KEYSTONE XL

As Texas farm owners square off with TransCanada, pipeline opponents see an opening

BEAUMONT, Texas -- Opponents of the Keystone XL pipeline are hoping to rally angry landowners across the state to take action in courtrooms and build on a precedent set last year in the Texas Supreme Court.

Yesterday at a court hearing held here at the Jefferson County Court at Law, a judge heard arguments over why TransCanada Corp., the company building the line, should be issued or denied a writ of possession that would allow its crews to access land ceded to it by Texas eminent domain law.

The case pits TransCanada against a coalition of rice farm property owners challenging the company's contention that the pipeline is a necessary public good.

A ruling from Judge Tom Rugg isn't expected until at least Sept. 24. But comments the judge made during yesterday's hearing suggest that a recent ruling by the state Supreme Court against Denbury Resources over a different pipeline will weigh heavily on his decision, even though the law seems clear that he's obligated to issue a writ in favor of TransCanada.

David Holland, one of the landowners contesting the company's claims as part of the group Texas Rice Land Partners, said his decision to fight the company in court is in large part due to the heavy-handed tactics he says TransCanada is employing against him and some leaseholders to his property.

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Holland estimates that there are more than 50 pipelines crossing his property. He's challenged only two companies requesting access -- Denbury and now TransCanada -- because those companies' pipelines would heavily restrict his access to his own property once they are in place, Holland explained during a rally outside the courthouse.

"This pipeline would create a barrier over which any sort of load over a certain weight would be prohibited, so we would have essentially an invisible barrier that goes all the way across a property for nearly 2 miles that we can't cross in the future," Holland said. "Those are conditions that we never had before. Those are conditions that TransCanada has insisted on as a predicate to a negotiated right of way with us."

Holland said the weight restrictions would make it impossible to move certain heavy rice farming equipment over that section of land, although cattle could still cross. Holland is also upset that TransCanada is refusing to bury the line deep enough to take it under canals on his property, thereby eliminating the threat a possible spill might pose to water resources there.

"All the other companies that we dealt with bore their pipelines under our canals," Holland said. "It's relatively easy to do today, it's not terribly expensive, and when you do that you bring it down below the surface of the earth; therefore, you do not have the situation where if a pipeline ruptures over a canal it goes into a canal and then it goes 3 or 4 miles down our property."

Holland said he'd welcome a portion of Keystone XL on his land if TransCanada took more precautions to protect the property from a possible spill and if the company offered him more compensation that he says he's entitled to. Under the terms the company is offering, Holland estimates that he's taking a roughly $30,000 hit to his property value.

Call to consider precedent

Texas law appears to be mainly on TransCanada's side, a point that's becoming increasingly controversial in a state made up of 95 percent private property, and where landowners are increasingly expressing anger and frustration over the ease with which oil and gas companies are able to seize it.

During the hearing, TransCanada attorney Tom Zabel made a straightforward argument based on the letter of the law.

The Texas Railroad Commission, which regulates the oil and gas industry in the state, has already awarded TransCanada the right of way it was seeking by condemning portions of the Holland property. The company says it needs access to a much larger portion of land in order to begin laying the line along the strip of land it now controls. And the rules state that, should property owners refuse access, a court must issue a writ of possession against parties named in the condemnation action, Zabel argued.

Judge Rugg initially said he was inclined to agree.

But Tom Wood, an attorney representing Texas Rice Land Partners, urged the judge to consider the precedent made in the Denbury case last year, when the state Supreme Court ruled that the company failed to show that its pipeline qualified for "common carrier" status, meaning it would be used to transport public goods.

A hearing is set for Oct. 4 in a separate case of landowners challenging TransCanada's claim to common carrier status. Wood urged the court to deny TransCanada a writ of possession in the Rice Land Partners case until the separate suit could be resolved.

"Those issues there that are before the 9th Circuit Court of Appeal have every bit the same relevance and the same gravity and the same constitutional issues as in this case with my client," Wood said in argument. "What you're hearing is expediency for the pipeline company versus constitutional rights of landowners."

The judge largely dismissed the notion that a writ be refused until a separate court case is concluded, a process that could take years. But the Denbury precedent seems to leave him willing to consider the implications of a ruling in favor of TransCanada more carefully.

"I appreciate the context of your arguments, and it is of concern of this court that the rights of landowners not be trampled unless there's a clear, statutory, constitutionally statutory order for me to do so," Rugg said.

Wood requested a delay to give him more time to respond to a 45-page motion put forth yesterday by TransCanada. Rugg agreed but refused to wait until after the Oct. 4 hearing in the separate case. He said both sides in the dispute can expect a ruling from his bench by Sept. 24.

TransCanada's legal team said it could not make any public comments on the case.

Wood said his prior experience dealing with Rugg gives him confidence that the judge will take his arguments seriously.

"He will do a very thorough job," Wood said.

'Egregious overreach'

During the hearing, a group calling itself Tar Sands Blockade staged a rally and media event in support of the landowners challenging TransCanada in court.

Ron Seifert, a spokesman for the group, said the delayed ruling and additional time awarded to the landowners' attorney was a modest victory for Tar Sands Blockade's growing movement to halt construction of the pipeline.

"Our project is to raise awareness to make sure everyone knows the egregious overreach of TransCanada, knows that this is a fraudulent operation, that they are taking private property for their own personal gain, that there's no public interest involved and that they've treated humans along the way like collateral damage," Seifert said.

Seifert said his group hopes that high-profile court challenges to TransCanada's eminent domain claims will encourage other landowners in Texas to organize court challenges to the company. In another well-publicized case, north Texas landowner Julia Trigg Crawford is appealing a recent court ruling that awarded TransCanada access to a parcel of her land that the company says it needs to build the line.

"There are at least 100 landowners in Texas alone that have been condemned, that refused to sign paperwork with TransCanada and are now going through similar processes having writs of possession filed against them, having TransCanada tell them that they are the landlord of their home properties," he said. "So we think there's an opportunity for a lot of folks to rise up legally and take action. We want to create enough space for that to take place."

The Keystone XL pipeline -- the southern leg of which is under construction -- would eventually run all the way from the Alberta-Montana border to refineries on the Gulf of Mexico coastline. Demand for more crude oil transport to alleviate a bottleneck at the Cushing, Okla., crude oil storage terminals has encouraged TransCanada to move forward with construction of the southernmost stretch of the line, from Cushing to Houston-area refineries, to meet that industry demand.

Opponents of the line say risks of spills are increased because the line will be used to carry oil pulled from Canadian oil sands projects. TransCanada says the material that the line will carry will be essentially the same as regular crude oil and thus carries no extra risk.

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