Kinder Morgan says New Studies Show Economic Benefits to Palmetto Pipeline, Reaction

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Kinder Morgan Still Wants Pipeline Built (Image 1)_9834

The company pursuing the controversial Palmetto Pipeline Project is now armed with new economic studies it says proves the value of the project to three states, including Georgia.  “It’s validation for a lot of things we’ve been saying, i.e. that the project is going to be a big, economic boost for the area.” says Allen Fore of Kinder Morgan.

The company wants to build a 360 mile pipeline from South Carolina to Florida, with the majority of the project -220 miles passing through Georgia.  Kinder Morgan encountered a lot of local opposition to the plan. A group “Push Back the Pipeline” was formed and was integral in garnering public support against the project.  Last summer, Georgia’s DOT Commissioner refused to grant Kinder Morgan a certificate of need and necessity, something the company would need to use eminent domain. (That gives the company the right to take private land for the pipeline route in the case certain landowners would not agree to an easement.)  Kinder Morgan has appealed the DOT ruling and a decision from a Fulton County judge is expected soon.

Recently, a film produced on behalf of landowners has been playing in various local cities.  Producer Mark Albertin told us he spent months traveling the state and meeting landowners who do not want the project especially if it means the company could take their land for easements.  The film was funded by Landowners for Property Rights, Inc. Watch the film here.

But Fore says in recent months Kinder Morgan has been steadily moving forward and if it loses in court, will pursue the pipeline by working to get permission from all landowners along the right.  He also said Kinder Morgan is planning to apply for environmental permits soon from the state and federal governments.  He continues to say for the most part they have support from many landowners (along the entire route) at least in terms of allowing the company to survey.  Opponents like Savannah Riverkeeper Tonya Bonitatibus say the company has been paying landowners (and handsomely) for access to survey.  Fore said he couldn’t acknowledge the amount of payments or how many landowners have agreed to surveys because of privacy.

He was however very willing to talk about the company’s economic surveys which he says have produced independently although the company commissioned the surveys and paid for them.

Read the Florida pipeline report here.

Read the South Carolina report  here

Read the Georgia pipeline proposal here.The Georgia survey:

Done by Dr. Jeffrey Dorfman who is an economics professor at UGA.  Dorfman told us however he did the survey under the auspice of his own private consulting company.

He said total economic benefits from the Palmetto Pipeline would be “quite large.”

** $948 million in economic benefits (over 20 years) from construction and operation

** 5,397 jobs (during construction period)

** $46 million in new state and local tax revenues

** $828 million in fuel costs savings over 20 years

Dr. Dorfman’s study also said that an additional $2 billion would be saved over 20 years in terms of fewer fatalities due to less heavy truck traffic on the roads. (The premise being that more product would go through the pipeline and that would mean fewer trucks would be needed to haul diesel and gasoline which would result in fewer accidents.)

The $2 billion figure was the cost of 300 lives saved over the 20 year period (about $6 million per life.)

That figure raised a bit of a red flag for Savannah Riverkeeper Tonya Bonitatibus who said she had never heard of economic benefits calculated in those terms.  “That seems like a strange way to claim an economic argument,” she said.

Bonitatibus also said “They’re claiming to take 100 million truck miles off the roads every single year and the problem with that is that somebody is actually driving all those trucks.”

She says the construction jobs from the pipeline would be temporary but up to 800 permanent trucking jobs would be lost due to the pipeline construction.  She also said a study done some months ago and presented to the DOT argued that truck fatalities might not be reduced with a pipeline. She said “short truck trips” is where accidents ofter occur and short truck trips could increase with a pipeline in terms of hauling product from a local terminal to retail outlets, etc.

For her and others who oppose the project, the numbers don’t necessarily add up. “This is straight out of the Kinder Morgan cookbook,” said Bonitatibus.  “I can find these studies all over the United states. Kinder Morgan has done the same thing in every single one of its other projects. They come in with inflated numbers.”

Finally, she said any jobs provided from the construction would not only be temporary but perhaps not local since skilled pipefitters are required.

Dr. Dorfman told us that about half the jobs (2730) would be actually working on the pipeline while the rest (2668) would be supported by those working on the project.  He also said once built, there were be 47 permanent jobs from the pipeline.  Dorfman also told us that he did not include in his study any jobs that may be lost due to the pipeline project, i.e. trucking jobs as that was not the criteria for the study.  He said therefore any jobs that might be lost were not subtracted from the anticipated economic gains.  He did however tell me that while “some trucking jobs would be lost” it was not inevitable that all would be.The South Carolina survey:

Done byy the University of South Carolina Darla Moore School of Business.

**Total economic impact from all activities associated with construction of Palmetto Pipeline estimated at $452 million

**3138 construction jobs

**Economic multiplier of 1.7 (For every $100 spent by Kinder Morgan, the project would produce another $70 in economic activity..

** Cost savings in fuel of $86 million over 20 years

Joseph Von Nessen, a research economist from the school indicated they were compensated by Kinder Morgan.  He said it was not a policy paper but rather a baseline forecast of results if the project were constructed.  Von Nessen said that Kinder Morgan supplied its project data  but that the college used its own models of South Carolina’s economy in terms of the expected construction expenditures and anticipated gains from the project.

While some jobs would be “temporary” Von Nessen said jobs also said jobs are produced as a result of the ripple effect.  In terms of gas savings, he said current economic models were used to calculate savings across South Carolina. He said the study “did not” include the concept that more fuel efficient vehicles should be more readily available over the next 20 years which might result in less gasoline and diesel being consumed.

The idea of people using less fuel than anticipated in future projections is one Bonitatibus says is rarely brought up when Kinder Morgan. “They come through with some pretty outrageous claims that our use of gasoline is going to significantly increase in this area even though evidence clearly shows otherwise,” she said.

For Kinder Morgan’s Allen Fore, the surveys back up what the company has been saying all along. “That there is a need for the project from a supply perspective and that over the long term there’s going to be significant cost savings at the gas pump,” he told us.

But if the recent film is any sign, the company’s new analysis of economic benefits won’t change many minds, at least around here.

Watch the film here.

Read the Florida pipeline report here.

Read the South Carolina pipeline report here

Read the Georgia pipeline report here.

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