Feds Reject Latest Protest Against Trans Pecos Pipeline

by Russell Kooistra and Jasmine C. Hites

On November 1, 2016, FERC rejected arguments raised by numerous intervenors (“Environmental Intervenors”) that FERC had too narrowly defined its jurisdiction over Trans-Pecos Pipeline, LLC’s (“Trans-Pecos”) Presidio Border Crossing Project (the “Project”) and interconnecting intrastate pipeline (the “Trans-Pecos Pipeline”), which resulted in an abbreviated environmental review that failed to comply with the National Environmental Policy Act of 1969 (“NEPA”). In doing so, FERC found that the Trans-Pecos Pipeline will be an intrastate pipeline receiving natural gas produced solely in Texas, and thus environmental review of the construction and operation of the pipeline is not subject to FERC’s Natural Gas Act (“NGA”) Section 7 jurisdiction.

On May 5, 2016, FERC granted Trans-Pecos a Presidential Permit and authorization under NGA Section 3 to site, construct, and operate the Project to export natural gas to Mexico (the “May 2016 Order”). According to FERC, the Project will consist of 1,093 feet of pipeline extending from Texas to the Mexican border in the middle of the Rio Grande River, where it will interconnect with a new stub pipeline of a Mexican affiliate. On the United States side of the border, Trans-Pecos also plans to construct the Trans-Pecos Pipeline, a 148-mile-long pipeline connecting the Project to natural gas supplies in Pecos County, Texas. As the May 2016 Order noted, the Commission issued an environmental assessment for the Project, which concluded that approval of the Project would not constitute a major federal action.

In response, Environmental Intervenors requested rehearing of the May 2016 Order, arguing that FERC should have found that the Trans-Pecos Pipeline was subject to the Commission’s jurisdiction under NGA Section 7. Specifically, Environmental Intervenors argued that because the Trans-Pecos Pipeline terminates near the Waha Hub – a hub in west Texas with interconnecting interstate pipelines – it will transport natural gas that has been commingled with other gas transported by interstate pipelines located near the hub. As a result, Environmental Intervenors contended that FERC truncated its environmental review of the Project by not including the Trans-Pecos Pipeline. In addition, Environmental Intervenors argued that FERC should consider the Trans-Pecos Pipeline jurisdictional because, according to Environmental Intervenors, the pipeline is likely to provide interstate service at or near the in-service date. As an alternative to finding the Trans-Pecos Pipeline jurisdictional under the NGA, Environmental Intervenors argued that FERC should “federalize” the pipeline for the purposes of NEPA and analyze it together with the Project. Finally, Environmental Intervenors argued that FERC failed to consider Comanche Trail Pipeline, LLC’s San Elizario Crossing Project – a border crossing facility approximately 250 miles from the Project – as a connected action in FERC’s environmental review of the Project.

Full Story at Jordan Sanders Energy Report

Drilling Under Rio Grande Has Begun for Trans Pecos Pipeline

by Cameron Dodd

Contractors working on the 143-mile Trans-Pecos Pipeline started drilling beneath the Rio Grande last week.

Construction of the Presidio Crossing Project, the roughly 1000-feet of pipeline tunneling beneath the Rio Grande about 12 miles northwest of Presidio, commenced after the pipeline was granted approval by the Federal Energy Regulatory Commission (FERC) to drill from the U.S. side of the river.

Contractors drilled a six-inch pilot hole from the United States to Mexico under the river and international boundary. Fiber optic cables were run through the six-inch hole, according to the construction status update TPP filed with the Federal Energy Regulatory Commission (FERC).

The pipeline will be buried 69 feet beneath the Rio Grande, according to TPP plans submitted to FERC. Contractors are using a method called horizontal directional drilling, technology developed for drilling oil and natural gas wells. It is the same process that TPP is using to lay pipe beneath parts of highways 90 and 67.

TPP’s contractors drafted a directional drilling contingency plan that detail procedures for reporting and remediating any leaks of drilling fluid into the river itself. An environmental assessment conducted by FERC concluded the drilling would not significantly impact the river or other biological resources in the area.

The Federal Energy Regulatory Commission (FERC) approved Friday, Oct. 28 a request for a variance from the Trans-Pecos Pipeline (TPP). This was the second such variance TPP requested from the federal regulator.

FERC has regulatory jurisdiction over what is called the “Presidio Crossing Project,” the roughly 1,000 feet that the pipeline crosses under the Rio Grande. In the original plan for the Presidio Crossing, the pipeline company proposed to use horizontal directional drilling to burrow the pipeline under the river, beginning from the United States side.

