Oil Pipeline Ruptures – Landowners Evacuate

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Image of Kalamazoo Pipeline Rupture. Courtesy of Alternatives Journal.

The Longhorn pipeline, a crude oil pipeline operated by Magellan Midstream Partners (“Magellan”), ruptured approximately 4 miles southwest of Bastrop, Texas on July 13, 2017. The pipeline transports crude oil from Crane, Texas to Houston, Texas, a distance of roughly 500 miles. A contractor was performing maintenance on the pipeline, which was operating when it ruptured. As a result, an estimated 1,200 barrels (50,400 gallons) of crude oil spilled into the surrounding area.

Residents within a 1-mile radius of the rupture were asked to evacuate while residents within a 2-mile radius were given the option to either evacuate or take shelter in their homes. FM 520, the nearby thoroughfare, was shut down in both directions.

When it ruptured, the Longhorn pipeline was running at or near its full capacity. The Longhorn pipeline is a large capacity pipeline capable of transporting upwards of 200,000 barrels of crude oil per day. A prolonged shutdown could potentially mean that suppliers would have to look elsewhere to get their crude oil transported to the Gulf Coast.

This is not the first spill involving a Magellan operated pipeline. In January, a pipeline transporting diesel fuel spilled roughly 45,000 gallons of diesel in Northern Iowa.

A significant portion of property takings in Texas are the result of oil and gas pipeline projects. Incidents such as this serve as a reminder that even after condemnation proceedings have concluded, pipelines can still carry risks and create health and safety concerns. Due to the hazardous nature of the products pipelines transport, the potential for accidents poses an enduring threat to crops, livestock, water supplies, and property values. Landowners would do well to keep these considerations in mind when approached by oil and gas companies seeking to obtain an easement across their land.

Written by Graham Taylor

Liberty County to be Epicenter of Grand Parkway Construction in 2018

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Construction on Grand Parkway Segments F and G. Courtesy of HoustonFreeways.com

With Construction on Segments H & I-1 of the Grand Parkway set to begin in 2018, it seems likely that a wave of eminent domain proceedings is imminent in Liberty County. The Right-of-Way acquisition process for this 37-mile long segment of the project is estimated to take 24 months and will involve approximately 375 parcels of land. Following standard practice, the Texas Department of Transportation (“TxDOT”) will present the current landowners with a series of purchase offers. Should any of these landowners reject TxDOT’s offers, the State will exercise their power of eminent-domain to condemn properties they deem necessary for the project.

Segments H and I-1, located to the northeast of Houston, will run through Chambers, Harris, Liberty and Montgomery counties. Liberty County, however, will be the epicenter of the project with a large portion of the expansion taking place within its boundaries. As construction is right around the corner, Liberty County landowners with properties located in the project’s Right-of-Way have likely already received or will soon receive offers for their land from TxDOT.

The project will add two tolled lanes each direction between US 59 and Interstate 10 (“I-10”).

Construction will include the addition of 74 bridges, spread across the entire length of the project segment. The project is expected to cost $855 million and is anticipated to be completed in 2022.

Written by Graham Taylor

Legislature Bails Out Railroad Commission- Helps Landowners

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Legislature Bails Out TRC Photo

Courtesy of BearworxEngineering.com

The Texas Railroad Commission (“TRC”), an agency that has suffered financial difficulties due to budget cuts and reduced revenues, recently received a budget increase of 46 percent ($79.6 million) in the recently ended legislative session. These budgetary increases will hopefully allow the TRC to improve upon their ability to be an effective resource for landowners and make pipeline data readily available to the everyday Texan. Pipeline construction often requires pipeline companies to use the power of eminent domain to condemn property, commonly referred to as a “taking.” Public access to information collected by the TRC is vital to keeping landowners aware of activities that could affect their property.

The budget increase follows a year that saw monthly budget cuts of over a million dollars, a hiring freeze, and the postponing of desperately needed technological updates. In light of these financial difficulties, the TRC was forced to limit their operations to two core functions, the permitting and inspection of wells. Another one of the TRC’s functions is the issuance of T-4 permits which grants pipeline constructors the common carrier status required to exercise the power of eminent domain. A vital component of fulfilling this function is to maintain a public database of pipeline easements in the State of Texas.

The increased funding is intended, in part, to improve programs for well plugging, oil field clean up, and pipeline safety by financing the hiring of additional staff. The TRC’s staff is capped at 827 employees. Presently, the TRC is roughly 150 employees short of that maximum number. Additionally, the TRC was granted one-time authorization to retain nearly $40 million in revenue collected through its administration of the Natural Gas Utility Pipeline Tax. Roughly $27.6 million of that money will also be used to hire additional employees. The remainder will be used to provide salary increases.

