Pipeline hits pause with Texas lawsuit

TransCanada Corp. must temporarily halt work on part of its Keystone XL pipeline while a Texas judge evaluates a landowner’s challenge that the line was permitted to carry only crude oil, not bitumen obtained from Alberta.

Michael Bishop, who granted TransCanada an easement across his property, obtained a temporary restraining order from a Texas County Court judge last week. The order blocks the company from working on Bishop’s property for two weeks while allowing work on other sections of the pipeline to proceed.

“He’s saying we can’t transport anything but crude oil, which is what we’re primarily going to carry,” Tom Zabel, TransCanada’s lawyer, said Tuesday. He said the company was asking for a hearing Thursday to dissolve the order.

“Under Texas law, TransCanada has been granted the legal authority to construct this pipeline,” David Dodson, a TransCanada spokesman, said in an e-mailed statement. “Construction has commenced on the property that is the subject of the temporary restraining order, and the product the Gulf Coast Pipeline will transport is crude oil. Mr. Bishop’s request does not impact overall construction, and we are on track to bring this pipeline into operation in late 2013.”

Judge Jack Sinz granted the temporary restraining order without notifying TransCanada, saying Bishop “has been defrauded and denied his constitutional rights,” according to the order.

TransCanada has been battling landowners and environmental groups at multiple sites along the southernmost leg of the pipeline between Alberta and the U.S. refining industry complex on the Texas Gulf coast.

So far, none of the challenges has permanently halted construction work on the pipeline, which will carry liquefied bitumen, along with traditional crude oil produced from fields in North Dakota, Oklahoma and western Texas, Zabel said.

Bishop, 64, is a chemist who claims the pipeline is only permitted to carry crude oil that is liquid under normal temperatures and pressure.