Federal appeals court rules in favor of Port of Houston regarding pipeline relocation costs

By OGJ editors
HOUSTON, Feb. 6 -- A US federal appeals court has ruled that companies having pipelines across the Houston Ship Channel must pay for pipeline relocations to accommodate a deepening and widening of the channel.

The decision "vacated in part" a summary judgment made by US District Judge Lynn Hughes 2 years ago. Hughes favored the pipeline companies in a 1998 lawsuit against the US Army Corps of Engineers and the Port of Houston Authority.

The 5th Circuit Court of Appeals in New Orleans ruled Jan. 30 that the Corps and the port were not responsible for the cost of relocating 130 pipelines, which carry various chemicals, petrochemicals, crude oil, and natural gas.

The port argued successfully that both federal law—the Rivers and Harbors Acts of 1899—and the pipeline licenses required the pipeline owners to pay an estimated $100 million in relocation costs.

"The Corps has the authority, under the federal navigational servitude, to require owners to pay the relocation costs according to the original permits, as necessitated by the project," the appeals court ruling said.

The port authority issued those permits. "As owner of the land under the ship channel, the port authority sought to protect the interest of Harris County taxpayers," said Jim Edmonds, chairman of the port authority.

In 1996, the US Congress authorized a project to deepen the ship channel to 45 ft from 40 ft and to widen it to 530 ft from 400 ft. The $130 million project is intended to make room for larger international cargo vessels.

More than 20 companies are plaintiffs in the lawsuit. They include Air Liquide America Corp., EGP Fuels Co., Equilon Pipeline Co. LLC, Exxon Pipeline Co., Florida Gas Transmission Co., Houston Pipe Line Co., HSC Pipeline Partnership LP, Mobil Chemical Co., Chevron Pipeline Co., and Dynegy Midstream Services.