Denbury Green pipeline controversy heads to Texas Supreme Court

Steve Korris Feb. 16, 2011, 3:10am

Photo of construction on the Denbury Green pipeline from the company website.

AUSTIN – State Supreme Court justices will review Jefferson County District Judge Donald Floyd's grant of eminent domain power to owners of a carbon dioxide pipeline.

The justices will hear oral argument April 19, on an appeal from property owner Texas Rice Land Partners and tenant Mike Latta.

Floyd ruled that Denbury Green Pipeline-Texas could enter the property as a common carrier under the Texas Natural Resources Code.

According to the company website, Denbury is constructing a 24-inch pipeline from Donaldsonville, La., to Hastings Field, south of Houston.

"The approximately 320-mile pipeline, estimated to cost a total of $825 million, is designed to transport both natural and man-made CO2. The Green Pipeline will be one of the first pipelines designed to transport anthropogenic CO2 in the Gulf Coast area," the site says.

The Ninth District Court of Appeals affirmed Floyd, two to one.

The Texas Railroad Commission issued a permit to Denbury Green in 2008, finding it made all necessary filings for classification as a common carrier.

That didn't impress Latta and his landlord, who wouldn't let surveyors on the property.

Denbury Green petitioned for a temporary restraining order, and Floyd granted it.

Both sides moved for summary judgment, and Floyd granted it to Denbury Green.

He found Denbury Green proved it was a common carrier with authority to condemn and take.

He permanently enjoined Texas Rice and Latta from interfering with Denbury Green's right to enter and survey the route of the pipeline it proposed.

He enjoined Texas Rice from harassing Denbury Green's employees and contractors.

On appeal, Chief Justice Steve McKeithen and Justice Charles Kreger decided they must give great weight to determinations of the Texas Railroad Commission.

Denbury Green submitted itself to TRC jurisdiction, Kreger wrote.

He wrote that company vice president Ray Dubuisson stated in an affidavit that Denbury Green was negotiating with other entities to transport carbon dioxide.

He wrote that Dubuisson stated Denbury Green might transport other entities' carbon dioxide, "from anywhere near the pipeline."

Kreger wrote that those facts supported Denbury Green's contention that it is a common carrier.

He wrote, "Denbury Green's pipeline will be available for public use from the outset of its operation."

Dissenting Justice David Gaultney found evidence that Denbury Green intends to use the pipeline as an essential part of oil production operations.

"Denbury's description of the pipeline's purpose indicates the CO2 it transports in the pipeline will be its own," he wrote. "How then does Denbury Green have the power to take the private property of another to accomplish this purpose?"

Gaultney wrote that the Constitution does not authorize the taking of private property for regulated private use but for public use.

"Is the intent to make a pipeline running from a Denbury well to a Denbury well available for use by the 'public for hire' reasonable?" he wrote, "The summary judgment record is not entirely clear on that question."

Gaultney wrote that he would have remanded the case to Floyd for trial.

Anthony Brocato represents Texas Rice, and Marcus Pitre represents Latta.

Thomas Buchanan, Jack Strother and Michael Baker represent Denbury Green.

Jefferson County Case No. E181-923

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