Tag Archives: Pipelines

Legislature Bails Out Railroad Commission- Helps Landowners

07 Friday Jul 2017

Posted by in Pipelines, texas condemnation, texas eminent domain, Texas Eminent Domain Attorney, Texas Eminent Domain Lawyer, Texas Railroad Commission, Uncategorized

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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

Texas Independence Day

02 Monday Mar 2015

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As Texans, today we pause to honor those who fought for our independence.  Texas Independence Day symbolizes the strength of those who call Texas home – a resolve to fight for what is fair and right.

Five months prior to the day Texas gained its independence, a fearless group of Texans, who referred to themselves as “Texians,” successfully resisted Mexican forces who were ordered to take a small bronze cannon mounted to the blockhouse in Gonzales, Texas.  In a bold act of defiance, the Texians fashioned a flag containing the phrase “Come and Take It” along with a black star and an image of the cannon.

During that October night, the Texians crossed the river at approximately 7 pm. It is reported that a thick fog rolled in at midnight, delaying the Texian army. Just before sunrise, the Texians reached the Mexican army. With the darkness and fog, the Mexican soldiers could not estimate how many men had surrounded them. At dawn, the Texians emerged from the trees and began firing at the Mexican soldiers. After a failed attempt at a “mediated settlement,” the Texians fired their cannon at the Mexican army. The Mexican army retreated realizing it was outnumbered and outgunned.

Today, Texans battle government and private takings of land for pipelines, power lines, and road projects by condemnation.  There is very little difference between the Mexican army taking the cannon and a private company improperly using eminent domain to take property.  See Texas Rice Land Farmers vs. Denbury Green Pipeline, 363 S.W.3d 192 (Tex. 2012).  Let us celebrate our founding “Texians” wisdom in Article I, Section 17 of the Texas Constitution.  It states:

“(a) No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person, and only if the taking, damage, or destruction is for:

(1) the ownership, use, and enjoyment of the property, notwithstanding an incidental use, by:

(A) the State, a political subdivision of the State, or the public at large; or

(B) an entity granted the power of eminent domain under law; or

(2) the elimination of urban blight on a particular parcel of property.

(b) In this section, “public use” does not include the taking of property under Subsection (a) of this section for transfer to a private entity for the primary purpose of economic development or enhancement of tax revenues.

(c) On or after January 1, 2010, the legislature may enact a general, local, or special law granting the power of eminent domain to an entity only on a two-thirds vote of all the members elected to each house.

(d) When a person’s property is taken under Subsection (a) of this section, except for the use of the State, compensation as described by Subsection (a) shall be first made, or secured by a deposit of money; and no irrevocable or uncontrollable grant of special privileges or immunities shall be made; but all privileges and franchises granted by the Legislature, or created under its authority, shall be subject to the control thereof.”

As Texans, our Constitution guarantees us the right to “adequate compensation” for the taking of property through eminent domain.  Because the “Texians” bravely fought for this right, today we celebrate Texas Independence Day and honor our fallen heroes.

Justin Hodge is a partner with Johns Marrs Ellis & Hodge LLP in Houston, Texas.  He defends against government and private takings throughout the State of Texas.

The Texas Supreme Court reverses $5 million award to historical, family-owned beach in Galveston, Texas.

13 Wednesday Aug 2014

Posted by in Politics, Property Rights, texas condemnation, texas eminent domain, Uncategorized

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Although Porretto Beach survived the Great 1900 Storm, Hurricane Carla, Hurricane Camille, Hurricane Alicia, and Hurricane Ike, it was unable to endure the Texas Supreme Court’s recent hurricane-season battering.  The Court’s opinion shows just how hard it is for a landowner to win an “inverse condemnation case” in Texas.

There are two types of cases when the government takes property through eminent domain. First, there are physical takings cases like highway, power lines, and pipelines where landowners are absolutely entitled to just and adequate compensation under the Texas constitution.  Second, there are inverse cases, like Porretto, where the State does not physically occupy the property, but its actions have a real-world, negative impact on the ability to use the property.

In Porretto, the Texas Supreme Court goes to great length to avoid having the State “take” property.  The evidence showed that the State: (1) claimed ownership of the property through the General Land Office, (2) transferred ownership under the tax records to the State, and (3) leased a portion of the property to the City of Galveston.  If these steps do not constitute a “taking,” then a landowner is left with the question of what actually does.  The takeaway is that mere threats (and even some steps) are likely not going to be enough to establish an inverse condemnation taking in Texas.

In light of this ruling, Texas landowners must be very careful when negotiating and reaching agreements with the State.  Porretto is a perfect example of where the State may go back on its word!

You can read the full opinion here.

