DISH — After last week’s Town Hall meeting ended, the sum total of traffic on the southern end of town included a boy riding his bike and Jim and Judy Caplinger taking their pickup back home, where yet another Barnett Shale gas pipeline is being installed.

Here, quiet country roads crisscross over the top of miles of buried, high-pressure pipeline that converge at the south end of town where several energy companies operate compression plants. Dish officials liken the area to the Grand Central Station of the Barnett Shale.

DRC/Barron Ludlum

Two energy companies are again building pipelines that take gas mined from the Barnett Shale to a compression plant in Dish. Because the multiple pipelines require easements that compromise future economic development, Dish officials want cities to have more authority over where the pipelines are installed.

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But an emerging practice by energy companies — using eminent domain power to build multiple, redundant pipelines across properties between gas wells — has Dish officials and other Barnett Shale cities concerned.

Dish Town Commissioner William Sciscoe, who has leased his mineral rights, has become increasingly frustrated by the companies’ practice of digging through people’s yards and driveways.

“It’s been heart-wrenching,” Sciscoe said. “People have no say, no recourse. There are high-pressure pipelines, literally, under their toes in their front yards and driveways.”

In Copper Canyon, Mayor Sue Tejml said residents have become concerned, too, as pipeline construction rushed in behind the drilling of several new horizontal wells there.

Energy companies have discovered they can create a gas utility company — with the power to condemn property — and install their own lines, according to Dish’s town attorney, Bryn Meredith. These midstream companies, even though they compete with each other to get the gas to the market, have the same power over private property as a public utility.

Meredith said that just reading the plain language of the statute makes him question whether the Texas Legislature intended private energy companies to have the same eminent domain power meant for public utilities.

“I don’t think the development of the Barnett Shale was anticipated and that the law was meant to give midstream companies this type of power,” Meredith said.

Mayor Calvin Tillman said the immense Barnett Shale activity has all but doomed future economic development in Dish. Many properties have long, wide easements across them. One local developer struggled to draw lots for his subdivision to work around the easements. He’s afraid what’s happening in Dish could happen to many other Barnett Shale cities, “especially the small ones,” Tillman said.

So Dish officials decided to take the lead, passing a resolution this week asking the Texas Legislature for help in regulating pipelines. They are mailing copies of the resolution to all the Barnett Shale cities asking them to pass the resolution, too. Tillman said he plans on traveling to as many of the cities as he can — he estimates there are about 100 — and speaking directly to their councils.

Some cities have already passed resolutions challenging pipeline company operations within their boundaries, such as North Richland Hills, Southlake and Mansfield, Meredith said. But Dish’s resolution asks the Legislature to give cities the authority over midstream pipelines so that they can better plan for their residents’ future, Meredith said.

State Rep. Tan Parker, R-Flower Mound, said Friday that he appreciates Dish’s perspective and he is anxious for himself and other legislators to look at the issue.

As one of the few independent midstream companies in the Barnett Shale, Crosstex Energy Services must compete with the midstream companies being formed by other energy companies. Crosstex spokeswoman Jill McMillan said the company has tried to work cooperatively with cities and property owners.

Being able to move the gas to market quickly and efficiently pays off in lower energy prices for the consumer, but McMillan acknowledged the underlying property issues are complex.

“Dish is sticking their head out for this,” McMillan said. “But maybe we’ll all be stronger at the end of the day for it.”

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.

RESOLUTION WORDING

A RESOLUTION OF THE TOWN OF DISH, TEXAS OPPOSING THE CONTINUED PREEMPTION OF MUNICIPAL REGULATION OF CERTAIN INTRA-STATE GAS UTILITIES; URGING LEGISLATIVE ACTION TO PERMIT GREATER LOCAL REGULATORY OVERSIGHT; AND PROVIDING AN EFFECTIVE DATE.

WHEREAS, the Town of DISH, Texas is a Type C general law municipality located in Denton County, and created in accordance with the provisions of Chapter 8 of the Local Government Code and operating pursuant to the enabling legislation of the State of Texas; and

WHEREAS, the Legislature has vested regulatory authority in the State and has largely preempted the local regulation of so-called “midstream” intra-state natural gas pipeline utilities (“gas utilities”) on the basis that such companies are affected with a public interest; and

WHEREAS, the preemption of local regulation constrains the ability of the public to participate through their locally elected officials to tailor policies to meet their needs and demands; and

WHEREAS, with the recent development of mineral reserves within the Barnett Shale, oil and gas operators have become dependant on a comprehensive pipeline infrastructure to deliver the produced hydrocarbons to market; and

WHEREAS, in order to ensure the maximum profitability of natural gas production, oil and gas operators have refused to cooperate with unaffiliated third party gas utilities or coordinate pipeline efforts with other producers in the region and instead are each opting to form their own affiliated gas utility company; and

WHEREAS, each gas utility company serves not as a public-minded “utility” accepting produced hydrocarbons from “competing” operators but operates exclusively as the alter ego and servant of the utility’s affiliated oil and gas operator greatly blurring the line between gas utility and oil and gas operator; and

WHEREAS, the numerous gas utilities, frequently managed and exclusively operated by the affiliated oil and gas operators’ own employees, work aggressively to install a network of permanent gas lines across private property creating extensive “no-build” zones many dozen feet in width and many miles in length, with little regard for the availability of existing unaffiliated pipelines in the vicinity; and

WHEREAS, in order to rapidly accomplish the installation of duplicative and redundant pipeline networks, local citizens and business owners are quickly threatened with eminent domain proceedings by the gas utilities and are intimidated into executing one-sided permanent easements for nominal consideration; and

WHEREAS, the proliferation of duplicative and redundant pipeline networks, installed with regard only for the shortest and most cost-effective route, causes the unnecessary fragmentation of land and the creation of unusable slivers, chipping away at the long term economic potential of the land; and

WHEREAS, municipalities, rendered virtually ineffective by the preemption language of §121.202 of the Texas Utilities Code, are unable to respond to the plight of their constituent citizens and business owners and are without the necessary authority to safeguard the long-term economic viability of the region.

NOW THEREFORE, BE IT RESOLVED BY THE TOWN OF DISH, TEXAS THAT:

SECTION 1.

 The Board of Commissioners of the Town of DISH, Texas, respectfully requests and urges the Legislature to revisit the prudence and continued appropriateness of preempting municipalities from regulating the practices of midstream gas utilities and respectfully requests that the Legislature confer additional regulatory authority upon municipalities over the activities described herein in order to safeguard the interests of the public and the long term economic viability of private property.

SECTION 2.

This Resolution shall be effective from its date of adoption.