Kyle approves $2.7 million settlement with Kinder Morgan

The City of Kyle has approved a settlement agreement with the Permian Highway Pipeline, LLC and Kinder Morgan Texas Pipeline, LLC.

The Kyle City Council approved the $2.7 million settlement during a special meeting on Friday. The settlement allows Kinder Morgan to build the Permian Highway Pipeline through the City of Kyle and provides protections to the city regarding how the pipeline impacts existing infrastructure and future developments.

“To be clear, this settlement has nothing to do with rerouting the pipeline out of the Hill Country,” City of Kyle Mayor Travis Mitchell said in a statement. “We still share in the concerns of thousands in our community who fear the impacts of the PHP on our safety and our environment. Settling this case has no bearing on those risks, which would have remained in full force either way.

“In a perfect world, this pipeline would have been routed through unincorporated areas of Texas — preferably those areas already established with oil infrastructure — minimizing the effect on landowners, local governments and our environment,” Mitchell added. “Unfortunately, we don’t live in a perfect world. Our city council and city staff have worked diligently with Kinder Morgan to develop this framework that will provide protections to the city that otherwise are not granted through current state and federal regulations. One such protection born from the settlement is that Kinder Morgan is no longer legally allowed to convert the pipeline from natural gas to crude oil. As I see it, this negotiated point can be celebrated by all who have stood with us for the last year.”

Alongside the $2.7 million the City of Kyle will receive from Kinder Morgan, the settlement protects the city from incurring any undue financial burden that the pipeline may cause on existing infrastructure and requires Kinder Morgan to participate in alleviating conflicts between the pipeline and future infrastructure projects in Kyle.

“The question before our council has been how to leverage our limited city resources to carry this fight against an opponent with virtually unlimited resources,” Mitchell said. “We believe that this settlement agreement represents a better outcome than what we could have expected in a long and drawn out, and expensive, legal battle.”

The Kyle City Council previously passed an ordinance on July 2 that would have put stricter regulations on the pipeline’s construction through the city’s limits. Kinder Morgan, however, sued Kyle asserting that federal and state laws prohibit cities from regulating pipelines. The city amended the ordinance to address the claims that the ordinance was inconsistent with state and federal law on Sept. 11.

“While we’re satisfied to have this particular legal proceeding behind us, we remain committed to advocate for Kinder Morgan to build in the most responsible manner possible,” Mitchell said. “This is certainly a step in the right direction, but it is also not the end of this fight”