Pipeline May Be Key to Unlocking Next Government Shutdown

02 Wednesday Oct 2013

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Photo by Anne Sherwood for The New York Times. Dawson County Montana–one of the areas through which the proposed Keystone Pipeline XL would pass if approved.

The Keystone Pipeline XL may be a key to unlocking the next cement door put up by the GOP to meeting fiscal deadlines, the New York Times reported. The Republican Party will likely seek approval of the pipeline in the discussion to raise the national debt ceiling, which has an Oct.-17 deadline, rather than in debates pertaining to the missed Oct. 1 budget deadline that defunded the U.S. government and brought the government into its second day of the shutdown. Tying the pipeline to the debt ceiling could have a significant impact on landowners’ rights as TransCanada, the pipeline builders, try to attain land for the project, which will bring into question the eminent domain rights of the company as a “public” utility as well as any resulting condemnation claims.

House of Representative member Lee Terry (R-Nebraska) said to the NYT that the Republicans feel the debt ceiling debate may be their “only option” in seeing the pipeline come to fruition, and his opinion may not be far from the truth considering President Obama’s more aggressive approach toward preventing climate change in his second term. The pipeline crosses an international border and needs approval from the Obama administration in order to continue, and the President has ordered an internal review to consider the potential environmental risks the Keystone Pipeline XL may impose. A decision on the pipeline from the President without interference from Congress could come in early 2014, but a Republican-led, last-ditch effort to guarantee the pipeline’s completion may change that timeline.

President Obama stated that he has little patience for any provisions on the upcoming debt ceiling bill, and considering the lack of bipartisanship that has become a trademark of about the last 4 years of U.S. politics, another looming budget battle about the national debt ceiling, and, therefore, the Keystone Pipeline, likely awaits the Congress currently tied up on approving a national budget.

This battle will most likely not carry the same momentum as the current budget debates simply because it follows the budget deadline that resulted in defunding the U.S. government, a move not well received or likely to be repeated within the same term. But, nothing is certain, especially the future of the Keystone Pipeline XL.

Supporters of the pipeline argue that it would help decrease the United States’ dependency on the Middle East for oil and create more jobs within the nation, while opponents fear the carbon emissions that would result from such a large build.

The Center for Biological Diversity, a non-government organization that often lobbies for greater environmental protection for endangered species, recently released a study about the potential damage the pipeline will cause on habitats it crosses, according to Al Jazeera America on Sept. 29. Al Jazeera America also reported that the Intergovernmental Panel on Climate Change, sponsored by the United Nations, released a report linking global warming to “human carbon dioxide output from fossil fuels, including carbon-rich tar sands oil like that which the Keystone pipeline is designed to transport.”

The Pew Research Center reported that about two-thirds of Americans support the pipeline, but the same margin of Americans also opposes great carbon emissions. Waiting for the Obama administration’s report on the Keystone Pipeline XL could lead to a well-informed decision that considers all different arguments for and against the pipeline, but forcibly linking that decision to the debt ceiling may rush an important decision on an issue that is clearly more grey than black or white.

The decision to link the pipeline to the Oct. 17 deadline might change considering the potential political ramifications that will result from the current government’s continued failure to pass a budget — a move not boding well for Republicans in office as their constituents begin to feel the effects of a government shutdown domestically and abroad.

Coauthored by Justin Hodge and Ayla Syed.

With the Keystone decision looming, will the President propose a quid pro quo?

03 Monday Jun 2013

Posted by in Pipelines, Politics

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To many, the ultimate approval of the Keystone XL pipeline project is inevitable. Environmentalists and oil and gas advocates have long been engaged in a heated debate that has narrowed its focus to TransCanada’s Keystone XL pipeline.

Here are a few of President Obama’s options: a) approve the pipeline and offer an energy-efficient tax incentive or alternative energy goal proposal for the future; b) approve the pipeline and disregard the cries of environmentalists; c) strike the pipeline and disregard upset oil and gas investors that are likely to pursue the pipeline’s construction anyways; d) strike the pipeline and offer some kind of proposal to alleviate what to advocates of traditional energy forms would seem like an utter crisis; e) indefinitely postpone the decision entirely. The problem with creating an additional proposal to his decision to strike or approve the pipeline is that it would require approval from Congress, which we all know has been facing much difficulty seeing eye to eye. Regardless of the path President Obama chooses, someone is bound to be upset; such is the nature of dramatic once-in-a-term decisions like this. Because of the opportunity’s rarity, the decision to keep or remove the contentious pipeline will leave a lasting impact on how the Obama legacy will be perceived. What is left undeciphered now is through which lens the President’s term will be remembered – will he be envisioned as the environmental advocate or the oil and gas subjugate?

To read about additional possible outcomes of this contentious debate, please click here.

