Kinder Morgan Pipeline Faces ‘Pause’ Over Contaminated Aquifer

(Bloomberg) -- Kinder Morgan Inc. is facing regulatory and legal fallout from a construction accident that contaminated drinking water near the company’s $2 billion Permian Highway Pipeline project in Texas.

Officials in Hays County, just southwest of Austin, yanked permits last week that allowed the natural gas pipeline to cross under three county roads. The county action followed a state violation notice issued to Kinder Morgan in the wake of a March 28 boring accident that flooded 36,000 gallons of chemical-laden slurry into an aquifer that’s the sole source of drinking water for 20,000 people.

In addition, lawyers representing landowners and local conservation groups notified the company they will sue under federal pollution laws as early as June 8 to force Kinder Morgan to clean up the aquifer and re-route the pipeline to protect residents’ water supply.

Kinder Morgan Vice President Allen Fore said in a phone interview Monday that early tests indicated some of the contamination was already beginning to clear. He called the orders a “pause” and said the company is already discussing mitigation strategies with state regulators.

“We’re spending the time we need to get things right before we start up again,” Fore said.

After the accident, Kinder Morgan immediately stopped work at the site, the half-mile-long Blanco River crossing, and began providing fresh water and well testing for area residents. State regulators say work can’t resume until the company explains how it will clean up contaminated wells, plumbing fixtures and the aquifer itself. Hays County officials say they’re unlikely to restore the yanked permits until state regulators sign off on Kinder Morgan’s as-yet uncompleted mitigation plan.

The planned lawsuit over the contaminated aquifier will be the third to challenge Kinder Morgan’s construction of a pipeline through the ecologically sensitive Texas Hill Country. Neither of the other two court actions has halted construction so far, despite claims that it will harm endangered songbirds, groundwater supplies and landowners’ property values.

Jeff Mundy, a lawyer for landowners and conservation groups, said in an April 8 letter about the Blanco River accident that the chemicals contaminating the aquifer contain “human carcinogens,” including bentonite, a primary component of the drilling gel.

Fore said crews assigned to the river crossing and Hays County road crossings have been shifted to other sections of the 430-mile (692-kilometer) pipeline from West Texas to the Gulf Coast. “There’s not a delay in the schedule,” he said.

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