines are the safest mode of transportation to deliver
products such as gasoline, jet fuel and diesel. Furthermore, Kinder Morgan’s spill rate is one-third of the
industry’s average. Overall, our operational performance was better than our industry peers in 35 out of
36 environmental, health and safety measures in 2014.
We are proud to say that Kinder Morgan is one of the safest asset operators in North America, recognized
industry-wide as a leader in emergency preparedness, incident response and integrity management for our
pipeline network.
Every day, Kinder Morgan follows numerous procedures to regularly monitor, test and inspect the
mechanical and operational integrity of our pipelines. Activities include monitoring operating conditionsaround the clock, using electronic surveillance systems that gather data such as pipeline pressures, volume
and flow rates, placing automated and/or manual valves at strategic locations to isolate sections to shut
down the pipeline when needed, and conducting visual and internal inspections regularly. Most
importantly, if an incident does occur, we take swift and appropriate action with local, state and federal
emergency responders and work diligently to remedy the situation in a responsible manner.
3.
Will the Palmetto Pipeline follow existing power line and utility corridor rights-of-way?
In an attempt to minimize impacts on property in the area as much as possible, Kinder Morgan has
collocated approximately 86 percent of the Palmetto Pipeline’s proposed route in Georgia along existing
pipeline, utility or railroad rights-of-way. Georgia law requires that a petroleum pipeline route should use
existing public utility corridors as much as can be reasonably done, and Kinder Morgan will do so. It is not
possible to stay completely along the existing corridors due to development that has occurred since the
corridor was first established and other operational or local environmental constraints. Deviations from
the existing corridor, where necessary, will make the pipeline safer and less intrusive.
4. Where along the Savannah River is the proposed pipeline planning to cross? Is it safe for the pipeline to
run along the Savannah River?
The Palmetto Pipeline’s proposed crossing of the Savannah River is south of Augusta, near the community
of Jackson, South Carolina. The vast majority of the line will be several miles away from the Savannah
River. That is the most reasonable route, considering that Kinder Morgan needs to be along existing utility
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corridors and wants to keep the length of the pipeline as short as possible. State and federal
environmental laws and rules will adequately protect the Savannah River and all other streams and
wetlands on the pipeline route.
5.
How will rivers and creeks in the vicinity of the proposed pipeline be protected during construction and
once the pipeline is in operation?
Rivers and creeks in the vicinity of the pipeline will be protected in several ways: construction methods,
pipeline materials, safety programs, and monitoring.
• Construction Methods – The pipeline will not cross through any stream. The pipeline will be
buried four feet below ground surface in most areas. But near streams, Kinder Morgan’s
construction team will use horizontal directional drilling to construct the pipeline well below the
bottoms of all rivers and streams, to help protect both the streams and the sensitive stream
buffer areas.
• Pipe Materials – The pipeline will be made of high strength steel, with all joints carefully welded,
pressure tested and inspected before being put into service, and it will be cathodically protected,
which is the best method to protect against corrosion in underground pipelines. Federal standards
require x-ray inspection on 10% of all welded joints in oil and gas pipelines, but on the Palmetto
Pipeline 100% of all welded joints will undergo x-ray inspection.
• Monitoring – Kinder Morgan monitors its pipeline operating conditions 24 hours a day, 7 days a
week in control centers using sophisticated computer systems. If operating conditions change, the
operators on duty are alerted and will investigate immediately. Automated and manual valves are
placed along the pipeline system to enable immediate shutdown if necessary.
• Emergency preparedness measures are in place and Kinder Morgan works closely with local
emergency response organizations on how to respond in the event of an emergency.
• All petroleum pipelines are under the regulatory oversight of the U.S. DOT’s Pipeline and
Hazardous Materials Safety Administration.
6.
It has been stated by some organizations that “The vast majority of the pipeline from Savannah to
Jacksonville is going to be built in wetlands.” Is that correct?
No, it is not correct. Certainly there are numerous areas of wetlands along the proposed pipeline route,
and the company is working to minimize impacts to those wetlands. We are still doing the measurements
in the field, but we believe that about 29 percent of the pipeline route in Georgia will cross waterways or
wetlands. As explained above, our plan is to bore under all rivers and streams, thereby avoiding or
minimizing adverse impacts in those areas. All wetlands will be identified in the permit application we will
file with the Corps of Engineers. The wetlands impacts will also be addressed in the Environmental Effects
Report that we will file with the Georgia EPD to support our environmental permit application.
Other Concerns/Questions
1.
In Georgia, how does a for-profit company get eminent domain powers? What are the requirements for
obtaining eminent domain powers in Georgia?
The Georgia General Assembly has adopted laws allowing public utilities to have the power of eminent
domain to provide services for the public good. Public utilities include publicly owned or privately owned
lines or systems for producing or distributing:
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• Communications
• Electricity
• Natural Gas
• Petroleum products
• Water and wastewater
• Rail service
The Georgia legislature has made it possible for many kinds of for-profit companies to obtain eminent
domain power in Georgia. However, there are significantly more state imposed requirements for
petroleum pipeline companies to meet than there are for any other publicly or privately owned utility that
wants to use eminent domain. No other type of public utility is required to apply for and receive a
certificate of public convenience and necessity from Georgia DOT. No other type of public utility is
required to develop what amounts to an environmental impact statement and obtain a project specific
permit from Georgia EPD.