An additional purpose of the budget increase is to continue, and hopefully expedite, the drawn-out process of updating the TRC’s computers and digitizing decades of oil and gas records which include pipelines constructed with and without the power of eminent-domain in the State.

In addition to updating its computer systems and digitizing historical records, the TRC provides an interactive map, accessible to the public, that tracks existing and operational pipelines throughout the State. The data represented by the interactive map may not always be current. This ambiguity diminishes the capacity of Texans to appreciate the scope of pipeline activity and its effect on their lives and property. One day, perhaps, the TRC will expand the functionality of its interactive map to include planned pipelines. This would allow landowners to determine whether a project under development will impact their property.

Landowners, under both the U.S. and Texas Constitutions, are entitled to just compensation when their land is taken. These database improvements can help begin to level the playing field between landowners and powerful oil and gas interests by keeping landowners current on projects that could impact their property rights.

– Co-Authored by Graham Taylor and Justin Hodge

Benedict Arnold Resurrected in Texas Despite Fourth of July Celebration

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Courtesy of TheSpruce.com.

In the 84th legislative session of the Texas Legislature, Senate Bill 474, a pro-landowner eminent-domain reform bill was championed by various members of the Texas Legislature. In the recently concluded legislative session, despite the momentum of another pro-landowner eminent-domain reform bill, House Bill 2684, Texas landowners were blindsided by the sudden redirection of legislative support. The abuse of condemnation power will remain unchecked. As we celebrate our Nation’s fight against an oppressive King with the power to take one’s property without just compensation, we are reminded of our nation’s greatest betrayal at the hands of Benedict Arnold.

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Benedict Arnold. Courtesy of the New England Historical Society.

As many of us recall, the promise of fame, fortune, and political power turned Benedict Arnold, a General and once-celebrated member of the Revolution who distinguished himself with acts of intelligence and bravery, away from supporting rights that we celebrate today such as “no taxation without representation” and “just compensation.”

Unlike Benedict Arnold, who never redeemed himself, on July 18th the Texas Legislature will meet for a special session and will be given an opportunity of redemption to prevent history from repeating itself roughly 240 years later. Texas landowners should call their representatives and urge them to support landowner rights in this upcoming special legislative session. Let us not take our independence for granted as we enter this Fourth of July Holiday!

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4th of July Fireworks over Columbus, Ohio. Courtesy of Fox News.

Happy Fourth of July!

 – Written by Graham Taylor and Justin Hodge.

Brazoria County – Epicenter of Eminent Domain in Texas

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Liquefaction Facility. Image Courtesy of Baton Rouge Business Report.

Brazoria County, Texas has recently experienced a rapid increase in its volume of eminent-domain cases. The County has long been considered a “hot spot” of the energy industry. Oil giants such as Conoco Phillips, Kinder Morgan, Gulf South, Enterprise, HSC Pipelines, as well as public utilities like the Brazosport Water Authority, maintain large-scale operations within the County. As energy production and transportation activities are often land intensive, the State government has established mechanisms by which private corporations can use the power of eminent domain to obtain private land.

Typically, natural gas is a by-product of the oil production process. In the past few years, global events in the oil market have resulted in a massive surplus of natural gas. Simultaneously, many of the new eminent-domain acquisitions in Brazoria County have been for the construction of new pipelines. One could speculate that this increase in activity within Brazoria County, especially the construction of pipelines, may be related to the abundance of natural gas.

In addition to pipelines, a new gas liquefaction plant is being developed in Brazoria County. Liquefaction is the process of converting gas that is in its vapor form, into a liquid. The liquid is denser per volume and easier to contain and transport than its gaseous counterpart, making it more profitable for companies. The liquefaction process requires extreme pressure and consumes large quantities of water. Also notable, the city of Freeport is a major export hub of the oil and gas industry within Brazoria County. It remains a mystery as to whom and where the liquid is transported and/or sold. It is only reasonable to attribute these rapid additions to the Brazoria County infrastructure to this new process.

Because this is a revolutionary concept, it is only a matter of time until this Brazoria County based process of gas liquefaction is spread out to the rest of the world. As with Brazoria County, these projects will likely produce an increase of eminent-domain actions against land owners wherever they are being built. Though the process of eminent-domain is never pleasant, landowners should remember that receiving just compensation for their land is a Constitutional right.

Written by James Nguyen.

Justin Hodge, Johns Marrs Ellis & Hodge Partner Featured in Houston Chronicle

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JMEH Partner Justin Hodge at the firm’s Houston Offices.

