Jim Beam Wanted More Natural Gas, But Didn’t Want To Pay For Bullitt Co. Pipeline
The makers of Jim Beam bourbon asked Louisville Gas and Electric to supply additional natural gas to expand operations at its flagship site in Clermont, but didn’t want to pay for a new gas pipeline, according to subpoenaed records from the bourbon maker.
A year later Louisville Gas and Electric went before utility regulators to ask for ratepayers to shoulder an estimated $27.6 million for the 12-mile-long natural gas pipeline. Jim Beam was not mentioned in that request.
The distillery’s role in the pipeline saga appeared in an eminent domain case Tuesday as LG&E attempts to acquire the remaining land necessary to build the underground pipeline through Bernheim Forest and local farms.
Attorney John Cox, who represents a landowner in the path of the pipeline, said the new details undermine LG&E’s claim that there is a public need for the new pipeline. As a result, Cox asked Bullitt County Circuit Court to dismiss the condemnation suit that would allow LG&E to seize a portion of his client’s property.
“When you have a singular customer who has the idea for the project, the question becomes is this for a public purpose or is this for a private purpose?” said Cox.
Jim Beam Expansion
Just last month, the James B. Beam Distilling Co. filled its 16 millionth barrel of bourbon since prohibition at the flagship site in Clermont, Kentucky. Beam Suntory, the company behind Jim Beam, produces bourbon for a number of brands in Bullitt County including Jim Beam, Basil Hayden’s and Knob Creek.
When the company began working on an expansion in 2015, Beam Suntory approached LG&E about an increased need for natural gas, according to a timeline assembled last June by Kevin Smith, vice president of public affairs for Beam Suntory.
According to the timeline, LG&E responded there wasn’t enough gas available on the current line. The utility then asked Beam Suntory to pay for a new pipeline at an estimated cost of $20 to $25 million, records show.
Beam rejected that proposal, according to the timeline.
The bourbon maker declined to comment on this story citing ongoing litigation, but it sent a prepared statement, originally received by WDRB, saying it was increasing its use of natural gas to reduce its carbon footprint.
“Jim Beam, along with thousands of other Bullitt County residents and businesses, is a customer of LG&E. As part of ongoing efforts to reduce our carbon footprint, and help to protect local water and the environment, and respond to increasing global demand for bourbon, we informed our natural gas provider of an anticipated increased need several years ago. We have not directed the planning or route of the proposed pipeline,” wrote Emily York, a spokeswoman for Beam Suntory.
Smith’s timeline goes on to say further meetings “determined that future growth in the Bullitt County area would require more gas than just our need and it made sense for LG&E to install a pipeline at their expense to support the need in Bullitt County.”
On July 2, 2019, LG&E announced the company’s existing natural gas distribution line in Northern Bullitt County was nearing full capacity. The utility warned it would soon be unable to accommodate new requests for residential and business customers.
Nearly three weeks later, Beam Suntory broke ground on a new distillery as part of a $60 million investment to “re-establish the James B. Beam Distilling Co. in Clermont.”
LG&E’s vice president of gas distribution testified before utility regulators in 2016 that a new gas pipeline would accommodate growth in the areas of Mt. Washington, Shepherdsville, Clermont, Boston and Lebanon Junction. He told regulators it would cost an estimated $27.6 million — more than $2 million higher than the estimate given to Beam Suntory.
Utility Spokeswoman Natasha Collins has said LG&E had ongoing talks to supply at least one unnamed large existing customer, but she declined to say who, citing customer privacy.
Kentucky regulators approved LG&E’s pipeline in 2017 as part of a utility rate case, but the path wasn’t made clear until last year. That’s because LG&E asked utility regulators to shield the proposed route from public scrutiny because it would create a “competitive disadvantage,” according to a filing with utility regulators.
LG&E declined comment for this story, except to say:
“This issue is pending before the Bullitt Circuit Court, and we cannot comment on the specifics of that litigation. However, we can say that whether this pipeline were needed for one or for many customers, which is the case, there is absolutely a public need,” wrote Spokeswoman Natasha Collins in an emailed statement.
Eminent Domain Lawsuits
LG&E has already purchased most of the land necessary to build the pipeline and is now using eminent domain to seize the remaining land from holdout landowners, which include private residences and Bernheim Arboretum and Research Forest.
Vanessa Allen and her husband said LG&E offered them about $16,000 to purchase an easement on their 125-acre farm in Northern Bullitt County. Allen told WFPL News last year, “We don’t want to sell our land, period.”
Kimberly and David Brown own 340 acres of karst farmland matted with green pastures, trees and sinkholes. Cox, their attorney, said the eminent domain action against the Browns’ should be dismissed because the pipeline does not serve a public use — a necessary requirement under the Kentucky Eminent Domain Act.
The true purpose of the pipeline was not to serve the customers of Bullitt County, but to serve Beam Suntory, he said.
“This was a project that they asked Jim Beam to pay for, and Jim Beam said no so they went back to the drawing table and said how can we get the ratepayers of this state to have to pay for it?” Cox said.