Proposed $2B gas pipeline to cut through Hays County

(Map courtesy Kinder Morgan)

A proposed $2 billion, 430-mile pipeline that would funnel natural gas from the Texas Permian Basin to the Gulf Coast is expected to cut through Hays County.

In September, Kinder Morgan Texas Pipeline (KMTP), LLC, a multi-million dollar Houston-based energy infrastructure company, announced its final investment decision to move forward with the Permian Highway Pipeline Project.

That project calls for a 430-mile underground pipeline that starts in Waha in far west Texas and stretches across the Hill Country before ending in Colorado County, roughly 80 miles west of Houston.  Officials estimate construction starting by fall 2019 and for the pipeline to be in service by the fourth quarter of 2020.

According to a KTMP release, the project will transport up to 2 billion cubic feet per day of natural gas through a 42-inch pipeline with connections to the U.S. Gulf Coast and Mexico markets. According to the release, shippers that have committed to the Permian Highway Project include EagleClaw, Apache Corporation and XTO Energy, Inc., which is a subsidiary of Exxon Mobil Corporation among others, according to the KTMP release.

Roughly 31.5 miles of the proposed pipeline will go through Hays County, said Allen Fore, vice president of Kinder Morgan. The pipeline will stretch through areas between Wimberley and Dripping Springs, as well as areas between San Marcos and Kyle. The project will add to the 13.5 miles of existing KMTP pipeline in the county.

Fore said the purpose of the pipeline is to take excess natural gas as part of crude oil production in West Texas and get it into the market. Fore said it will avoid flaring, or burning off excess natural gas, and capture “an important natural resource and get it to markets for producers.”

Construction along the pipeline route will create 2,500 jobs, with KMTP paying an estimated $1.6 million in ad valorem revenue annually to entities in Hays County. The company currently pays roughly $20,000 in annual property tax.

KMTP is currently going through the introductory phase of the project with affected landowners, as well as local municipalities and entities. Kinder Morgan has started the negotiations process for 82 parcels of land in Hays County needed for the project.

The company continues to secure the necessary permits and regulatory requirements needed prior to construction. That includes working with the Texas Railroad Commission, the U.S. Fish and Wildlife Serivce, the U.S. Army Corps of Engineers and the Texas Commission on Environmental Quality.

However, the current proposed route is at a “high level” and modifications are expected as KMTP takes a closer look, Fore said.

“A lot of time and planning has gone into it before we proposed it and we don’t propose projects that don’t meet or exceed requirements from regulatory agencies,” Fore said. “We know what they want and expect and they’re vigilant and we’re very much an advocate for environmental and landowner concerns.”

Rising tide of concerns

But concerns are growing among landowners who have already been contacted by KMTP as part of eminent domain proceedings.   

Patrick Reznik, attorney and counselor at Braun and Gresham law firm in Dripping Springs, said KTMP is currently asking to survey affected landowners property, which is one of the first steps in the process.

That process is done via land agents, who contact landowners and try to work out compensation and easement terms and set up a possible survey.

Fore said those surveys determine the suitability for construction in a civil and environmental manner.

However, many property owners are concerned about the potential impact the pipeline. One issue extends to property damage due to installation of the line.

KTMP requires a 50-foot easement on a property for the 42-inch line, as well as a 50-foot temporary easement to allow for equipment to dig the line.

“Growth or trees within that 100 feet –  it’s all going to be cleared,” Reznik said.

Worries also extend to property devaluation as a result of removing wooded area and trees. Additionally, existing laws permanently prohibits construction or development over the 50-foot easement. The only exception extends to residential or commercial utility or infrastructure lines, Reznik said.

A “sense of anger” is also brewing among some property owners who question the need for a pipeline in the area. Reznik said while areas in South Texas are used for energy pipeline, areas in Hill Country, such as Gillespie, Blanco and Hays counties are not used to such a practice.

Concerns about safety of having a natural gas pipeline on their property also circles in the minds of homeowners, Reznik said.

