Kinder Morgan sues over pipeline
Houston pipeline operator Kinder Morgan has sued an Austin suburb over the passage of an ordinance that the company alleges aims to keep a proposed natural gas pipeline out of town, disrupting the route approved by state regulators.
In a 22-page lawsuit filed on Monday in U.S. District Court in Austin, Kinder Morgan alleges that the City of Kyle overstepped state and federal law when city council members passed a July 2 ordinance regulating the construction of natural gas pipelines within city limits.
Kinder Morgan is seeking to build the $2 billion Permian Highway Pipeline to connect the prolific Permian Basin of West Texas to the Katy natural gas hub near Houston. Spanning 430 miles, the 42-inch diameter pipeline is designed move 2 billion cubic feet of natural gas per day but the proposed route faces stiff opposition in the Texas Hill Country, Hays County and the City of Kyle.
Opponents unsuccessfully tried to stop the project by suing Kinder Morgan in a state district court in Austin. A judge tossed out the lawsuit in a June 25 decision. Days later, the Kyle City Council passed an ordinance stating that all natural gas pipelines with a diameter of 30
inches or more would require a city permit.
Under the ordinance, pipelines must be buried at least 13 feet below the surface and be located at least 200 feet away from schools, day cares, hospitals, retirement homes and other sensitive facilities. The ordinance also imposes several fees, including a $2,500 permit application fee and a fee per linear foot for city rightof-way used. By comparison, the Railroad Commission, the state agency that regulates pipelines and the oil and gas industry, charges a per mile fee for pipeline projects and a $500 permit application fee.
Kinder Morgan is asking Judge Pitman to issue an injunction suspending the ordinance until the case is settled.
“While municipalities have the authority to impose certain fees in discrete circumstances under Texas law, those fees must be both reasonably calculated and tied to the actual costs incurred by the city administering valid municipal regulations,” Kinder Morgan said in a statement. “The fees the City of Kyle is attempting to collect are neither.”
In addition to the lawsuit, Kinder Morgan has also filed a complaint with the Railroad Commission. The company says the Permian Highway Pipeline’s route affects the fewest number of landowners and is environmentally sound.
“We remain committed to working with the city to address its concerns, but the city’s enactment of these ordinances left us with no choice but to take action,” Kinder Morgan said. “This project is vital to the State of Texas in order to alleviate the flaring of natural gas in the Permian Basin and move the energy needed to heat and cool homes, schools and public buildings in Texas — while providing substantial local and state revenues.”
Other opponents have sought ways to block the pipeline after sustaining the defeat in state court. Hays County and other opponents have threatened to sue Kinder Morgan under the Endangered Species Act to protect the habitat of the golden-cheeked warbler, a rare songbird that only nests in the Texas Hill Country.
Kyle Mayor Travis Mitchell declined comment on Kinder Morgan’s lasuit pending the city’s review of the filings. In a past interview, Mitchell said the pipeline would go through several proposed subdivisions where developers plan to build as many as 20,000 homes. The city he said, has already spent millions of dollars adding water, sewage and electrical services to those sites.
Located roughly 20 miles south of Austin, Kyle had a population of 5,000 in 2000. Less than two decades later, its population is projected to exceed 50,000. Mitchell said the pipeline route would hurt growth and sting the city’s budget.
“All of this could have been avoided if Kinder Morgan had to follow the most basic outreach efforts that the city of Kyle and utility companies have to follow,” Mitchell said in the past interview.