Farmers Challenge Keystone Pipeline Over Eminent Domain

Thursday, 04 Oct 2012 01:23 PM

 

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TransCanada Corp. should be barred from building the Keystone XL pipeline to transport Canadian tar-sands crude to Gulf Coast refineries, pipeline opponents urged a Texas appeals court, citing a new state-court precedent.

Landowners opposing Keystone XL argued in a state appellate court in Beaumont today that TransCanada doesn’t meet the definition of a “common carrier” under a 2011 Texas Supreme Court ruling and shouldn’t be allowed to use state eminent-domain laws to obtain easements across their properties.

“The Texas Supreme Court ruling said the ownership of land is connected to our very freedom,” Anthony Brocato, the landowners’ lawyer, said at the hearing. “If someone, for their private profit, comes to take what belongs to you, they have to follow the letter of every law and show precisely and specifically that they have the right.”

Pipeline opponents claim last year’s high-court decision withholds condemnation powers from interstate pipelines that transport out-of-state crude into Texas. Only intrastate pipelines transporting hydrocarbons within state borders should be allowed to use eminent domain, the landowners, known as Rhinoceros Ventures Group Inc., have said in court filings.

If the appeals court agrees with that interpretation, Calgary-based TransCanada and other companies may lose condemnation powers that were used to install about 44,000 miles of interstate pipelines in Texas since 1917, according to state regulatory commission records.

Tom Zabal, TransCanada’s lawyer, has argued that the high- court ruling doesn’t apply to the Keystone XL, which will carry some West Texas crude to coastal refineries via a pipeline hub in Cushing, Okla. He said landowners who want to change eminent-domain laws should lobby lawmakers in the state capital rather than litigate condemnation cases one at a time.

“Appellants can go make their arguments in Austin to the Legislature,” Zabal said in court filings. “It is not this court’s job to take that drastic step of rewriting Texas’s common-carrier eminent-domain statutes in that manner.”

In lawsuits all along the Keystone XL’s route through East Texas, TransCanada has consistently won court permission to start building the southernmost leg of its 2,151-mile pipeline between western Canada and the U.S. refining industry complex on the Texas coast. State law lets pipelines begin construction while landowners protest the condemnations in court.

In addition to Rhinoceros, four other groups of Texas landowners are also fighting TransCanada’s attempts to cross their lands. Those challenges are in various stages of the condemnation process.

Some of these landowners sued TransCanada after negotiations broke down over the price the pipeline offered for the easements. Others sued over concerns the pipeline would contaminate delicate aquifers or restrict how farmers and ranchers can use their own lands.

Four of the remaining Keystone condemnation cases, including the Rhinoceros case, involve parcels in Jefferson County, near Beaumont. The fifth involves a family farm in Lamar County, in northeast Texas.

© Copyright 2014 Bloomberg News. All rights reserved.

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