Wednesday, April 30, 2008

With the Texas Legislature's help, "Pickens essentially created a public utility, giving him the power of eminent domain."

Pickens sends landowners letters

Energy tycoon plans to build water/electricity pipeline through North Texas

April 30, 2008

By Lynn Walker
Times Record News (Wichita Falls, TX)
Copyright 2008

A select number of property owners from Childress to Jacksboro learned this week that T. Boone Pickens would like to do a little business with them.

The man who has made billions in gas, oil and hedge funds has an ambitious plan to build a combination water pipeline and electric transmission line from Roberts County in the Panhandle to the Dallas-Fort Worth area.

Landowners along the proposed route got notification that Pickens’ company is interested in buying right-of-way from them — or seizing it through the law of eminent domain.

The North Texas properties are in Hardeman, Wilbarger, Wichita, Archer and Jack counties.

The notices, on joint letterhead from Mesa Power and the Roberts County Fresh Water Supply District, invited property owners along the route to attend a series of open houses to learn more. Those open houses are scheduled in Childress, Vernon, Holliday and Jacksboro during May.

“We have made every effort to identify landowners along the route. I think we’ve got everybody,” said Jay Rosser of Mesa. “We try to communicate in as transparent a manner as possible.”

He said the dual-purpose project became possible when the last session of the Texas Legislature passed a law to allow electrical lines and water pipelines to run in the same trench.

“It scared me,” said one woman who lives on a single acre near Scotland in Archer County and received a notice.

“They talk pretty tough in the letters,” said Wichita County Commissioner Bill Presson. The proposed pipeline route runs through a portion of his precinct near Electra. Presson said it appears that by teaming with the water district, Pickens essentially created a public utility, giving him the power of eminent domain.

Joe Staley, a former Wichitan who now specializes in eminent domain in his Dallas law practice, agrees that the venture probably has the right of eminent domain. He said if the company and a property owner can’t agree on purchase terms, the property owner can dispute the ensuing seizure. Then both sides could have appraisers judge the property’s fair market value in an effort to come to terms. If that fails, the matter would go to a jury. Staley said most eminent domain disputes are settled before they go to trial

But Rosser said in “95 percent of the cases, the property owner can continue use of the land” once the pipe and transmission line is laid.

A timetable published on a Roberts County Fresh Water Supply District Web site shows land acquisition for the project is due to be completed by April 1, 2009, with pipeline construction due to be completed in spring 2012.

The timeline also shows that a transmission line for wind-generated electricity would be connected to the Oklaunion substation by late 2010 and to a Jacksboro substation by late 2011.

The Pickens project has been in the works for several years. Pickens bought a huge ranch in Roberts County, a county which has only about 800 residents. With neighboring ranchers he acquired more than 150,000 acres of water rights.

The water comes from the massive underground Ogallala Aquifer, which stretches from the Lubbock area to the Dakotas — the largest aquifer in the U.S. Wells drilled into it for decades have provided water for residents and crops.

Presson is among those uncomfortable with selling off the water.

“The aquifer is a magnificent treasure in the Panhandle. We’re sucking the crud out of it now,” he said.

Pickens has said his company will abide by provisions that protect the aquifer from depletion.

To make the electricity, Pickens plans to erect up to 2,700 wind turbines across four counties in the Panhandle and connect the power through the news transmission line into the state grid.

Pickens, 79, is an Oklahoma native who began his energy career working for Phillips Petroleum. He formed his own company, Mesa Petroleum, in the 1950s. He made headlines by acquiring Hugoton Production, which was 30 times larger than his own. His attempts to take over even larger oil companies such as Cities Service, Phillips and Unocal made him a celebrity among the big business wheeler-dealers of the ‘80s. Pickens also developed two multibillion dollar hedge funds specializing in energy investments.

In more recent years, he has concentrated on alternative energy resources such as wind, nuclear power and the use of natural gas as a motor fuel. His ability to accurately predict prices for crude oil have led to regular appearances on news channels. He is also a leading promoter of the peak oil theory, saying that worldwide production of conventional crude oil has peaked and gone into an irreversible decline.

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