Dahr Jamail | As Fossil Fuel Industry Staggers, a Massive Gas Pipeline Project Endures in Texas

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Planet or Profit

The oil and gas industry is in a state of free fall. With prices for both commodities lower then they have been in years, oil companies are cutting jobs and many major drilling projects across the United States have ground to a virtual standstill.

Unlike the US, countries around the globe whose political apparatuses are not heavily funded by the fossil fuel industry are actively moving away from fossil fuels. With the mounting and unarguable impacts of anthropogenic climate disruption escalating daily, the oil and gas industry now resembles embattled dinosaurs desperately groping for their survival.

Meanwhile, vocal protest against oil and gas companies is only growing.

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Recently, a coalition of 165 organizations – including environmental, faith and political groups and businesses – signed a massive petition calling on the Government Accountability Office to launch a full-scale investigation of the Federal Energy Regulatory Commission (FERC), the agency that, while it has never declined a permit request by a company to build a gas pipeline, theoretically regulates them.

Even in oil and gas friendly Texas, there is a growing outcry about the egregious abuse of landowners rights’ carried out by the company behind a new gas pipeline.

That pipeline, the Trans-Pecos high-pressure gas pipeline project that will transport natural gas from Far West Texas into Mexico, is moving forward nonetheless.

The proposed 143-mile Trans-Pecos pipeline would deliver up to 1.4 billion cubic feet of Permian Basin natural gas into Mexico each day. The pipeline consortium is led by the richest man in Mexico, Carlos Slim, and Energy Transfer Partners (ETP), headed by CEO Kelcy Warren, who Forbes says is worth $6.7 billion, and is being built for the Mexican Federal Electricity Commission.

ETP, however, is on rocky terrain financially: It recently experienced its largest one-day drop in stock price since 2006 when its value lost 15 percent and reached a seven-year low.

“The [industry] downturn has led investors to worry that pipeline stocks can’t raise dividends, finance growth, and pay their debt after values collapsed and spending outpaced revenue,” The Dallas Morning News reports.

How can the CEO of a company that recently lost 15 percent of its total value in a single day – and dropped to its lowest value in a decade – think this new pipeline will turn a major profit given that the gas industry is experiencing such a dramatic downturn in the United States?

The answer lies in Japan, where wholesale gas prices are roughly 10 times higher than they are in the United States. The gas in the pipeline is not intended for Mexico, as both ETP and Carlos Slim would like the public to believe. It is in fact intended to be shipped overseas, which of course also means that their use of eminent domain (the right of a government or its agent to expropriate private property for public use) to seize land in Texas has been and continues to be illegal.

The principle financial backers of the project include the Bank of Tokyo-Mitsubishi and the Sumitomo Mitsui Banking Corporation in Japan, according to reports from within the oil and gas industry itself.

With Japan continuing to reel from the ongoing effects of the Fukushima disaster, that country is moving to shut down all of its nuclear power and is currently replacing that energy with natural gas, thus driving gas prices dramatically in both Japan and other parts of Asia.

Hence, while the domestic market for natural gas is in a state of collapse, ETP’s CEO Kelcy Warren sees huge potential profits for his company abroad.

This is likely why in December 2015, Warren said, “You really make money during the dark times when other people are struggling.”

Sacred Landscapes and Reluctant Warriors

Most people who are paying attention to the ecological and economic situation on the planet would not argue with Warren that these are indeed “dark times,” and most people, as well as ecosystems, are “struggling.”

But there are many people in Far West Texas, one of the only relatively pristine places left in the pipeline-smothered Lone Star State, who have devoted their lives to fighting against the construction of a pipeline through what is left of the wildest part of the state.

David Keller is a longtime historian and archeologist who lives in Alpine, Texas, a small town that lies directly in the path of the pipeline. Keller and several others founded the Big Bend Conservation Alliance, a group that opposes the pipeline project and is working to preserve and protect the wild spaces left in the Big Bend area of Far West Texas.

“This is a sacred landscape, and for them to degrade it with a pipeline is a personal affront,” he told Truthout. “I did not want to be involved [in a battle against the Trans-Pecos project], but the enormity of this threat pulled me into the fold, and I’ve been a reluctant warrior.”

David Keller and Jessica Lutz cofounded the Big Bend Conservation Alliance, a group that works to preserve and protect the wild spaces left in the Big Bend area of Far West Texas. (Photo: Dahr Jamail)

Like so many in the region that will be directly impacted by the massive pipeline project, Keller found his connection to the earth through the wide-open spaces of the high desert in West Texas, and with his partner Jessica Lutz, founded the Big Bend Conservation Alliance and began working with landowners whose property was under threat.

