Deep in the undercurrents of the 83rd legislative session, a storm is brewing that strikes fear in the hearts of many Republican lawmakers.
It may, ultimately, force them to choose between disappointing private property rights advocates, or going against some of the powerful oil and gas interests that give generously to their political campaigns. It is a choice few want to make.
Though the conflict has played out largely behind the scenes, two of the nation’s richest family dynasties — the powerful Bass family from Fort Worth and the Koch brothers of Kansas and New York — are pitted against one another, with trial lawyers, environmentalists, farmers and ranchers thrown into the fray.
“It’s sort of a battle of the titans,” said state Rep. Dennis Bonnen, R-Angleton.
At issue are the legal powers given to energy companies to condemn and take private land for pipelines.
For years, pipeline companies have found it relatively easy to use the eminent domain process to acquire private property. Landowners have little choice but to give up their land, though they can haggle over price.
But to wield the power of eminent domain, pipelines must be considered “common carriers,” meaning they allow other companies access to their pipes. Companies building pipelines for their own use face a more difficult — and often expensive — task in negotiating the necessary rights.
To be a common carrier, companies have needed to do little more than check a box on a form at the Texas Railroad Commission, the state’s oil and gas regulator, attesting that they are — or intend to be — a common carrier.
But a 2011 Texas Supreme Court decision cast a cloud of uncertainty over the process.
In Texas Rice Land Partners v. Denbury Green Pipeline-Texas, LLC, the court ruled that a company is not entitled to common carrier status simply by stating that it would make its pipeline available to others. There needs to be more proof that pipelines would carry products for other companies, the court said.
Though the court’s ruling dealt only with pipelines carrying carbon dioxide, many people believe the ruling applies to all pipelines.
The ruling created a prospect for Texas landowners facing condemnation to file lawsuits in counties across the state challenging common carrier status. The result for energy companies could be years of expensive lawsuits in dozens of the state’s 254 courthouses. Such delays and uncertainty would be unwelcome for interests with millions — and possibly billions — of dollars at stake, so they are asking lawmakers to patch the hole in the dike.
But the two sides envision very different solutions.
The Bass family, which controls one of the nation’s largest privately held oil businesses in Bass Enterprises Production, is allied with landowners who want protection from unscrupulous companies that pose as common carriers to take advantage of eminent domain laws.
The Basses essentially are involved because they believe passionately in property owners’ rights, a source close to the family said. They want a law providing clear notification, and allowing landowners to challenge pipeline companies in courts in their home counties.
On the other side, the Koch family — which runs Koch Enterprises, a multi-national conglomerate with petroleum interests — and some energy companies support new laws letting the Railroad Commission and Travis County courts handle all challenges to common carrier status, sources with knowledge of the situation said.
Two years after the court’s ruling, state Rep. Tryon Lewis, R-Odessa, and state Sen. Robert Duncan, R-Lubbock, introduced bills to address the court’s concerns. Both have failed to get much traction.
In the House, Lewis — saying he wants nothing to hobble the Texas oil and gas business — tried to give the Railroad Commission power to determine common carrier status, and limit landowner appeals to Travis County courts.
Lewis also said pipeline companies must notify the public of their plans in each community’s newspaper.
Lewis’ House Bill 2748 died by a parliamentary procedure, though it could be resurrected as an amendment to another bill.
“If the Legislature doesn’t act, what we’re going to have is lots of lawsuits — thousands of lawsuits,” Lewis said. “That kind of chaos, we don’t need.”
Meanwhile, Duncan’s Senate Bill 1637, similar to Lewis’, hadn’t left committee as of Thursday.
The Koch and Bass families might be the names at the top of the political fight card, but lots of other people and groups also are intertwined.
Bill Miller, a longtime lobbyist with HillCo Partners, said the fight has brought together a large array of heavy-hitters.
“You’re talking big business in Texas,” said Miller, whose office has worked for the Koch and Bass families. “That’s Texas-sized issue.”
With oil and gas interests at odds with private property rights advocates, the face-off spooks Republicans, and some Democrats.
If there is ever a vote, lawmakers know they would be put in the miserable position of infuriating one of the powerful interests.
Conservative private property rights advocates might become angry enough to find primary opponents to run against incumbents. Conversely, oil and gas interests might be less inclined to open checkbooks during campaign season.
Just about every member in the House felt torn before Lewis’ bill died, Bonnen said. “A lot of members were relieved to not be forced to choose sides in that fight.”
And just to make things even more interesting, some wealthy and politically active Texas trial lawyers and their arch-enemies, Texans for Lawsuit Reform, are also in the mix.
Steve Mostyn, a trial attorney known for frequent donations to Democrats, sided with Basses.
“It’s about fundamental property rights and access to court,” Mostyn said.
Mostyn’s involvement came after Texans for Lawsuit Reform, the state’s biggest tort reform group, stepped out in favor of the policies backed by the Koch family.
If something isn’t done in the Legislature, energy development will be slowed and there will be an “explosion of lawsuits,” according to a statement from Texans for Lawsuit Reform.
Lobbyist Miller said he doesn’t see a clear path for common carrier legislation right now. And with the end of the session looming just about two weeks away, it could be difficult to get something out of the Legislature
He said: “This might be a harbinger of a bigger fight next session.”