2. If I am an impacted landowner, will the state government allow my land to be seized to build the
pipeline?
No, there is no seizure involved. State law allows a pipeline company to use eminent domain to acquire
easements for a petroleum pipeline, but only if Georgia DOT issues a certificate of necessity andconvenience for the pipeline, and if Georgia EPD issues a pipeline permit after considering the likely
environmental effects. If these two state approvals are issued, then Palmetto can use eminent domain in
cases where it is not able to negotiate an agreement with a landowner to purchase an easement or find a
workable alternative for the pipeline route . Eminent domain will not be needed in the vast majority of
easement acquisitions, and even when it must be used, the law requires notice to landowners and affords
landowners an opportunity to present their views regarding the process, and the landowner will be paid
fair market value as determined by an independent appraiser. Palmetto will make every attempt to
negotiate with landowners to arrive at a mutually agreed upon easement before the use of eminent
domain is even considered. Palmetto prefers not to use eminent domain.
3.
If I am an impacted landowner, what can I do with my land if I grant an easement to Palmetto or if aneasement is obtained through eminent domain?
The landowner will retain ownership of the property. Pipeline easements are compatible with many
agricultural and other uses.
4.
Will the products transported by the Palmetto Pipeline be exported?
No, all of the product transported through Palmetto Pipeline will be for consumption in markets in the
southeastern United States. None of the proposed terminals in North Augusta, the Savannah area and
Jacksonville are export terminals. The Palmetto Pipeline has been designed to provide transportation
service from the Gulf Coast refineries to these market centers and no further. Considering that the Gulf
Coast refineries where products transported through the Palmetto Pipeline will originate have marine
export capabilities, it would be not be economical to transport product to North Augusta, Savannah or
Jacksonville for export outside of the United States.
5.
Why does gasoline cost more at the pump in Savannah than in Macon and other places?
The answer to this question was explained by Colonial Oil, currently the primary supplier of oil in the
Savannah area, as reported by the Savannah Morning News on April 7, 2013:
“Many Savannah residents complain that gas prices are lower in other Georgia cities, such as Atlanta and
Macon, and they're correct, said Ryan Chandler, vice president of business development at Colonial Group
Inc.
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‘The reason for the lower prices is that those markets have access to a pipeline supply direct from the U.S.
Gulf Coast,’ he said. ‘Savannah is forced to pay what amounts to a Jones Act penalty to bring gasoline and
diesel in from the Gulf Coast, and that's only if there are ships available to carry the cargo,’ Chandler said.
‘When Jones Act ships aren't available, Colonial is forced to import gasoline and diesel from foreign
markets to meet Savannah's needs, which frankly can't compete with pipeline economics plus truck freight
to Savannah.’”
7DMSLIBRARY01:25576065.1
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J. APPENDICES
1. Officials and Others Receiving Supplemental Data
2. Route map – .kmz (Google Earth) file
3. 2010 Vinson Institute Study
4. May 1, 2015 FERC Order
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OFFICIALS AND OTHERS RECEIVING SUPPLEMENTAL DATA ON THE PALMETTO PIPELINE
Augusta-Richmond County (2 miles)
Hardie Davis - Mayor of Augusta - 706.821.1831; [email protected]
Susan Parr, President/CEO - Augusta Metro Chamber of Commerce - 706.821.1300; [email protected]
Sen. Harold Jones - District 22; [email protected]
Sen. Jesse Stone - District 23 - [email protected]
Sen. Bill Jackson - District 24; [email protected]
Rep. Barbara Sims - District 123; [email protected]
Rep. Wayne Howard - District 124; [email protected]
Rep. Brian Prince - District 127; [email protected]
Burke County (25 miles)
Pauline Jenkins - Mayor of Waynesboro - 706.554.8017; [email protected]
R. Wayne Crockett - Chair - 706.554.2324
PO Box 724, Waynesboro, GA 30830
Cam Parker, President - Burke County Chamber of Commerce - 706.554.5451
241 East 6th Street, Waynesboro, GA 30830
Sen. Jesse Stone - [email protected]
Rep. Gloria Frazier - [email protected]
Screven (30 miles)
Margaret Evens - Mayor of Sylvania - 912.564.7411; [email protected]
William Boyd - Chair - 912.564.7535
PO Box 159, Sylvania, GA 30467-0159
Latasha Roberts, Ex. Dir. - Sylvania Screven County Chamber of Commerce - 912.564.7878; [email protected]
