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Sunoco Pipeline is leaving a trail of litigation

In October, Kevin Clancy received a puzzling visit from a representative of Sunoco Pipeline L.P. at his house on Marydell Drive in East Goshen.

Marcellus ethane and propane to new tanks at Sunoco's old refinery in Marcus Hook.
Marcellus ethane and propane to new tanks at Sunoco's old refinery in Marcus Hook.Read moreCLEM MURRAY / Staff Photographer

In October, Kevin Clancy received a puzzling visit from a representative of Sunoco Pipeline L.P. at his house on Marydell Drive in East Goshen.

The representative, who worked for an engineering firm hired by Sunoco, wanted to survey Clancy's property. The company was considering building a pipeline at the rear of Clancy's suburban lot, next to an existing pipeline it operated beneath Boot Road.

Clancy, who had commissioned a title search on the property a few months earlier when his family bought the house, was unaware of any pipeline easement. He declined to sign.

Thus ensued an exchange of certified letters with Sunoco's attorneys, and Clancy ended up before a Chester County judge in March. Sunoco argued that it has the right to survey and potentially obtain an easement to his land because, as a public utility in Pennsylvania, it has eminent-domain authority.

"Sunoco is one of 10 places I can get gasoline for my car," said Clancy, a mechanical engineer. "It's not a public utility."

The legal dispute with Clancy is part of a cross-state effort by Sunoco Pipeline to build a system to transport natural gas liquids like propane and ethane from the Marcellus Shale formation to the Delaware River. Sunoco calls its project Mariner East.

Sunoco's venture is supported by powerful political and business interests, which argue that the Mariner project is a much-needed outlet for Marcellus products. But for many property owners along the 299-mile route, the pipeline is an unwelcome intrusion, and has created a trail of litigation.

Sunoco Pipeline, which is a different corporate entity from the familiar company that sells motor fuel, indeed has a long history operating as a public utility in the state. Chester County Common Pleas Court Judge Jeffrey Sommer allowed it to go ahead and survey Clancy's property.

But in York County, Common Pleas Court Judge Stephen P. Linebaugh dismissed a similar case. He ruled that Sunoco was regulated by the Federal Energy Regulatory Commission as a common carrier, which did not automatically confer eminent-domain rights as a Pennsylvania public-utility corporation.

Last week, Sunoco Pipeline appeared to be regrouping to settle the legal uncertainty, and it hired big law firms to take over critical cases.

A Blank Rome team that includes Michael L. Krancer, Gov. Corbett's former environment secretary, will take over a pending matter before the Pennsylvania Public Utility Commission. And Sunoco also retained Obermayer, Rebmann, Maxwell & Hippel to manage a contentious eminent-domain case in Washington County.

Sunoco's efforts have created much public confusion because its Mariner East pipeline project is proceeding on two parallel pathways.

Its immediate project, which Sunoco anticipates will begin operations later this year, involves building about 50 miles of new pipe between Houston and Delmont in Western Pennsylvania. It will connect to an eight-inch pipeline built in 1931 to carry petroleum products. The line will carry Marcellus ethane and propane to Marcus Hook, where the material will be sold locally or loaded onto ships for export.

Sunoco's proposal to build 17 pump stations along the pipeline route stalled in Chester County, where West Goshen residents objected to a zoning application for a pump station on Boot Road.

Sunoco last week withdrew the local zoning application and seems to be banking on getting a ruling from the PUC reinforcing its status as a public utility, exempt from local zoning restrictions.

Sunoco says its amended PUC application will seek to create an intermediate terminal for propane in Aston, Delaware County. Sunoco says it is changing its plans in response to the shipper interest to serve the local propane market. The move also buttresses Sunoco's argument that it really is a public utility.

Meanwhile, demand from Marcellus producers for ethane and propane shipments appears so strong that Sunoco last year began surveying a route to build an entirely new pipeline along the route of the Mariner pipeline.

That expansion project, called the Pennsylvania Pipeline, is tentatively scheduled to go online in 2016. It involves acquiring new rights of way, including, potentially, a piece of Clancy's backyard in East Goshen. It is also creating more anxiety along its route.

"Should we consider moving?" said Clancy. "Or should we stick it out?"