Keller met Coyne Gibson, a former engineer in the gas industry, at a public information meeting about the project. Having worked for the Houston division of Fluor Engineering as an electrical and control systems engineer, Gibson’s experience in the oil and gas industry includes a variety of petrochemical infrastructure projects, including systems associated with oil, natural gas and natural gas liquids; gas-processing facilities; refineries; and transportation and distribution systems, including pipelines and associated compressor stations.

Thus, Gibson is as informed as anyone about what can go wrong with highly pressurized gas pipelines.

Being from Texas myself, that state’s natural beauty imprinted me with long-lasting memories, which over time led me toward working to increase awareness about the importance of preserving wild, unspoiled land.

So when I met Gibson, who had worked for decades engineering oil and gas infrastructure, I had my reservations about his motives for speaking out against the Trans-Pecos pipeline project. But when we sat down for an interview for a story I was writing about it, my suspicions melted away. He began talking, sincerely and earnestly, about the facts.

For example, he pointed out that after companies have installed a pipeline underground, they then try to cover up and “restore” the construction damage – but this is not possible.

“That process is maybe, at best, marginally successful over a long time period,” Gibson told Truthout. “But out here, in this fragile ecosystem, there is little chance for restoration.”

He was frank about the likelihood of something going wrong with a pipeline such as the Trans-Pecos.

“It’s likely there will be an explosion – not if, but when,” Gibson stated flatly. “At a random place along the line, the risk, let’s say, is X. At a compressor station, the risk is 10X, or greater, because it has people working on it, rotating machinery, electrical systems and vehicular traffic; concomitant risk is there. And when something goes wrong, it tends to be catastrophic.”

Coyne Gibson has been providing public information meetings around the region for months, giving the public data it needs to know about the Trans-Pecos pipeline project and how it could impact their lives. (Photo: Dahr Jamail)

Like Keller, Gibson moved to the area because he fell in love with the land, and had no intention of becoming embroiled in a battle against a pipeline project.

“I love this place – different every single day, a new vista, a new sky, a new experience,” Gibson said, sounding more like a poet than a former gas industry engineer. “I have the darkest skies at night; I can read a book from the glow of the zodiacal light at the new Moon. I can see Andromeda, with my naked eye, no telescope required. I can see a hundred shooting stars on all but the cloudiest of nights.”

The coalition of people opposing the pipeline is diverse – but for many of them, their major motivator is this same deep, emotional connection to the land.

“I can take in the scent of pinyon and ponderosa pine, the fragrance of desert creosote bush,” Gibson said. “I can hear the ‘quiet’ like nowhere else. I can be at peace. We are Brown, white, Black, Indigenous, men, women and children. We are liberal, conservative, deeply spiritual, agnostic. We all have one thing in common – this place, and the way we feel about it.”

But all of that is under threat, as construction of the pipeline has, at least in some areas of the route, already begun.

Follow the Money

Keller, Gibson and other opponents of the project emphasize ETP’s dishonesty in using the eminent domain law to forcibly take land from reluctant ranchers under the guise that a substantial portion of the gas in the pipeline would be used for domestic purposes. Ample documentation exists to show that the gas is meant to be shipped to overseas markets.

Even without taking Asia into account, the project was ordered by the Mexican government to serve the needs of Mexico. Hence, the pipeline does not serve a single domestic US customer, and yet it is already taking, by force of Texas law, private property from US citizens.

As Gibson puts it, ETP is taking this land “for use by a for-profit company owned by billionaires to provide natural gas to a foreign country ruled by a corrupt and violent government – and, as it turns out, a country that is primarily serving as a ‘pass-through’ that will allow unregulated export of US-derived LNG [liquefied natural gas] to hungry markets overseas.”

Significant evidence exists to back Gibson’s claim that the purpose of the pipeline is to ship the gas overseas. Gibson provided Truthout with a copy of a February 3 letter he sent to the FERC, which includes documentation from Pemex, Mexico’s national oil and gas company, outlining its plans for shipping natural gas overseas via its “transoceanic corridor project,” which the company aims to use in order to position “Pemex as a key player in the Pacific [natural gas] market.”

Gibson’s letter to the FERC lines it out. In the section titled, “Export of United States & Mexico Natural Gas – Transoceanic Corridor Project,” he writes:

… It is evident that Mexico, and the United States, in collaboration with private enterprises intend to export natural gas, via liquefaction, to markets in Asia/Oceania, perhaps beginning as early as 2018.

The construction of storage facilities in Mexico, the rapid, and aggressive expansion of the Pemex and CFE pipeline infrastructure, its interconnection with border-crossing pipeline facilities, tied to United States systems, all clearly demonstrate these plans.

In addition, Mexico is active, in planning and construction to convert three existing LNG re-gasification import LNG terminals into combined dual liquefaction /re-gasification operating capability, and to construct two new liquefaction-only LNG facilities.