Constant monitoring of the line, ranging from internal checks utilizing high-end equipment, to external aerial photography to prevent encroachment on the easement, assists KMTP in maintaining safety of its pipeline, Fore said.

“It’s upsetting to landowners who are going to see massive amounts of trees cleared from properties,” Reznik said.

KMTP plans to meet with affected landowners and discuss all phases of process, including construction. The goal is to start discussions early and have a good dialogue, in order to accommodate any concerns landowners might have.

They also plan to minimize environmental impact on landowners, while also taking into consideration the affect to property in the short and long term.

KMTP attempts to plan its pipeline routes by avoiding areas that are either residential or currently being developed, Fore said. The company will also work with local entities as well, primarily when it comes to crossing major highways and roadways.

The company will cross several county roads, as well as bore under Interstate 35 between San Marcos and Kyle for the pipeline.

Fore said the company does not see adverse impacts on property values due to those factors, but it also depends on each property as well.

KMTP will work with appraisers who take into account the “uniqueness of a person’s property.” Ultimately, the deal is a real estate transaction, where KMTP pays fair market value for “what it would cost to buy” the easement.

“Landowners are smart. They’re going to inform us of the uniqueness of the property and that’s part of the negotiations process,” Fore said.

Fear and confusion during negotiations process, however, drives additional landowner worries, Reznik said. If a company cannot come to terms with a landowner, they could choose to sue, which leads to a hearing with special commission.

Fore said conversations in the past between KMTP and landowners end well, and residents are “satisfied and agreeable to what we’re proposing.”

“If Kinder Morgan offers fair easement and construction terms to landowners, that’s a good thing, even though most landowners in Hays and Gillespie County don’t want this pipeline,” Reznik said. “But they may not have a choice.”

Hays County roads that could be impacted by the projected pipeline path (according to Kinder Morgan’s map)

• RM 2325
• RM 12
• FM 3237
• FM 150
• Interstate 35
• SH 21

A “sense of anger” is also brewing for some property owners, who also question the need for a pipeline in the area. Reznik said while areas in South Texas are used to energy pipelines, areas in Hill Country, such as Gillespie, Blanco and Hays Counties, are not used to such a practice.

Concerns over the safety of a natural gas pipeline on their property also circles in the minds of homeowners, Reznik said.

Constant monitoring of the line, ranging from internal checks utilizing high-end equipment, to external aerial photography to prevent encroachment on the easement, assists KMTP in maintaining safety of its pipeline, Fore said.

“It’s upsetting to landowners who are going to see massive amounts of trees cleared from properties,” Reznik said.

KMTP plans to meet with affected landowners and discuss all phases of process, including construction. The goal is to start discussions early and have a good dialogue, in order to accommodate any concerns landowners might have.

They also plan to minimize environmental impact on landowners, while also taking into consideration the affect to property in the short and long term.

Avoiding areas that are either residential in nature or currently being developed is how KMTP plans its pipeline routes, Fore said. The company will also work with local entities as well, primarily when it comes to crossing major highways and roadways.

The PHP will cross several county roads, with KMTP needing to bore under Interstate 35 between San Marcos and Kyle for the project.

KMTP will work with appraisers who take into account the “uniqueness of a person’s property.” Ultimately, the deal is a real estate transaction, where KMTP pays fair market value for “what it would cost to buy” the easement, Fore said. Once construction is completed, the temporary easement goes back to the landowner.

“Landowners are smart. They’re going to inform us of the uniqueness of the property and that’s part of the negotiations process,” Fore said.

Fear and confusion that could come during the negotiations process, however, drives additional landowner worries, Reznik said.

Fore said conversations in the past between KMTP and landowners end well, and residents are “satisfied and agreeable to what we’re proposing.”

“If Kinder Morgan offers fair easement and construction terms to landowners, that’s a good thing, even though most landowners in Hays and Gillespie County don’t want this pipeline,” Reznik said. “But they may not have a choice.”

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