Full Story at Big Bend Sentinel

RRC Says Trans Pecos Pipeline Offers Tactical Opportunities for Texas

by Trevor Hawes

Construction of the Trans-Pecos pipeline, which will transport natural gas from the Waha Hub in Fort Stockton to Mexico through the Big Bend region, has drawn many comments and concerns by residents and non-residents alike.

Railroad Commissioner Ryan Sitton shared his perspective about the 42-inch pipeline project and the opportunities it will bring to Texas. He also shared what he considers to be the coolest part about being on the Railroad Commission.

This is the third and final part of the Reporter-Telegram’s interview with Sitton. In the first part, the commissioner discussed DUCs, the gasoline glut and why it seems the Railroad Commission is always up for sunset review. In the second part, Sitton gave his insights into who he really thinks OPEC is competing with. Both interviews can be read at mrt.com

MRT: Do you have any comments about the ongoing construction of the Trans-Pecos pipeline?

Sitton: The pipeline is slated to move 1.4 million cubic feet of natural gas per day. When you look at national natural gas production, that pipeline is going to move about 2 percent of all the natural gas produced in the country. It’s really noteworthy that our natural gas production is really growing.

Take, for example, the connectivity in North America. Mexico is very interested in buying natural gas specifically from the state of Texas to power new power generation facilities. We have talked before about what opportunities that presents, but it’s also a practical example of the ability we have to move that gas in the state of Texas across the state to customers outside the state. It’s really good for our state.

I certainly understand why landowners are cautious. Heck, if a pipeline is coming across my property, I’m not excited about it, either. But this is one of those tactical things that really represents the opportunities that we’re talking about to move these products into those markets and not just compete economically, but succeed.

MRT: Do you get a sense that the Trans-Pecos pipeline will encourage the construction of more natural gas infrastructure in the Permian Basin?

Sitton: The short answer is yes, as will all of the natural gas demand. We know that natural gas demand is slowly but surely growing with exports and long-haul vehicles that are converting. All of that demand is going up. When you talk about this 42-inch pipeline, what we need now are the gathering systems to get it from the wellhead to the big pipeline. All of it together is going to drive that infrastructure.

Full Story at Midland Reporter-Telegram

 

Pipeline Company Gets Federal Approval to Build Presidio Border Crossing

by Joe Fisher

FERC on Friday granted Trans-Pecos Pipeline LLC’s request to begin construction of the Presidio Border Crossing Project, which would allow transport of natural gas from Texas to Mexico via the planned Trans-Pecos Pipeline.

In May the Federal Energy Regulatory Commission issued a presidential permit for the border-crossing facilities near the city of Presidio in Presidio County, TX, and the Mexican city of Manuel Ojinaga in the state of Chihuahua [CP15-500] (see Daily GPIMay 9). Trans-Pecos is a project of Energy Transfer Partners LP and Mexico-based Carso to export up to 1.3 Bcf/d of U.S. natural gas at the International Boundary between the United States and Mexico.

Environmentalists — led by the Sierra Club with support from landowners and residents in Texas along the pipeline route — have challenged the non-jurisdictional status of the Trans-Pecos pipeline. While the border crossing is governed by FERC, the pipeline is considered an intrastate and not subject to FERC jurisdiction (see Daily GPIJune 7).

The pipeline has garnered opposition from landowners and environmentalists concerned about the Big Bend National Park (see Daily GPIMay 21, 2015). Parties filing comments in the border crossing proceeding focused mostly on the larger pipeline project.

More Nat Gas Stories at NGI

Land Owner in Presidio Sues Pipeline Company

By CAMERON DODD

PRESIDIO COUNTY — As numerous landowners in Brewster and Presidio counties still face condemnation hearings, one Far West Texas rancher is taking legal action against the Trans-Pecos Pipeline.

Presidio County landowner John Boerschig is suing the Trans-Pecos Pipeline (TPP) company on the grounds that its use of eminent domain to take private land is unconstitutional. Boerschig faces a condemnation hearing on 13 acres of his nearly 11,000-acre South Shurley Ranch and is also seeking a preliminary injunction against the controversial natural gas pipeline.

Boerschig’s case was filed with the U.S. District Court in Pecos on Friday, July 1. It has implications for broader Texas law: the case asserts that Texas laws granting eminent domain to public utilities violate the clause in the 14th amendment to the U.S. constitution prohibiting government from making or enforcing law that deprives Americans of property without due process.

Texas state law grants eminent domain power to companies seeking to condemn land for public utility projects. Boerschig’s case asserts that without a procedure for Texas landowners to challenge a company claiming to be a public utility, such as TPP, the law denies due process rights guaranteed by the 14th amendment to the U.S. constitution.

Additionally, the State of Texas does not set any standards regulating the use of eminent domain powers, according to the case citation.

