Citizens Pack Public Service Commission Chamber for Hearing on Mobile Oil Pipeline

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By Glynn Wilson

MONTGOMERY, Ala. — Citizens from the Gulf Coast and across the state descended on the Alabama Public Service Commission hearing room on the top floor of the imposing RSA tower in Montgomery on Wednesday to watch lawyers for a pipeline company and opposition groups argue the merits of a permit to build a new 2.4 mile stretch of a crude oil pipeline in Mobile on the sole basis of whether it furthers “industrial development” under state law. The company claims it is needed to replace an old existing pipeline that has problems.

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The RSA Union Tower

Members of the Mobile Bay Sierra Club, along with a coalition of activists fighting a rapid expansion of oil storage and transportation in Mobile operating under the name “Tar Sands Oil Mobile Citizens Coalition,” filled a charter bus paid for by Mobile doctor Ralph “Rip” Pfeiffer, who is interested in supporting the opposition to all the pipelines underway, at 5 a.m. in the Wal-mart parking lot.

Many residents of the area, including the doctor, became activated when Plains proposed a 40 mile-long pipeline right through the sole fresh drinking water reservoir, Big Creek Lake, for virtually all the residents of Mobile and surrounding communities leading to an oil refinery in Pascagoula, Mississippi.

Many of them took the long ride to Montgomery for a 10 a.m. public hearing that lasted about two hours to let the commissioners and the administrative law judge who oversees the legal proceedings know they are not happy with all the activities of the Plains pipeline company, which is operating under a host of subsidiary names from Plains Southcap to Plains Pipeline Marketing, Plains All-American and Plains Mobile Inc. Members of the Alabama Sierra Club from Montgomery and Birmingham were also in at attendance.

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Citizens wait on Alabama Public Service Commission to begin hearing on Mobile pipeline

Brenda Bolton, representing Tar Sands Oil Mobile, made the trip only to be denied standing, because Chief Administrative Law Judge John Garner ruled she did not submit in advance the names and addresses of property owners who would be directly affected by the new section of pipeline. The Center for Fair Housing was also denied standing because it was ruled the Africatown residents it represents, the Mobile Environmental Justice Action Coalition, were not directly impacted. Chippewa Lakes LLC, a real estate property management company that owns some of the land under which the existing pipeline runs, was granted standing and its attorney did most of the talking for the opposition.

A radical, right-wing activist with something called the Jobkeeper Alliance was also denied standing, along with the Gulf Restoration Network from New Orleans, Louisiana. The Mobile Bay Keeper group did not even attempt to intervene.

Members of the public without legal standing were not allowed to speak at the official public hearing, although the commission ceded to public pressure and held an informal public meeting to hear residents concerns in Mobile on Monday. To have standing requires a citizen to be directly affected personally by the proposal, like owning property in the direct path of the pipeline.

As the law stands, the commission does not consider the broader interests of the general public, like whether the pipeline is located in a hurricane flood zone and could cause as a catastrophe in critical wetlands if damaged in a major storm.

If the certificate is granted — and testimony indicated the PSC has never turned one down in its entire history since there’s rarely any opposition — the company plans to lay a 2.4 mile, 36-inch crude oil pipeline through the Africatown section of north Mobile, connecting to an existing pipeline through Eight Mile and other residential areas, where the oil will then be moved through other pipelines to refineries in other states.

The cost is estimated at $14.4 million to upgrade and reroute the pipeline ostensibly to make it safer, since the 40-year-old pipeline has quality “issues,” which might include “leaks” and “spills.” An attorney for the opposition was squelched by Judge Garner, who oversaw the proceedings and did most of the talking, from bringing such things as leaks and spills into the legal equation. The elected commissioners themselves said very little. Judge Garner indicated commissioners would not comment publicly while legal matters are pending before the PSC.

No decision was made on the certificate of industrial development at the hearing. The commission will take all the evidence into consideration and render a decision after a transcript is completed. State law requires an industrial development certificate from the commission to authorize a corporation to obtain rights of way by using condemnation as if it was an agent of the state. Critics say the law is corrupt and should be changed to allow for more transparent public input.

While industrial development certificates have never been the subject of much controversy over the years in Alabama, and they are normally granted without any fanfare as a matter of routine, the Public Service Commission has become the flashpoint in a series of controversies over power rates and oil pipelines.