The Texas transportation and energy industries’ need for new infrastructure often brings them into conflict with landowners whose properties are required for these expansions. This tension has only increased in recent years, as economic and population growth have produced a need for ever greater quantities of energy, and the infrastructure necessary for its production and delivery. Transportation projects have been similarly affected by these growth conditions. Recent examples in both industries are the high speed rail project from Houston to Dallas and the pipelines being built from the Permian Basin to the Gulf Coast. Land requirements therefore have risen at a commensurate rate.

Naturally, landowners are generally not thrilled when an entity makes an offer for their land ahead of a planned construction project. They are even less happy when they realize the entity can often seize the land anyways via eminent domain if the offers are rejected. Making matters worse, these initial offers are often artificially low. Landowners who reject these low-ball offers and fight for compensation in the courts regularly receive settlement amounts several times greater than the offer they rejected. This however, leads to the additional problem of a lengthy legal process, as well as forcing the landowner to pay court costs, expert fees, and legal bills – the total cost of which can absorb large portions of the settlement.

There have been attempts to address this issue legislatively. In 2015, a bill would have allowed landowners to recover legal fees if their cases succeeded. It passed the Senate but not the House. This legislative session, a bill was proposed that would require a condemning entity to reimburse legal fees if a resolution for the landowner was greater than the entity’s final offer by 20% or more. The bill was revised to remove this language – and it passed the Senate. Since then, it has been referred to the House Land and Resource Management Committee.

There are two sides to this issue. On one hand, condemning authorities have argued this type of legislation would adversely affect the construction process – and stifle the economic benefits these projects produce. They assert such legislation would increase the propensity for landowners to take matters to court (currently, only 15% do) and the construction process would become more costly and lengthy as a result.

Property owners and their representatives disagree. They argue there’s little evidence to compel the notion such legislation would actually dampen industry growth. Florida, for example, robustly grows despite an eminent domain law that permits reimbursement of legal costs. They also suggest that without such a law, the legal costs associated with fighting a large corporate or government entity will continue to prevent landowners from being made whole.

These issues stir the passions of many because both property rights and oil and gas are embedded in the people and politics of the State of Texas.

To read the full article, click here.

‪Vote to support to end #eminentdomain ‬for private gain. YES on SB 740 @loiskolkhorst

‪Vote to support to end #eminentdomain ‬for private gain. YES on SB 740 @loiskolkhorst

Please watch the “‘TRANS PECOS’ | TEASER” on Vimeo.

 

The website for “TRANS PECOS” can be viewed here.

Luke Ellis interviewed on Fox News: Border wall faces legal battles over eminent domain in Texas

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The story can be viewed on our website.

$9 Billion Highway Funding Boost Includes $620 million for Austin Projects

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Congestion in Austin. Courtesy of the Austin Statesman.

$620 million of a $9 billion spending plan passed by the Texas Transportation Commission will fund four Austin city congestion relief projects. The plan is the latest development in Texas’ unified transportation plan, which, updated yearly, instructs the state’s highway, maritime, and aviation spending.

Loop 360, referred to as Capital of Texas Highway, will receive $204 million in State funding. This project will construct overpasses along the Loop beginning at Westlake Drive North. The overpasses will allow drivers to circumvent traffic lights.

Interstate 35 will receive $162 million and $133 million for two separate projects. The $162 million project will improve overpasses, ramps, and pavement conditions between Holly Street and Oltorf Street. The $133 million project will add flyover bridges near the I-35 and U.S. 183 interchange.

U.S. Highway 183 will receive $120 million. This project will add additional lanes to sections of the highway between MoPac Boulevard and Ranch-to-Market-Road (RM) 620. The funds will be combined with $46 million raised by the City of Austin.

Taken together, the investments will produce a noticeable increase of infrastructure-related construction activity. Landowners in affected areas should be mindful that such projects may require the use of eminent domain to obtain the land necessary to satisfy project needs.

Houston Receives $1.32 Billion Infusion of Highway Funding

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Traffic on I-45. Courtesy of Houston Chronicle.

Houston will receive $1.32 billion of the $9 billion spending plan passed by the Texas Transportation Commission for congestion relief. The Houston allocation, which is directed towards improving Interstate 45 and other highways, is among the largest distributions for a total of 230 statewide projects supported by this funding. The allotment will help reconstruct sections of I-45, and realign it with Interstate 69 (U.S. 59) through various individual projects.

The earliest of the scheduled developments will reconstruct I-69 between I-45 and Spur 527 before rebuilding I-45 at its I-69 interchange. This will be followed by a widening of I-45 in League City to four lanes in each direction. Finally, reconstruction work is scheduled for selected I-69/Loop 610 connections, near the Galleria area.

Congestion relief projects frequently involve expansion of one kind or another, as the principle method of relieving traffic is to increase the carrying capacity of targeted roadways. The completion of such projects may therefore require the acquisition of privately owned lands, which can in turn lead to eminent domain use for the condemnation of property.