A Clash Over Gas

On the local level, pipeline opponents have taken the high ground. "How do you spin an explosion?" consultant Heckler asks rhetorically. "I think that what happened in Houston is worth a thousand words. Just on a PR level they have done a miserable job," Heckler says.

Seen through Longhorn's lenses, however, "There are two economic interests vying for a market," says Longhorn lobbyist Kelly. "What you've got basically is a political fight that might just be solved in the courts. Navajo is trying to get an edge and keep their market." Navajo is also paying legal fees for Kimble County ranchers in West Texas who believe the gasoline pipeline could jeopardize their water supply.

Longhorn maintains that the explosion in Houston was in no way a reflection of the pipeline's safety. Navajo's PR people, Longhorn charges, are using the incident merely as a scare tactic to influence South Austin residents and the courts. Said Longhorn PR consultant Martin:

"There's no difference between [the explosion] and what would happen if a construction crane on a building collapsed. That is like comparing apples and oranges. It was not an operating issue and it is not an indication of the safety of the pipeline," Martin asserted. "It was truly a freak accident."

"What it did show," intoned Longhorn CEO Montgomery, "was that our response would be timely and effective."

As if the PR war being waged by Longhorn detractors isn't enough of a headache, the legal aspects of the case are causing an equal amount of hand-wringing. "The expense for us in fighting this lawsuit is costing us in the millions, and it's costing consumers in El Paso $1 million a month in lost savings," said Montgomery. "The reason that we are doing this is that we have to react. We didn't start this. Navajo is the one that started this. Everything that we are doing has been in reaction" to Navajo, Montgomery said.

The "lost savings" may be a moot point now, however, as El Paso motorists are no longer paying 10 to 15 cents higher per gallon than the rest of the state -- a fact attributed to the border city's remote location on the map. All the same, Heckler believes that if Longhorn had performed an environmental impact study in the first place, the lawsuit would not have been necessary. "They could have built a fucking brand-new pipeline with what they have spent on public relations," said Heckler. "Rusty Kelly does not come cheap. Don Martin and the six other PR firms they have don't come cheap either. I think that the explosion made everything they say insincere," Heckler continued. "Their tactic now is to say, 'Look at the money this company [Navajo] is spending.' They [the residents of South Austin] couldn't care less if Idi Amin is financing it. Residents want to know is it by my elementary school? Is it gonna be near my backyard? That's gonna be the bottom line."

While Longhorn feels strongly that Navajo is out to destroy its plans to break into the West Texas market, Navajo says it merely wants a level playing field, and that Longhorn should comply with the same rules. If there is any economic interest, Navajo claims it is merely to protect the jobs of their employees against Longhorn's unfair competitive practices, not fear of competition. "The parties in this lawsuit simply want them to comply with the law; that's all this action seeks," said Christopher Cella, general counsel for Navajo's Dallas-based parent company, HollyCorp. "We have a refinery in Artesia [New Mexico] that employs 600 people. We want to protect their jobs."

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Friendly Competition?

Navajo has seen increasing competition in its markets over the last few years. Both Diamond Shamrock and Phillips Petroleum have built new pipelines supplying gasoline and other products to the El Paso area. Diamond Shamrock entered the El Paso market in 1995, when it constructed a pipeline from McKee Refinery in Dumas, Texas, to ship 45,000 barrels per day to El Paso. Cella cites those cases as proof that Navajo is not suing Longhorn because of its competitive threat. Navajo has not waged legal warfare against Diamond Shamrock and Phillips because they complied with federal rules, Cella says.

Longhorn, on the other hand, accuses Navajo of distorting the pipeline's record. "One area of misinformation used was the history of leaks on the pipeline. They used the history of all Exxon's [pipelines] in the state, not just this particular pipeline," Don Martin said. "This pipeline has gone 50 years without contaminating the water supply or endangering residents."

Not surprisingly, there's disagreement on that front from the other side. "That's not true," declared Renea Hicks, of George Donaldson and Ford. "There is no misinformation on this side. What we have used [to present the facts] is taken from two reliable sources."

Those two sources are the records kept by the Texas Railroad Commission (of which lobbyist Guerrero is a former commissioner) and the Fluor Daniels Report, a safety report commissioned by Longhorn. According to the TRC, there were at least 508 leaks on the pipeline, ranging from a few gallons up to 25,000 barrels spilled in Kimble County in 1979. But the TRC report is flawed, says Longhorn, because it includes all counties that the Longhorn pipeline crosses and all pipelines in those counties that were owned by Exxon.

That's why Longhorn believes those reports should not be used as a reflection of the pipeline's safety. "Structural integrity is the real issue," said Longhorn's Montgomery. "We have tested up and down all 450 miles of the pipeline [and] we are going to spend up to $1 million upgrading the pipeline," he said.

The problem for Longhorn is that many of the past ruptures have resulted from other parties' building and bulldozing over the pipeline. No amount of safety precautions taken by Longhorn can entirely stop negligence or other human error.

Currently, the lawsuit is in limbo as both parties await the decision of U.S. District Judge Sam Sparks (who refused to comment on the case for this article). After the Houston accident, Sparks in November cited Longhorn with contempt of court for disobeying orders prohibiting the use of refined petroleum in the pipeline. Longhorn insists that it did nothing wrong, that it will continue to fight for its project and tip the balance of public opinion back to its side. "The main thing," says lobbyist Kelly, "is trying to make sure the residents are not surprised by anything that happens on the pipeline."