Houston pipeline operator Kinder Morgan has sued a suburb of the Texas capital city of Austin over passage of an ordinance the company alleges is designed to keep its proposed Permian Highway natural gas pipeline out of town — despite the route being approved by state regulators.
In a lawsuit filed last week in U.S. District Court in Austin, Kinder Morgan alleges the City of Kyle overstepped state and federal law when city council members passed a July 2 ordinance regulating the construction of natural gas lines within city limits, Kallanish Energy learns.
Kinder Morgan’s $2 billion Permian Highway Pipeline is designed to connect the Permian Basin of West Texas to the Katy natural gas hub near Houston. The 430-mile, 42-inch line is designed move 2 billion cubic feet per day of natural gas.
Opponents unsuccessfully tried to stop the project by suing Kinder Morgan in a state district court in Austin, the Houston Chronicle newspaper reported. A judge tossed the suit in June.
Shortly thereafter, the Kyle City Council passed an ordinance stating all natural gas pipelines with a 30-inch or larger diameter would require a city permit.
The ordinance also imposes fees, including a $2,500 permit application fee and a fee per linear foot for city right-of-way used. By comparison, the Railroad Commission of Texas, which regulates pipelines and the oil and gas industry, charges a per-mile fee for pipeline projects and a $500 permit application fee.
Kinder Morgan is asking Judge Robert Pitman to issue an injunction suspending the ordinance until the case is settled.
“While municipalities have the authority to impose certain fees in discrete circumstances under Texas law, those fees must be both reasonably calculated and tied to the actual costs incurred by the city administering valid municipal regulations,” Kinder Morgan said, in a statement. “The fees the City of Kyle is attempting to collect are neither.”
In addition to the lawsuit, Kinder Morgan has also filed a complaint with the Railroad Commission, which states the Permian Highway Pipeline’s route affects the fewest number of landowners and is environmentally sound, the Chronicle reported.
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