A dispute over access for the Gulf Coast portion of TransCanada’s Keystone pipeline across a small piece of private property in east Texas continues after a county court judge in a Dec. 19 hearing questioned whether the issue is within his jurisdiction.
In that hearing, Nacogdoches County Court-at-Law Judge Jack Sinz asked both sides in the dispute, TransCanada and the property owner who is contesting the access, to submit arguments as to whether the dispute should be settled in county court or if it should be moved to a Texas district court. Written arguments will be submitted by the first week in January, but a hearing date has not been set. In the meantime, construction on the pipeline continues.
The Gulf Coast project is part of TransCanada’s larger Keystone pipeline that will originate in Alberta and run through eastern North Dakota, providing Bakken producers with additional transportation options to Mid-Continent and Gulf Coast refineries.
What it’s all about
The issue began on Dec. 7 when Judge Sinz granted a restraining order to Michael Bishop, a local landowner, temporarily stopping construction of the pipeline on Bishop’s property. Bishop claims that Calgary-based TransCanada had mislead him as to exactly what would be transported through the pipeline and further claimed that he had signed an access agreement with TransCanada under duress.
The rub is over bitumen from the Canadian oil sands and whether it meets the definition of crude oil. According to StateImpact Texas, a Texas public radio news service, Bishop says that the Keystone pipeline was permitted to transport crude oil but claims that bitumen is not crude oil because it is not a naturally occurring liquid. TransCanada, on the other hand, maintains that diluted bitumen is a form of crude oil, a view supported by several previous Texas court rulings.
“Oil is oil and Keystone XL is designed to carry various grades of crude oil from different sources, all of which must meet strict tariff specifications and regulatory requirements in the U.S. and Canada,” said TransCanada spokesperson Shawn Howard in a Dec. 19 statement. “While each batch will have its own unique characteristics, if it does not meet strict specifications, we will not accept it for transportation. More than a dozen studies conducted in the last few years have shown that diluted bitumen and other crude oils derived from the oil sands have the same characteristics as traditional light crude oils and pose no added risks to pipeline safety.”
Earlier court proceedings
While the restraining order was issued by Judge Sinz on Dec. 7, TransCanada did not learn of the order until Dec. 12 and argued against the restraining order in a rushed hearing on Dec. 13. At that point, Judge Sinz dissolved the restraining order of Dec. 7 and set a Dec. 19 hearing date to hear both sides of the dispute.
“We are very pleased with Judge Sinz’s dismissal on this temporary restraining order,” Howard said in a prepared statement following the Dec. 13 hearing. “TransCanada has been open, honest and transparent with Mr. Bishop at all times. We recognize that not everyone will support the construction of a pipeline or other facilities, but we work hard to reach voluntary agreements and maintain good relationships with landowners,” Howard added.
According to Bloomberg news service, Bishop offered TransCanada the use of an existing pipeline easement along one edge his 20-acre property at no charge, but said the situation changed when he learned the pipeline would be located closer to his house than he had originally believed.
In a written statement issued after Judge Sinz dissolved the temporary restraining order on Dec. 13, TransCanada’s Howard said that Bishop entered into an easement agreement TransCanada following mediation in which he was represented by an attorney, and that he had no basis for his latest actions. “He was fully informed about what was in the agreement, and in exchange he received a significant compensation payment (including paying his legal bills up to that point) that he cashed the very next day. Judge Sinz acknowledged that Mr. Bishop knew what he was doing when he entered into the agreement with TransCanada.” That agreement was worth a total of $75,000.
Howard went on to say that TransCanada has followed all of the laws established by the State of Texas and has the legal authority to construct the Gulf Coast Pipeline, and none of Mr. Bishop’s claims are supported by credible facts.
Between now and then
Following the Dec. 19 hearing, Howard released a statement saying that while TransCanada went into the hearing fully prepared to address Bishop’s claims, regardless of how Judge Sinz rules on the jurisdiction issue, TransCanada is ready and able to proceed with the project. “Today’s delay in hearing this matter does not impact construction in Texas and 4,000 workers remain focused on safely building the Gulf Coast Pipeline so we can bring it into service in late 2013.”
Other legal action by Bishop
In addition to the legal action against TransCanada, Bishop has filed a lawsuit against the Texas Railroad Commission, the agency that regulates pipelines in Texas. According to StateImpact Texas, Bishop claims the agency should never have granted the pipeline permit to TransCanada in the first place. StateImpact Texas also reports that several other landowners have sought legal action to stop the pipeline.