The commission also barred all video and audio recording of the proceedings, claiming it is a legal body operating under the rules of courts in Alabama, which do not allow cameras in courtrooms. It is unclear that the RSA tower would fit the definition of a courthouse under state law, if challenged.

The current members of the PSC are Twinkle Andress Cavanaugh, a former aide to Republican Governor Bob Riley. She acts as president. Former state House representative Jeremy Oden, also a Republican, serves in Place 1. Terry Dunn, also a Republican with the Dunn Development Corporation and Dunn Investment Group who has held the state license in municipal utilities contracting for the past 25 years, serves in Place 2.

Jarrod White, an attorney representing Plains Mobile, argued that the new, rerouted pipeline would be safer and made the case that it furthers industrial development by employing maybe 40 people for two or three months.

“The new line will not be taken out of service for maintenance as frequently as the 40-year-old, existing line,” White said. “Also, there’s less risk of a failure that would require shutting down the existing line.”

In trying to make his case, White even hinted at one point that if the new pipeline is not permitted and built, that could also result in a sharp increase in the price of gasoline at the pump. That drew sighs and laughter from the audience.

Attorney Jessica MacDill, representing Chippewa Lakes LLC, a real estate property management company that owns some of the land under which the existing pipeline runs, argued that the company could upgrade the existing pipe along its current route without having to condemn more property. She said adding maybe 40 jobs for only two to three months is not much in the way of economic or industrial development.

In cross examination of another lawyer for Plains in Houston, Ashley Naumann, MacDill showed that the cost of upgrading the pipeline where it is would be the same as building a new pipeline.

MacDill argued the certificate should be denied because “furtherance of industrial development in this case is best served by maintenance, repair and upgrades to what Plains currently holds.”

Activists fear the plan is to use the system of pipes to transport heavy Canadian tar sands crude oil, making its way to Mobile by rail, through pipelines that do not have to be constructed explicitly for that purpose. The company dodges the question by saying these pipelines are “not constructed for tar sands oil.” But that is what is called in politics a non-denial denial. No federal or state regulations require the oil companies or pipeline companies to disclose or distinguish between types of oil they are pumping and shipping through communities across the United States.

Plains Southcap is still hung up in a legal wrangle with the Mobile Area Water and Sewer System over a pipeline that is scheduled to be constructed through the drinking water reservoir. Plains is attempting to have land owned by the water system condemned to complete the controversial pipeline. It has suffered construction delays because of allegations that the company is using substandard pipe. For a time the town of Semmes issued a stop work order until the issue could be resolved.

After the hearing, interested parties reacted to our questioning outside the commission chambers.

White denied that Plains has been using substandard pipe or out-of-state, non-union, possibly illegal immigrant labor in work on all the oil pipelines it controls in the Mobile area, in spite of allegations by pipe trade unions that picketed the company earlier this year.

“Plains complies with all federal and state laws and regulations,” White said.

David Underhill, conservation chair for the Mobile Bay Sierra Club and an executive committee member of the Alabama Sierra Club, pointed to the testimony of Naumann, who indicated the old pipeline could be shut down if a certificate is not granted to build the new one. That, she said, could be construed as a hindrance to industrial development by slowing the shipping of oil that keeps the oil tank farms in Mobile running.

“These are tank farms two feet above sea level,” Underhill pointed out. “If a storm or any other accident ruptures those tank farms, that will shut down shipping on Mobile Bay far more than the presence or absence of any pipeline. If they are going to consider the effect of a project on shipping in Mobile Bay to determine whether it contributes to industrial development, then they should consider the risks of huge tank farms on the waterfront that depend on this pipeline.”

In trying to prepare her arguments against the Plains pipeline, MacDill indicated she researched the issue of industrial development and did not come up with much in the way of legal definitions to guide the commission, an indication that there is room for creative legal arguments and conclusions to be drawn.

“The company lawyer tried to argue that industrial development equals spending money to put in a pipeline and hiring some temporary construction workers to keep a tank farm running on the waterfront in the hurricane storm surge zone,” Underhill said. “That’s industrial development? It takes no account of life in the river and bay that would be lost if some catastrophe occurs.”

“The Public Service Commission has the latitude to make it’s own decisions,” Underhill pointed out. “It is not restricted by precedent, by the law in Alabama. There is no definition in the law. Their decisions will construe the meaning of that phrase.”

© 2013, Glynn Wilson. All rights reserved.

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