Eminent Domain Controversy for Foreign Oil & Gas Delivery

By Attorneys & Counselors Shane Neldner and Patrick Reznik

The public may not be served when pipeline companies ship oil and natural gas from Texas to foreign markets. Private pipeline companies have long-enjoyed the power of eminent domain. The Fifth Amendment to the US Constitution states “nor shall private property be taken for public use, without just compensation.” The term “public use” remains controversial among landowner rights groups as they question whether a pipeline company piping and selling Texas produced oil or gas to Mexico for profit is a Texas “public use.”

Groups dedicated to landowner rights and environmental protection are looking for a way to deny the power of eminent domain for pipeline projects that don’t actually directly serve a “public use” of Texans. These groups argue that not only do pipelines that send oil to foreign markets fail to benefit the Texas public, they actually hurt the public by driving up domestic oil and gas prices. These groups argue that such factors should disqualify a pipeline project company from taking property for “public use.”

These theories are largely untested, but pipeline companies are taking it seriously. They quickly point to the number of construction jobs they create, and some pipeline companies are installing domestic branches to the pipeline to foster local economic development opportunities, and taking other measures to demonstrate that their project benefits the Texas public.

A recent and interesting “public use” opinion from the Colorado Court of Appeals is Carousel Farms Metropolitan District v. Woodcrest Homes, Inc., No. 2017COA149 (Nov. 30, 2017). The Court invalidated an attempted taking of Woodcrest’s property, concluding that the condemnation was neither for a public purpose, nor necessary for that purpose. The attempted taking for a public road was not for public use but the alter ego of the land developer.

Braun & Gresham, PLLC and groups dedicated to landowner rights are not satisfied by these measures. We are following developments, and will keep you updated. For questions about eminent domain, give us a call at 512-894-5426.

1 Comment

  1. Dick Winters
    May 4, 2018

    Thank you for watching this…far too much abuse of the system.

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