“It’s a no-strings-attached, standardless delegation of government power to a private entity,” Attorney Renae Hicks said. “There’s no accountability, they do not have to report to anyone.” Hicks, an Austin-based attorney, is representing Boerschig in the case.

Texas law, he said, lacks a process to challenge a private company claiming the power of eminent domain for use in the public interest.

As it stands, the law allows TPP control of condemned land after either settling on compensation privately with landowners or after a special commission awards damages to landowners in a public hearing. Either way, all that is to be determined is the value of damages to the remainder of the landowner’s property caused by the pipeline.

TPP’s status as a public utility with eminent domain power can only be legally questioned when the special commission’s award decision is challenged in court.

Full Story at Big Bend Sentinel

Railroad Commissioner Claims Trans Pecos Pipeline Vital to Texas and Mexico

Posted: Sunday, June 26, 2016 10:29 pm, Midland Reporter Telegram

By Trevor Hawes thawes@mrt.com

If there’s one thing Texas has a lot of, it’s pipelines. The energy capital of the U.S. has about 400,000 miles of pipeline delivering energy products throughout the state and into Mexico, which is hungry for more of Texas’ natural gas as the nation’s energy demands grow.

Railroad Commissioner Ryan Sitton spoke with the Reporter-Telegram on Thursday to discuss the Trans-Pecos Pipeline and what it will mean for Texas and Mexico’s futures.

MRT: How important is the state’s pipeline infrastructure to the economy?

Sitton: As all of these markets grow — oil and natural gas — infrastructure, such as pipelines, are going to be crucial to being able to move that product and get a good market for that product.

One of the things that any producer has to be thoughtful about and mindful of is, ‘I can drill a well and produce that oil or natural gas out of that well, and maybe the spot price today says I can command a pretty nice margin unless I can’t get it to market. If I have to put it in a truck, that’s going to chew up a lot of that margin through shipping it.’ So, pipelines are really vital, and industry has done a fantastic job in this state in building that infrastructure.

Mexico has 120 million people, produces something like 2.5 million barrels of oil and has 6,000 miles of pipeline. The state of Texas has 27 million people, produces around 3 million barrels of oil, and we have 400,000 miles of pipeline. One of our big advantages is our infrastructure. What we need to be doing, from a regulatory perspective, is making sure our environment that we are maintaining really continues to promote that development.

We had a case just two days ago that was a somewhat landmark case at the Railroad Commission because it dealt with the rates that pipeline operators can charge. Are we going to use a market-based rate or are we going to use a cost-of-service rate? I was very public about the fact that I thought market-based rates were vital because that allows companies that will invest huge capital to get a return on that capital from those who use these pipelines.

MRT: What will the Trans-Pecos Pipeline mean for the Texas and Mexico economies?

Sitton: I think it’s vital to both. Having made a trip to Mexico two months ago, we heard them talking about how one of their top priorities is to expand their electricity production using natural gas. We are, by far, the largest provider of natural gas to Mexico.

So, it’s crucial to them. It will enable them to build a robust energy infrastructure, and it’s a huge economic opportunity for us to sell that natural gas and gain a trade advantage. In other words, we sell that raw product and bring in those revenues both from a business perspective and a tax perspective right back into the state of Texas. So, it’s absolutely huge.

 Full Story at Midland Reporter-Telegram

Landowners Winning Lawsuits Against Pipeline Company

by Novena at Texas Observer

In a victory for Big Bend ranchers and conservationists, a Presidio county special commission has awarded six landowners about $2.8 million in compensation for the use of their property to construct the Trans-Pecos pipeline and the resulting loss in property value.

The assessment is close to 30 times the amount the company vying to build the pipeline offered as compensation for rights-of-way around the buried pipe.

Energy Transfer Partners (ETP) has so far filed eminent domain lawsuits against about 40 landowners in Brewster, Presidio and Pecos counties. At least seven of those cases were heard by special commissioners in the last week, according to attorney Zachary Brady, who represents landowners seeking higher compensation from ETP. Landowners prevailed in six cases, and commissioners ruled a seventh case in favor of the pipeline company.

The Trans-Pecos, a 143-mile pipeline that will move natural gas from the Permian Basin to the border at Presidio and into Mexico, has been a controversial issue in the Big Bend region since ETP announced plans to build it more than a year ago. Landowners and environmental advocates say the pipeline will ruin the region’s pristine wilderness and pose safety threats to nearby residents, while ETP says the project will improve air quality in the region by providing northern Mexico with low-carbon natural gas.

Full Story at Texas Observer

Does Trans Pecos Pipeline Threaten Marfa Lights?