In the document, Gibson points to things like the construction of storage facilities in Mexico, aggressive expansion of pipeline infrastructure and several other indicators of that country’s plans to export the gas.

“While some of the billions of cubic feet of natural gas planned for export from the United States will certainly be used in generating electricity in CFE’s Mexico facilities, much of that natural gas appears to be subject to temporary storage, and redirection into Pemex liquefaction LNG facilities for export to higher-priced markets in Asia/Oceania,” the document continues. “Clearly this is not in the ‘public good’ – it will adversely affect prices on the domestic US supply, causing prices to rise for US consumers. This has direct negative effects within the US; including a rise in the price of electricity, a rise in the price of foods (natural gas is a feedstock for fertilizers), a rise in the price of goods (natural gas is a feedstock, and source of industrial fuel), and a rise in the price of home heating fuel.”

“So the play here is that Japan needs access to this natural gas, and other markets in Asia will also need it, so the cheap natural gas in the US will be exported through Mexico where there is virtually no regulatory activity with LNG [liquefied natural gas],” Gibson explained to Truthout.

Hence, the land and wildlife of Far West Texas are shouldering the ecological cost – and residents are shouldering the emotional cost – of watching the area where they live become deeply scarred and polluted, and possibly destroyed.

Empty Promises

While residents have worked tirelessly to spread awareness of the pipeline’s capacity for destruction, corporate media outlets have painted a relatively rosy picture of what the project will do. Several major news outlets have reported that the small border town of Presidio, Texas, which has a very depressed economy, would benefit from the pipeline by gaining both natural gas and scores of jobs.

Critics have argued that ETP has allowed people to believe that the Trans-Pecos project would automatically provide natural gas to Presidio, which currently depends on propane (which is far more expensive) for its fuel. The people of Presidio have also been led to believe by both ETP and the corporate press that the pipeline would lead to the opening of a chili plant – and hence dozens of jobs – which the gas would be necessary to run.

But any benefits to Presidio would by no means be automatic. A pipeline “tap” would be required to run gas to Presidio via a lateral distribution line, since the town lies roughly 12 miles away from the pipeline.

“Costs on that type of construction can run from $400,000 a mile to a more normal average cost of around $1 million per mile,” Gibson said. “So given where the tap into the city is located and the construction necessary to get it to the city is roughly $10 million in cost.”

Presidio would not be able to purchase the gas directly from the Trans-Pecos project. A “franchise” like West Texas Gas would have to establish a business relationship with various gas suppliers in the area. Money requisite for these business transactions would have to come from West Texas Gas, which would have to invest as well as develop the 12 miles of pipeline needed, and then buy the gas for the city and sell it to customers. There is no guarantee that West Texas Gas is interested in going this route.

Another option would be a partnership between a company like West Texas Gas and a municipal entity in Presidio, in which the city itself could become the local gas company. In that case, West Texas Gas would need to pay for the infrastructure necessary to tie into the pipeline and purchase the gas at the hub.

Another piece to the puzzle: In order to distribute the gas on a local level, a “city gate” facility would have to be established. This facility would do things like odorize the gas, dry the gas, reduce the pressure down to what is required for a municipal distribution and then run the metering part of the distribution of the gas to those who consume it.

“So if you do all of the math needed for this kind of infrastructure, you end up with about $25 million to $30 million in cost that somebody has to pay for,” Gibson said. “Either a private entity like West Texas Gas would roll the dice and say there is enough business opportunity in Presidio to make that worthwhile, or the city would have to funnel it through municipal bonds or some other source of funding.”

Thus, given that the median household income for the town of Presidio is under $25,000, and there are roughly only 5,000 people in the entire area in and around the town, the likelihood that the Trans-Pecos pipeline would result in natural gas being brought to the town seems very low.

Another point to consider is that there are only seven restaurants in Presidio that might benefit from having natural gas, so there really isn’t a large commercial and industrial contingent, and heating homes is not going to come anywhere near industrial-use levels of the gas.

“All these factors play in to what the ‘take rate’ is and decrease the likelihood that natural gas ever really could appear in Presidio,” Gibson said. “People try to make this into a divisive socioeconomic issue, but it really is based purely on economics.”

Gibson underscored his point by saying that if Presidio could benefit from having natural gas, even before the existence of the Trans-Pecos pipeline, a gas company would have extended the already existing six-inch diameter West Texas Gas system that serves the area and run that pipe into Presidio so the town could have gas. But this has not happened because, according to Gibson, “the economic case is not there for it.”

“It’s not that people don’t want Presidio to have natural gas, because I’d be the first person to stand up and say, ‘If natural gas can help Presidio, how can I help you get it?'” he said. “But the practical reality is something different.”

Gibson believes the people of Presidio, along with city management, have been deceived, thanks to faulty reportage and ETP’s misinformation campaign.

