TX Permian Highway Pipeline Trial Begins

FRIDAY, MAY 31, 2019

On Tuesday (May 28), Judge Lora Livingston and the 261st State District Court in Austin began listening to arguments to decide the outcome of an anti-eminent lawsuit filed against Kinder Morgan Texas Pipeline and the Railroad Commission by Hill County, Texas, landowners, in addition to officials from the City of Kyle and Hays County.

The lawsuit had been filed regarding Kinder’s $2 billion Permian Highway Pipeline, citing that the state agency responsible for oil and gas regulation and eminent domain needed to be challenged.

Project History

In September 2018, Kinder Morgan, along with EagleClaw Midstream Ventures, a portfolio company of Blackstone Energy Partners, announced the decision to proceed with the Permian Highway Pipeline.

Shippers attached to the project include: EagleClaw, Apache Corporation and XTO Energy Inc., a subsidiary of Exxon Mobil, as well as others. Kinder Morgan and EagleClaw were the initial partners, each with 50% ownership of the project.

Civil and environmental surveys also began in September 2018 and are set to conclude in June of this year. Construction is slated to begin in the fall, with an in-service date set for late 2020.

The pipeline would carry 2 billion cubic feet of natural gas daily over 423 miles of 42-inch pipeline, running from the Coyanosa, Texas, area to Gulf Coast markets. According to Kinder Morgan, KMTP will both build and operate the pipeline.

An estimated 2,500 construction jobs and 18 full-time ongoing positions, available once construction is completed, will be created as a result of the pipeline.

In March, the San Marcos city council announced plans to oppose the development of the pipeline, requesting action from both houses of the Texas Legislature in protecting landowners and their rights, along with communities.

“We’re opposed to the pipeline because of the effects to the groundwater and the spring systems of this region,” said Ashley Waymyth, managing director for the Wimberley Watershed Association.

Waymyth also noted that the association had spoken to Kinder Morgan through landowners, and though the company had scheduled meetings to engage with Hill Country, the company ended up canceling. At the time, Kinder Morgan consultant Greg Neil requested that the council deny the resolution.

The Lawsuit

Pipeline opponents allege that the Railroad Commission is allowing the project to move through residential areas in Kyle. In addition to the filing against Kinder, the lawsuit also files against five agency executives—Chairman Christi Craddick, Commissioner Ryan Sitton, Commissioner Wayne Christian, Executive Director Wei Wang and Pipeline Safety Director Kari French—and a subsidiary of Kinder.

According to Texas law, pipelines that carry product for other companies fall under “common carrier” status, which includes the ability to implement eminent domain. Currently, pipeline operators in the state must file a report with the Commission 30 days prior to construction beginning.

Kinder CEO Steve Kean noted that those opposed to the project wanted to move the route to north of Austin or south of San Antonio. Such a move would cause further issues with more landowners. Kean added that the company had already made 150 revisions to route plans to address concerns.

Prior to the trial, Kinder filed a motion to have the lawsuit thrown out on the basis that the Texas law and state’s Constitution uphold the company’s rights.

In the Courtroom

During Tuesday’s trial, several residents with property slated to be affected by the pipeline construction, spoke up about their concerns, and in many cases, about money offered as an exchange in letting the company install the pipeline and house other supporting equipment.

"The communication process is extensive from our standpoint," said Allen Fore, Vice President of Kinder.

"We have had hundreds of meetings with elected officials, over 1,000 meetings and follow up phone calls and conversations with landowners. Letters written out, public notices put in newspapers, extensive communication in a wide variety of ways."

However, one resident, Lana Nance, testified that no one from Kinder nor the Railroad Commission ever approached her about how to best cross her property with the pipeline. In addition to the neglect, Nance also noted that the project would jeopardize a previous agreement for a bridge expected to be built on her property.

Kinder clarified that it could adjust the plans for Nance's concerns, adding that they hadn’t been assured of how definite the construction for the bridge was.

Richard B. Kuprewicz, President of Accufacts—an energy consulting firm—was also called by plaintiffs since he also deals with pipelines. While testifying, Kuprewicz said, “If the pipeline were to rupture, it would have tremendously large impact zones well beyond the right-of-way." He also added that he is aware of several Kinder pipeline ruptures, both liquid and gas, that have occurred at other locations.

Defense officials responded to this by stating that Kuprewicz has not visited or viewed any properties or plans for the Permian Highway Pipeline.

Livingston was scheduled to hear arguments and testimony from both sides of the case on Tuesday and Wednesday (May 29), with a ruling planned for later in the week.


Tagged categories: Infrastructure; Infrastructure; Lawsuits; NA; North America; Oil and Gas; Pipelines; Program/Project Management; Project Management; Upcoming projects

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