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TransCanada Temporarily Blocks Texas Pipeline Easement Case

TransCanada Corp. (TRP) won temporary dismissal of a landowner’s bid to take back an easement that lets the Keystone XL Canadian tar-sands pipeline cross his farm after a judge in Texas said he had no authority to hear the dispute.

“If you want to have an easement vacated, only the district court can do that,” Jack Sinz, a county court judge in Nacogdoches, Texas, said at a hearing today. “All you have to do is walk down the hall and refile the case in district court.”

Michael Bishop, a 64-year-old retired chemist who owns a biofuels company, sued Calgary-based TransCanada in November to rescind the easement, which he claims the company acquired by fraudulently misrepresenting what Keystone will transport. The pipeline is the southern leg of a 2,151-mile pipeline intended to carry tar-sands crude from western Canada to the U.S. refining industry complex on the Texas Gulf coast.

James Freeman, the pipeline’s lawyer, characterized the dispute as one for “the recovery of land,” which he said falls outside of a county judge’s authority under state law.

Bishop urged Sinz to continue presiding over the dispute, which he claims doesn’t concern title to Keystone’s easement across his 20-acre farm. He said he is still listed on county tax rolls as the landowner because TransCanada acquired solely a right of way, not title to the tract in Nacogdoches, about 140 miles (225 kilometers) northeast of Houston.

‘I’m the Judge’

“An easement is a title to property -– you can shake your head but I have to rule on the law,’’ Sinz told Bishop at the hearing. ‘‘Once you gave up the easement, it is no longer an eminent domain case. I’m the judge but I can’t just go hear any case I want.’’

Bishop agreed to sell TransCanada the easement in November after fighting the company in condemnation proceedings for more than two years. He said he felt pressured to accept the company’s offer before TransCanada took the easement anyway at a much lower price through eminent domain.

The retired chemist has asked Sinz to determine whether TransCanada fraudulently obtained the easement by deceiving landowners and state regulators that diluted bitumen, which is obtained from tar sands, is a form of crude oil when opponents of the pipeline contend it isn’t.

Bishop and environmental groups claim diluted bitumen is more toxic and corrosive than conventional crude oil. Bitumen has the consistency of peanut butter at atmospheric temperatures and pressure and must be diluted for pipeline transport, according to court filings.

Bishop claims TransCanada ‘‘intentionally misled and misrepresented” the nature of its product to regulators, landowners and the public in order to obtain permits and eminent domain rights to push its project through.

Proper Jurisdiction

“I can’t decide this case on whether it is diluted bitumen or crude oil; that’s no longer the issue,’’ Sinz said at the hearing. ‘‘Seeking to remove someone’s right to an easement is a district court matter.’’

Bishop told the judge he would immediately appeal his dismissal of the case.

‘‘It ain’t over till it’s over,’’ Bishop told supporters outside the courtroom.

Environmental protesters and landowners have battled TransCanada construction crews at numerous locations along the pipeline route in an attempt to highlight what they claim is the Keystone’s potential for environmental catastrophe, should the line leak or rupture.

At least three other landowners are pursuing legal challenges in Texas courts designed to block Keystone from crossing their properties. So far, none of these court challenges has permanently stopped construction on the line.

To contact the reporter on this story: Laurel Brubaker Calkins in Nacogdoches at laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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