The Price of War

Don Martin, a Longhorn Partners Pipeline public affairs consultant, believes that the real conflict surrounding the operation of the Longhorn pipeline stems from a turf war between two oil companies. Now, with the EPA's environmental assessment calling for $10-20 million in pipeline improvements, as opposed to the $100-million-plus cost of rerouting the pipeline around the city of Austin, Martin claims his side has won.

"The only real loser appears to be Navajo Refining Company of Artesia, New Mexico, who has been spending hundreds of thousands of dollars in Austin to try and stop this line, not necessarily for the safety reasons, but for their own profit margins," Martin says. He adds that Navajo footed the bill for the two Hill Country ranchers who originally filed suit against Longhorn, and that Navajo has indemnified them, which means the ranchers are freed from a countersuit.

David Blair, vice president of marketing for Navajo, predictably sees things from a different point of few, saying that if Navajo hadn't started the litigation, it's doubtful there would have been an environmental assessment of the pipeline in the first place. "We're small players in the El Paso market, with less than 15% of the market," Blair says. "We just want a level playing field. They should go by the same rules and regulations as everyone else. We're glad the government did the environmental assessment; at the very least, [Longhorn Partners] now has to do the 34 mitigation measures."

To be sure, big money has been spent on both sides of the issue. Litigation doesn't come cheap. Longhorn Partners Pipeline Co. -- whose partners include BP Amoco, Exxon Pipelines, Williams Pipelines, Beacon Energy Fund, and Chisholm -- spent $120,000 for lobbying efforts in Washington during 1998 alone, according to the Center for Responsive Politics' Web site, on top of the $1.5 million dollar price tag for the Radian study. Longhorn president Carter Montgomery says it's impossible to guess how much his company has spent so far trying to get the pipeline through, but estimates between $2-10 million; since Longhorn has employed a team of lawyers, lobbyists, and PR firms, the higher number might be the better guess. Players on the Longhorn side have included Martin and PR specialist Peggy Hubble; lobbyists Rusty Kelly and former Austin state representative Lena Guerrero; the Jenkins & Gilchrist law firm and the Harrell Group public relations firm, both from Dallas; Washington-based The Dutko Group; and former Lt. Gov. Ben Barnes.

On the opposition side, Navajo has retained the Washington law firm of Patton Boggs, as well as the Dallas-based PR Firm of HillCo Partners, who represented the city of Austin in lobbying efforts earlier this year before the state Legislature. HillCo, in turn, employs the grassroots organization called the PIPE coalition (Protecting Individuals, Protecting Environment), headed by political consultant Jeff Heckler.

Heckler, a former SOS Alliance board member, says he has no problem accepting money trickling down from Navajo Refining via HillCo Partners. "I don't care if [HillCo] is getting their money from Moammar Gadhafi, and neither do the people in the neighborhoods next to the pipeline. I play for keeps, period. If Navajo's pumping money into this, God bless them."

Mike Blizzard, another PR consultant for the pipeline opposition, says PIPE is paying his bills as well. The plaintiffs who originally sued Longhorn Partners last year to force the environmental assessment include the two Kimball County ranchers, the Lower Colorado River Authority, the Barton Springs/Edwards Aquifer Conservation District, and the city of Austin. They are represented by Austin attorney Renea Hicks and local law firm George & Donaldson (which also counsels The Austin Chronicle on libel issues). These firms have hired consultants Lauren Ross, an environmental engineer, and Don Deaver, a former Exxon engineer and pipeline expert.

The money trail has often led to the courts. Longhorn sued Navajo and George & Donaldson for $1 billion earlier this year. Hicks, who now practices privately in the same building, was a member of the law firm at the time of the suit.

"I called it the sore losers tort," Hicks says. "They sued us after we won the injunction for the environmental assessment." Eventually, Longhorn dropped George & Donaldson from the suit, but it's still pending against Navajo Refining and parent company Holly Oil of Dallas.

Meanwhile, in January Navajo got hit hard by the courts in an unrelated case, when it was forced to pay $450,000 in penalties and plant improvements for violations of the Clean Air Act, lending credence to Longhorn's claim that Navajo is acting from something other than environmental concerns.

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