EPA releases harsh review of Keystone XL environmental report

23 Tuesday Apr 2013

Posted by in Pipelines, Property Rights

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The Keystone pipeline debate continues. In a letter to State Department officials, the EPA made objections regarding greenhouse gas emissions, pipeline safety and alternative routes. The EPA said it had “Environmental Objections” to the State Department’s environmental assessment due to “insufficient information. ”

Read the EPA’s letter here.

To read more about this article, click here.

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$604, 950 Jury Award for Pipeline Damage Affirmed, Texas Supreme Court Denies Petition in San Antonio Court of Appeals

08 Monday Apr 2013

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In some condemnation proceeding involving pipelines, three types of damages can potentially be taken into consideration: 1) the permanent damage caused by the presence of the pipeline; 2) the temporary damage caused by the laying out of the pipeline; and 3) the remaining lands’ diminution of value. In LaSalle Pipeline, LP v. Donnell Lands, LP, the landowner was initially offered a special commissioners’ award of $19,026 in compensation for the temporary workspace easements, $34,533 for the permanent easements, and $604,950 for the diminution of value to the remaining property. LaSalle Pipelines appealed, arguing for insufficient evidence as to the amounts awarded for the temporary easements and the remaining property.  Additionally, LaSalle argued that two of the jury members had a preexisting bias in favor of Donnell Lands. The Court of Appeals ruled the following: 1) the jury did not err in its $604,950 award for the diminution of value to the remaining property; 2) the expert appraisals’ methods were sound; 3) the trial court did err in its award for temporary workspace damages, reducing the award to $6,402; 4) LaSalle failed to establish venire members’ existing bias.

The implications of this case are quite large. With the growing number of condemnation cases in the Eagle Ford Shale area, pipeline companies are now obligated to provide compensation for the damage done to the remainder of the condemnee’s land. Not only does this alter the general predictability of eminent domain cases in Texas, it also implies gradual shifts towards increasing the value of the landowner’s voice.

Arkansas Pipeline Rupture Amplifies Keystone Opponents’ Arguments

08 Monday Apr 2013

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In a small town outside of Little Rock, Arkansas, ExxonMobil’s Pegasus pipeline ruptured over 19,000 barrels of a mixture of Canadian crude oil and water. More than twenty residents of the town were forced to evacuate from their homes, and according to USA Today, they may be forced to refrain from reentering their homes for another month. See below for what an oil spill might look like in your backyard. Property owners who recently put their home up for sale rightly worry about a decline in market value due to the spill. About a mile from the location of the spill is Lake Conway, just three miles north of the Arkansas River. While ExxonMobil claims the oil did not flow into these bodies of water, some residents saw the oil spilling into storm drains on the street.

No doubt, the flames of those opposing the contentious Keystone XL Pipeline have been fanned, creating worry and discomfort about the installation of a pipeline intended to transfer 800,000 barrels of Canadian crude oil across the nation. Adding to the growing list of unexpected oil spills in Kalamazoo and Yellowstone makes the TransCanada’s claims in favor of the security of the Keystone XL Pipeline seems doubtful.

Will the current administration rule in favor of landowners or forsake the risks of property damage for industrial capital? The Globe and Mail says the President is expected to make a decision this summer. For now, we can only wait.

Land Battles Rise as U.S. Eyes 450,000 Miles of New Pipe

04 Monday Feb 2013

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“It’s increased at a level I’ve never seen in the past 10 years.”

To read the full article, please visit Bloomberg.com

As the United States endeavors to leverage its economic and energy independence, a rising tide of private companies advocating for miles of pipeline to the moon and halfway back leave many landowners between a rock and a hard place. Since the famous 2005 Kelo decision where eminent domain rights were granted to a private corporation for private gain, Texas courts have taken small efforts in increasing the volume of the landowner’s voice. With about 95% of eminent domain cases settling outside of court and every state exemplifying its own set of guidelines to regulate and standardize these proceedings, landowners are finding new ways to challenge the existing modus operandi. In Texas, this has led to the 2011 requirement that condemners provide a “good faith offer” to landowners along with full appraisal reports indicating the derivation of the offer. Additionally, a greater emphasis has been placed on respecting the landowner. Still, there is a lot of work to be done to ensure just compensation.

Business Keystone XL foes say fed study should consider climate effects

24 Monday Dec 2012

Posted by in Pipelines, Property Rights

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The Keystone line continues to be a political lighting rod after the presidential election. While the Federal emission challenges demonstrate yet another reason for the line’s harmful effects, the real issue will be whether Keystone – aka Seaway in Texas – will stop offering below market values to property owners. The product they are flowing through the line will most certainly cause future buyers to have concerns with the property impacted by the line.