Kinder Morgan sues county over requirement

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By David Long

Carbon-dioxide giant Kinder Morgan is suing Montezuma County over what it alleges are illegal and unreasonable requirements in regard to its booming development northwest of Cortez.

The Texas-based company, which is currently spending billions of dollars to expand its production facilities in Montezuma County, filed a lawsuit in District Court on Oct. 20 accusing the board of county commissioners of placing illegal hurdles in the way of a proposed electric-transmission line needed for development in what is known as the Cow Canyon area, near Pleasant View.

In addition to numerous drilling and collection sites and pipelines connecting them, the project will involve constructing about 10 miles of electrical lines to hook the various facilities together, and these power lines will run through many property owners’ fields and alongside county roads.

Following a public hearing in September, the county commission approved the high-impact and special-use permits required for Kinder Morgan to proceed with the project, but included a condition that agreements with all the affected landowners must be obtained before the project could proceed.

Several of those landowners spoke at the Sept. 22 hearing in opposition to the power lines being strung above ground through their fields, citing both visual blight and the poles’ interference with irrigation, plowing and harvesting operations.

Despite a Kinder Morgan engineer’s assertion that the route had been designed to be the “least impactful route for the transmission lines,” the commissioners expressed grave reservations about the plan and joined in the farmers’ concerns.

Commissioner Larry Don Suckla said it “weighs heavy on my mind” that few of the surface-use agreements had been signed and Chairman Keenan Ertel concurred, stating the agreements must be completed to “the satisfaction of the landowners” as a condition of the permit to begin the massive expansion.

The commissioners also considered requiring that the lines be buried along the 10-mile stretch, but ultimately voted 3-0 to allow the permits, with a condition that agreements be reached with all 21 affected landowners before the project could proceed.

It is this issue that is being contested by Kinder Morgan, which argues that the county commission acted beyond the scope of its authority in demanding a condition that is specifically not required under the federal leases the company holds. The company bases its assertion on past rulings by various courts as well as the Colorado Oil and Gas Conservation Commission and the federal Bureau of Land Management.

Commonly, private landowners do not own the rights to whatever mineral resources may lie underneath the land, and the right to develop and extract those resources is obtained through the purchases of leases from the federal government.

“With respect to rights of access generally, Colorado and other courts frequently have reiterated the principle that a lessee has the right to use the surface of the lands covered by its leases to the extent reasonably necessary to explore for, drill for and produce the minerals beneath the surface,” the complaint argues.

Furthermore, Kinder Morgan holds, the company is “only obligated to make a good-faith attempt to reach an accommodation with the surface owners to the extent possible and consistent with its right to develop the minerals,” and has done so by contacting and sending letters proposing agreements all the landowners. The lawsuit states the company is not required (emphasis added) to obtain agreements with all individual surface owners as a condition of obtaining a permit from the county, noting there is nothing in the county’s land-use code to this effect either.

At the time of the Sept. 22 hearing, Kinder Morgan representatives said they had obtained no agreements with landowners, but stated in the lawsuit they have since obtained eight agreements.

In its complaint and request for a judicial review and a declaratory judgment from the 22nd Judicial District, company attorneys argue this “condition [of obtaining all landowner agreements] imposed by the board disregards Kinder Morgan’s vested property rights, exceeds the [county commission’s] jurisdiction and constitutes an abuse of discretion.”

“Kinder Morgan acknowledges,” the complaint states, “it has a good faith obligation to endeavor to reach accommodations regarding logistics with surface owners, but under Colorado law and the Unit Agreement for the McElmo Dome Unit, Kinder Morgan has a legal right of reasonable access to and use of the surface estate for purposes of development of the mineral estate, regardless of whether the current surface owner ultimately consents.”

In correspondence with John Baxter, the commission’s attorney, Kinder Morgan counsel Jessica Toll also asserted the company doesn’t need the landowner agreements to move forward:

“It is important to note that the leases, the unit agreement and the law provide the right to proceed with or without an SUA [surface-use agreement] in place. Accordingly, while obtaining an SUA may be a best practice, it is not required and KM has the right to construct the project without SUAs.”

No court hearing date has been set and the county has 21 days after notice of the action to respond; however, a representative from Kinder Morgan’s corporate headquarters was scheduled to address the commissioners on Monday, Oct. 27, at 11:30 a.m. to talk about the Cow Canyon project in general.

 

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