By Sarah Laskow

Normally, part of the magic of Marfa’s mystery lights is that out on the flats, where the lights appear, there are no roads and no houses. Whatever the cause of the lights—and in 130 years, no one has ever been able to come up with a foolproof explanation—the lack of human activity has been a key part of the mystery of these red and white spots dancing on the horizon.

Right now, though, there is human movement out on the flats. Five miles to the southwest of the Marfa Lights Viewing Station, the low building erected at one of the most popular light-viewing spots, workers on the Trans Pecos pipeline are preparing to lay a 42-inch natural gas pipeline into the ground.

The Marfa lights in the distance. (Photo: Nicolas Henderson/CC BY 2.0)

“You can see the pipe from the viewing station with the naked eye,” says Alyce Santoro, a member of the grassroots group Defend Big Bend.

Landowners Go Public with Pipeline Offers

By Sasha von Oldershausen

PRESIDIO — “Seven thousand dollars,” said Debra Spriggs. “That’s all they think our land is worth.”

Spriggs, whose family’s ranch happens to be in the path of the proposed Trans-Pecos Pipeline, is one of several landowners frustrated with the way that Energy Transfer Partners (ETP) has conducted its easement negotiations.

As of two weeks ago, ETP — the energy company at the helm of the pipeline project — had filed 13 eminent domain lawsuits against [Presidio County] landowners who failed to come to an easement agreement. Though Spriggs and her family haven’t been served yet, the way things have been going, it’s more than likely they will.

“The negotiations aren’t really negotiations,” said David Williams, foreman of the MacGuire Ranch, who has been directly involved in the negotiation process with ETP’s landman. “We suggest one price and he suggests another; we have not been able to meet in the middle.”

In fact, said Williams, the last offer that the pipeline company made was just a fraction of their original offer. He said that ETP originally offered ranch owner Betty MacGuire $90 per rod. Each rod measures 16.5 feet long with approximately 320 rods to a mile. The MacGuire Ranch has roughly 4.5 miles of land under which ETP plans to run pipe, which would bring their grand total to $129,600—a one-time payment, according to ETP’s offer.

But after failed negotiations, ETP served the MacGuire Ranch with a petition that stated a suggested total of $37,070—which amounts to something closer to $26 per rod. The petition also indicated that should the proprietors commence proceedings of a lawsuit, ETP would reduce the suggested total even more—to $33,000.

Offers supposedly based on appraisal

The pipeline company says the process by which they determine their payments is based on land appraisals. “Qualified local real estate appraisers conduct appraisals to help ETP assess the fair market value of each property,” wrote ETP spokesperson Lisa Dillinger in an e-mail. “Easement compensation is based on the appraised fair market value, the existing land use (city, non-city, developed, non-developed) and overall market values for the specific area of the state. Possible impacts to the property during construction are also considered when applicable (crop loss, hunting impacts, etc.).”

Original Story at Big Bend Sentinel

Pipeline Company Continues Filing Suits to Claim Property

Nine new petitions of condemnation in Presidio County and three in Brewster County have been filed by Trans-Pecos Pipeline against local landowners since the Big Bend Sentinel/Presidio International’s last report on February 25.

Defendants in the Presidio County suits are Bar Triangle, Dorothy Holland Stillwell, Wyck Livingston, John P. Boerschig, Farm Credit Bank of Texas, The Mitchell Family Trust, William Kerr Mitchell Jr., Spriggs Engineering and Construction, and the Bryant Family Trust.

One suit in the county names Rio Grande Mining Co., Orion Mine (Master) Finance Fund, Terracon Consultants, Inc., Wyck Livingston, Presidio County, the Big Bend Regional Hospital District, and Presidio ISD.

The taxing entities named as defendants, Presidio County Attorney John Fowlkes said, is likely land foreclosed upon by the entities, in which small tracts of land were transferred into the ownership of the political subdivisions.

In those cases, Presidio County Judge Cinderela Guevara, Folkes said, will appoint a special commission to handle the suits, explaining that there are legal procedures the county, school district, and hospital district must follow.

Of all the suits filed by the company, only one has challenged the petition thus far.

Stillwell, who stands to lose 0.34 linear miles of land in the litigation, has filed a general denial motion in court.

The filing states: “Defendant denies each and every allegation of plaintiff’s original statement and petition in condemnation, and demands strict proof thereof as required by the Texas Rules of Civil Procedure.”

The general denial filing also requests that the defendant be awarded court costs, attorney fee, and “such other and further relief defendant may be entitled to in law or in equity.”

Stillwell’s attorney, Alan Carmichael of Sweetwater, Texas, could not be reached for comment as of press time.

Full Story at Big Bend Sentinel