Pipeline operator sues to block Kyle regulations

Kinder Morgan, a pipeline operator working to build a 430-mile natural gas line slicing across Hays County, has asked a federal judge to block a Kyle ordinance that regulates the construction and operation of pipelines in the city.

The lawsuit argues that the Kyle regulations, enacted three weeks ago, violate federal and state law and should be struck down.

"(Kyle officials) passed the ordinance that runs roughshod over federal and Texas law, ignores the regulatory schemes that have been in place for decades, and imposes criminal penalties for alleged violations," said the lawsuit, filed Monday in Austin.

Houston-based Kinder Morgan also filed a complaint with the Texas Railroad Commission, a state agency that regulates pipelines, arguing that the Kyle ordinance subjects pipeline operators to excessive fees and should be invalidated.

The lawsuit, the latest in a series of legal battles over the Permian Highway Pipeline, was "not unexpected," Kyle Mayor Travis Mitchell said.

“We will confer with our legal team in the coming days and decide the best course of action,” Mitchell said.

Last week, Hays County, the Travis Audubon Society and three landowners notified Kinder Morgan that they intend to file a federal lawsuit seeking to stop construction of the Permian Highway Pipeline, a $2 billion project designed to transport natural gas from the Permian Basin to the Gulf Coast.

The 60-day notice of a potential lawsuit, required by federal law, argued that Kinder Morgan failed to obtain permits needed under the Endangered Species Act and other U.S. laws to run a 42-inch pipeline — expected to move 2 billion cubic feet of natural gas a day — through environmentally sensitive areas in Central Texas and the Hill Country.

In addition, a separate lawsuit filed in state court argued that the pipeline will be dangerous and that the Railroad Commission failed to create a proper permitting process before allowing land to be condemned for the project.

After state District Judge Lora Livingston dismissed that lawsuit in June, Kyle officials and Hays County commissioners voted to ask the Austin-based 3rd Court of Appeals to reinstate the lawsuit, which also included landowners in Hays, Caldwell, Blanco and Gillespie counties.

Kyle's pipeline ordinance, enacted July 2, requires natural gas pipelines to be buried at least 13 feet below the surface, limits the types of buildings that can be within 200 feet of a line, and requires safety features to be in place, including an automated shutdown system if a leak is detected or 24-hour monitoring for leaks or fires.

The pipeline's path includes several proposed developments that, if the line is built first, could limit construction options for developers in Kyle.

Under the ordinance, pipeline companies also would pay a $2,500 permit application fee, additional fees if the line crosses public rights of way and an annual $500 fee accompanied by a safety report.

Kinder Morgan's lawsuit, assigned to U.S. District Judge Robert Pitman, argued that the ordinance is preempted by federal and state laws that set pipeline health and safety standards and expressly limit local laws from doing the same.

The lawsuit also argued that the ordinance violates the U.S. Constitution's commerce clause, which protects a pipeline that will run through 16 counties and a number of cities from having to meet a patchwork of local health and safety regulations.

Kinder Morgan told the judge that the pipeline, expected to be in service in 2020, is needed to meet a "capacity crisis" that daily strands 400 million cubic feet of natural gas in the Permian Basin, requiring producers to burn off the excess — emitting carbon dioxide and methane — or decline to operate oil wells that produce gas.

"Any delay in constructing the pipeline will result in the waste of natural resources, pollution and other adverse consequences for energy consumers in Texas," the lawsuit said.