“I’m saddened that people would deceive the residents of Presidio and the city management,” he concluded. “But it’s very unlikely that natural gas will ever be supplied to Presidio, at least as a consequence of this pipeline.”

Of course, this is not just the story of one small town in Texas. It’s just one example of how giant corporations conduct misinformation campaigns to convince residents of poor and working-class areas that an intrusive corporate presence will benefit them. The people of Presidio and towns like it are being deployed as pawns in a profit-making game of international proportions.

“Our Consciousness Is Woven Into the Landscape”

Simultaneous to the nefarious pursuit of profit at all costs, a groundswell of people acting to protect the land is gaining steam in Far West Texas.

Jessica Lutz, along with working with Big Bend Conservation Alliance and her partner Keller, is a documentary photographer and artist, and is keen to the importance of the aesthetics of the region where they live and work.

“This is a mythical landscape, and that is something to be protected, not just for Texas but for the US,” Lutz told Truthout.

Like Keller, Lutz was reluctant to get involved in the fight, but her love of the land – in particular, the area around Big Bend – left her with no choice but to enter the fray.

“The ecosystem doesn’t end at the borders of the parks,” she added. “In fact, it doesn’t end in the US either; it extends into Mexico, and this is one of the last intact bioregions left.”

Lutz spoke at length about the “majestic” quality of the landscape, and pointed out how she felt that the Trans-Pecos project is more like “a war on the citizens” for nothing more than the development of gas infrastructure on both sides of the US-Mexico border, “for an industry that might not even be here in 20 years.”

Alyce Santoro, an artist who lives in the nearby Davis Mountains with her husband, feels similarly. Along with other residents, Santoro learned of the pipeline project in the spring of 2014, and quickly began working to inform people of what was in store. The more she learned, the more alarmed she became, as she believes one role of the pipeline is to lay down the infrastructure necessary in order to bring fracking to the pristine Big Bend region.

Like Gibson, Keller and Lutz, when asked about why she is working on this defense campaign, she spoke reverently of the land.

“People here have an incredible sense of place,” Santoro said. “We experience these vistas daily, and can’t help but be moved by them. Our consciousness is woven into the landscape.”

Keller, who has a background as an environmental historian, spoke to the cumulative long-term impacts of the pipeline.

“It’s a series of lateral roads, fences, chain-link fences, blow-down facilities, valves and meters and all kinds of infrastructure and the possibility for more infrastructure; this is just the beginning and more will come,” he said. “So it’s the cumulative effect of all that impact over time that will drive biodiversity down, and we’re already facing issues from climate change and human encroachment.”

While Keller is not opposed to the oil and gas industry, he sees the pipeline project as “only benefiting the fat cats, no way around that. So we bear all the impacts, and none of the benefits.”

As an archeologist, Keller has several deep concerns about the impact the pipeline is already having.

In order to construct the project, a 125-foot-wide berth of the top two feet of the soil is scraped away, for the entire 143-mile length of the pipeline.

“Almost all our culture is contained in that two feet of ground,” Keller explained. “The pipeline obliterates both. So you are ripping pages out of the book of history and tossing them to the wind. They claim they are doing due diligence on the area, but I’ve seen their due diligence is a crock of shit.”

Keller noted that ETP has admitted to having only tested for cultural deposits down to one foot, when there are areas in the floodplain of the Rio Grande where cultural deposits like cairns, fire pits and other relics don’t even begin until one digs down at least three feet.

“This region is understudied, in its infancy in terms of archeological discovery,” he added. “Less than 1 percent has even been surveyed professionally.”

That means there are countless undiscovered human burial areas, petroglyphs, medicine wheels, sacred sites and effigies that could be destroyed along the vast length of the pipeline route, without anyone ever knowing.

“The government isn’t protecting our land, so we have to,” Lutz said. “The state is here to facilitate industry, so it’s up to us as individuals to voice our concerns and do everything we can to protect these last remaining wild places.”

Keller explained that he feels as though he and his people are “under attack, and that we are in a war.” He said he would be unable to sleep at night if he did not fight for the land. He admitted that he actually hates doing this work, including going to meetings and working with various groups.

“I just want to be out in nature, left alone, enjoying the quiet and peace and animals and just being in it, that’s what I live for,” Keller said. “That’s why I’m fighting.”

He would rather not fight, and does not particularly care for that part of himself.

“I’m a peaceful, kind person, but this stuff makes me really angry,” he explained. “I came out here [from Lubbock] to get away from that stuff. I came here [and] was not interested in becoming a member of anything. But this happened, so what are you going to do?”

Lutz said she felt similarly.

“I love this region, and I found the place I want to live,” she concluded. “I’m not a fighter, I’m not a protester, nor an activist. I’m a quiet person. But I love this region. My heart is open here. I will do everything I can to preserve this area. It’s worth fighting for. There’s no other option.”