Sen. Jesse Stone - [email protected]
Rep. Jon Burns - [email protected]
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Effingham County (39 miles)
Barton Alderman - Mayor of Springfield - 912.754.6666
City of Springfield, PO Box 1, Springfield, GA 31329
Wendell Kessler - Chair - 912.754.2123
601 North Laurel Street, Springfield, GA 31`329
Sen. Jack Hill - [email protected]
Rep. Jon Burns - [email protected]
Rep. Bill Hitchens - [email protected]
Chatham County (12 miles)
Edna Jackson - Mayor of Savannah - 912.651.6441; [email protected]
Al Scott - Chair -912.652.7875
PO Box 8161, Savannah, GA 31412
William W. Hubbard - President & CEO - Savannah Area Chamber of Commerce - 912.644.6421
101 E Bay Street, PO Box 1628, Savannah, GA 31402
Sen. Ben Watson - [email protected]
Sen. Lester Jackson - [email protected]
Rep. Bill Hitchens - [email protected]
Rep. Bob Bryant - [email protected]
Rep. Craig Gordon - [email protected]
Rep. Ron Stephens - [email protected]
Rep. Mickey Stephens - [email protected]
Rep. Jesse Petrea - [email protected]
Bryan County (7 miles)
Mary Warnell - Mayor of Pembroke - 912.653.4413; [email protected]
James Burnsed - Chair - 912.653.3837
PO Box 430, Pembroke, GA 31321
Sen. Ben Watson - [email protected]
Rep. Jan Tankersley - [email protected]
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Liberty County (18 miles)
James Thomas - Mayor of Hinesville - 912.876.3564
City of Hinesville, 115 East M.L. King, Jr. Drive, Hinesville, GA 31313
Tom Ratcliff - [email protected]
Donald Lovett - Chair - 912.876.2164
PO Box 829, Hinesville, GA 31313
Leah Poole, CEO - Liberty County Chamber of Commerce - 912.368.4445; [email protected]
Sen. Ben Watson - [email protected]
Rep. Al Williams - [email protected]
Long County (2 miles)
James Fuller - Mayor of Ludowici - 912.545.2732
PO Box 800, Ludowici, GA 31316-0800
Dwight Gordon - Chair - 912.545.2143
PO Box 476, Ludowici, GA 31316
Sen. Tommie Williams - [email protected]
Rep. Jeff Jones - [email protected]
McIntosh County (17 miles)
Hugh Hodge - Mayor of Darien - 912.437.6686
c/o City of Darien, PO Box 452, Darien, GA 31305
Kelly Spratt - Chair - 912.437.6671
PO Box 584, Darien, GA 31305
Darien-McIntosh County Chamber of Commerce - 912.437.6684
PO Box 1497, Darien, GA 31305
Sen. William Ligon - [email protected]
Rep. Jeff Jones - [email protected]
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Glynn County (24 miles)
Cornell Harvey - Mayor of Brunswick - 912.267.5500; [email protected]
Dale Provenzano - Chair - 912.554.7400; [email protected]
Woody Woodside, President - The Brunswick-Golden Isles Chamber of Commerce - 912.265.0620; [email protected]
Sen. William Ligon - [email protected]
Rep. Alex Atwood - [email protected]
Camden County (18 Miles)
Steven Parrott - Mayor of Woodbine - 912.576.3211; [email protected]
James Starline - Chair - 912.576.5651; [email protected]
Sen. William Ligon - [email protected]
Rep. Jason Spencer - [email protected]
Charlton County (12 miles)
Lee Gowen - Mayor of Folkston - 912.496.2563; [email protected]
James Everett - Chair - 912.496.2549
68 Kingsland Drive, Suite B, Folkston, GA 31537-2872
Dawn Malin, Executive Director - Okefenokee Chamber of Commerce - 912.496.2536
3795 Main Street, PO Box 756, Folkston, GA 31537
Sen. William Ligon [email protected]
Rep. John Corbett - [email protected]
DOT Board - District 1
Ann Purcell - 912.663.8128; [email protected]
DOT Board - District 2
Johnny Floyd - 229.273.5312; [email protected]
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DOT Board - District 3
Sam Welborn - 706.615.0965; [email protected]
DOT District 4
Robert L. Brown, Jr. (Secretary) - 404.377.2460; mailto:[email protected]
DOT Board - District 5
Stacey Key - 404.310.5040; [email protected]
DOT Board - District 6
Mark Burkhalter - 404.527.4156; [email protected]
DOT Board - District 7
Rudy Bowen - 404.317.3310; mailto:[email protected]
DOT Board - District 8
OPEN (Jay Shaw)
DOT Board - District 9
Emily Dunn (Vice Chairman) - 706.632.5000; [email protected]
DOT Board - District 10
Jamie Boswell - 706.546.8100; [email protected]
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DOT Board - District 11
Jeff Lewis - 770.382.4411; [email protected]
DOT Board - District 12
Don Grantham (Chairman) - 706.738.7786; [email protected]
DOT Board - District 13
Dana Lemon - 770.490.9125; [email protected]
DOT Board - District 14
Roger Williams - 706.618.6029; [email protected]
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The University of Georgia
The Motor Use Fuel Tax in Georgia:Collection Efficiency, Trends, andProjections
Wes Clarke, Warren Brown, and Matt HauerCarl Vinson Institute of Government
University of Georgia
December 2010
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