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Oil Pipe Zoning Becomes Constitutional Issue

(CN) - The owner of the 700-mile, interstate Pony Express (oil) Pipeline claims a Nebraska county illegally stopped construction of a pump station and threatened construction workers with criminal charges.

Tallgrass Pony Express Pipeline LLC, of Overland Park, Kan., sued Kimball County, its Board of Commissioners and zoning administrator Sheila Newell in Omaha Federal Court.

Tallgrass says the replacement pump station it is building in Kimball County is necessary to generate pressure to send crude oil through the pipeline.

The pipeline starts in Guernsey, Wyo., runs southeast through Colorado and Nebraska before turning south in Kansas and into Cushing, Oklahoma, according to Tallgrass' web site.

Built in the 1950s to transport crude oil, the pipeline also carried natural gas from 1997 to 2013. Tallgrass says the line will transport natural gas again starting this year.

Kimball County claim the pump station does not qualify as a public utility under zoning regulations because it does not distribute products to county residents.

Tallgrass disagrees. It began building the replacement pump station in January.

"Under defendants' interpretation of the Kimball County zoning regulations, a local 'public utility' dispersing its products in Kimball County may permissibly construct a transmission pipe and pump station, while an interstate utility which transports and distributes its product beyond the borders of Kimball County may not," the 15-page complaint states.

"Thus, the Kimball County zoning regulations mandate differential treatment of in-state and out-of-state economic interests in a manner which benefits the former and burdens the latter."

Tallgrass claims a sheriff's officer entered the construction site on Feb. 6 and issued 36 misdemeanor citations, to every person there.

"None of the individuals receiving citations are employees of Tallgrass," the complaint states. "None of the individuals receiving citations own any interest in the Tallgrass property. None of the individuals cited received prior notices of violation as required by the express terms of the zoning ordinance."

The sheriff's deputy informed those ticketed that he had been directed by the Board of Commissioners to write citations for each person at the site every day the construction continues, the complaint states.

Tallgrass was not cited.

On Feb. 4, the board of commissioners voted to take its own legal action against Tallgrass, the Western Nebraska Observer reported.

Defendant Newell told the commissioners at the meeting the company had failed to complete required paperwork for the pump station and that she had sent it certified letters regarding the violations. She said talks failed after Tallgrass was made aware that the parcel of land needed for the project had to be at least 10 acres under state law.

Klent Schnell, chairman of the county Planning Commission, said the process for getting the permits is not difficult.

"First of all, they would have to get an amendment to the conditional uses for a pump station and then come back in and file a conditional use permit and have our hearing," Schnell said. "It's not a complicated process for them to do this, to follow the rules and regulations of the planning commission."

Schnell said the commission was not opposed to the pump station.

"The Planning Commission, through our meetings, they're not against the pump station, because according to their staff, it's going to employ three to five people out there," Schnell told the Observer. "Which is fine. Just follow the rules and regulations like everybody else has to is all we're asking."

Tallgrass says 80 percent of the pipeline is co-located in existing energy infrastructure. It will transport between 230,000 and 320,000 barrels of crude oil per day.

Tallgrass seeks declaratory judgment that the zoning regulations and the county's actions violate the Commerce Clause and the Supremacy Clause of the U.S. Constitution.

It is represented by Stephen Bruckner with Fraser Stryker in Omaha.

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