Sept. 28 (Bloomberg) -- TransCanada Corp. won court permission to build part of its Keystone XL pipeline across several contested tracts of southeast Texas farmland to carry Canadian tar-sands crude to Gulf Coast refineries.
State judge Tom Rugg Sr. granted the pipeline company’s requests to take possession of the tracts under state eminent-domain laws after a hearing today in Beaumont, Texas.
“The statutory requirements for the issuance of writs of possession are now met,” Rugg said in a two-page ruling, after TransCanada agreed to increase the size and type of surety bonds it posted in the proceeding.
The landowners urged Rugg to deny TransCanada’s access to the disputed tracts, citing a Texas Supreme Court ruling last year that limits the condemnation powers that pipelines can use under state law.
Rugg told lawyers in a letter this week that he wouldn’t hear the landowners’ challenges under the new high-court standards at this stage of the proceedings. A Texas appeals court is scheduled to hear arguments next week that rely on the ruling in a separate eminent-domain case against the Keystone XL pipeline.
Rugg gave Calgary-based TransCanada possession of the disputed easements after the company agreed to post adequate surety bonds against potential damages, as required under state law. Rugg temporarily blocked the pipeline company from accessing one of the disputed parcels until all owners of that land received the proper legal notice of the eminent domain proceeding.
One of the landowners, David Holland, claimed in court filings that the bonds TransCanada posted this month were inadequate. He said the bond for his property represented less than 5 percent of the price TransCanada offered him before negotiations broke down.
The bonds are based on assessed value of the property that’s used for the easement as set by an independent county commission.
Holland said he rejected TransCanada’s offer of $446,864 for an easement primarily because the company refused to accept liability for any future disaster and wouldn’t lower the Keystone XL to pass under existing streams and heavy-equipment crossings on the property. He said TransCanada’s refusal of “customary easement terms” made the Keystone XL more environmentally risky than other pipelines that had accepted his terms to gain easements across the farm.
Tom Zabal, TransCanada’s lawyer, argued in court filings that the pipeline didn’t need court permission to take possession of the easements because the company fulfilled all requirements of Texas’s eminent-domain statute. He said the pipeline sought the writs of possession to reinforce Keystone’s legal rights in case landowners tried to block pipeline crews from reaching the easements.
In an interview before the hearing, Holland said he will continue fighting TransCanada on principal, just as he did in a different eminent-domain dispute with another pipeline. In that case against a unit of Denbury Resources Inc., Holland took the case to the Texas Supreme Court, where he won the ruling activists hope will help derail the Keystone XL in an appeal involving an unrelated tract.
The case is TransCanada Keystone Pipeline LP v. Texas Rice Land Partners Ltd., 0118867, County Court at Law, Jefferson County, Texas (Beaumont).
To contact the reporter on this story: Laurel Brubaker Calkins in state court in Beaumont, Texas, at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com