Editorial: Regulated freedom

The Sierra Club on June 19, 2020, filed a motion for preliminary injunction against the US Army Corps of Engineers (ACE), requesting a stay of ACE’s Clean Water Act verifications of Kinder Morgan Inc.’s Permian Highway natural gas pipeline. The motion also sought to enjoin all dredge and fill activities in the project’s ACE action areas, which include 129 water crossings, alleging that ACE approved construction without conducting required National Environmental Policy Act review of those crossings.

Permian Highway would transport 2 bcfd of Permian basin gas through 428 miles of 42-in. OD pipe from various Waha-area receipt points to delivery points in Katy, Tex., South Texas, and along the Gulf Coast. Construction began in March 2020.

Protests to stop the pipeline were under way even before then. Some were led by property owners who didn’t want the line crossing their land. Others were guided by environmental concerns. The efforts of both were buttressed by anti-hydrocarbon fuel activists.

The Mar. 28, 2020, discharge of 36,000 gal of drilling fluid at a Blanco River crossing site heightened the concerns of each of these constituencies. Kinder Morgan described the fluid—a mixture of water, bentonite clay, and sand—as not harmful if ingested and not a risk to drinking water, noting that it is also used to drill drinking water wells. In the wake of the incident, however, both the Trinity Edwards Springs Protection Association (TESPA) and Wimberley Valley Watershed Association issued notices of intent to sue Kinder Morgan.

TESPA filed its suit June 22, 2020, alleging violations of the federal Safe Drinking Water Act. Four households downstream of the spill reported “mud-colored water…flowing from their groundwater wells,” according to the suit. TESPA also noted that Kinder Morgan had been repeatedly asked to reroute the pipeline before beginning construction.

The city of Kyle, Tex., Hays County, and three private landowners had filed suit against Kinder Morgan and the Railroad Commission (RRC) of Texas in April 2019, claiming the state’s eminent domain process, under which the RRC allows pipeline operators to determine the route and acquire land for pipeline projects without landowner consent, violated the Texas Constitution. Two months later the court ruled that it found “no authority for the proposition that the legislature has granted authority to the commission to oversee the rights granted.” In other words, that the RRC did not have to set standards regarding either pipeline routing or the taking of private land, so long as the pipeline operator qualified as a utility.

Property rights vs. corporate rights

Market forces often pit the benefit of the many against the benefit of the few. Pipeline operators argue that their projects are for the public convenience and necessity. In fact, the document they’re issued before they can start work on a project is called a certificate of public convenience and necessity.

But private property rights are enshrined in the US Constitution and further buttressed in many states, including Texas, by legislation codifying the conditions under which they can be usurped. And landowners often argue that their rights are being compromised not for the benefit of the many, but the benefit of the more powerful few: the pipeline operators.

Given the disparity of scale between operator and landowner, if left to their own devices the operator would win most of these fights. That’s where regulators enter the picture, making sure the rules are being followed as intended. And if one party or the other still has a grievance once the regulators have ruled, the case goes to the courts.

It’s sometimes a long process and is aggravating (at the least) to the parties on both sides. But it’s what’s required for both our markets to remain free and our individual rights intact.