FIRM'S LAWSUIT IGNITES DEBATE IN KATY AREA:

Firm's Lawsuit Ignites Debate in Katy Area

Gas Company Seeks to Buy Out Landowners

by George Flynn

Houston Chronicle

Monday, Aug. 1, 1994

KATY -- When a new neighbor showed up three years ago, a semirural community just south of here was shaken to its foundation.

And this week, a state District Court jury will try to determine the ultimate value of that foundation.

In what looms as a precedent-setting case, the condemnation lawsuit by Western Gas Resources Inc. unfolds against the first of 152 residents and property owners who had waged a lengthy battle against the company's new natural gas storage facility beneath their land and homes.

"To our knowledge, this type of action has never been done before," said Mark Breeding, an attorney for the residents.  "That's a problem in this case; there is a lot of uncharted ground involved."

Western Gas relied on state provisions, which enable condemnation action against landowners for mineral rights beneath that property.  When two-thirds of such rights have been obtained, such proceedings are allowed to acquire the remaining one-third interests.

Taking over property by condemnation is usually a right reserved for public agencies, needing it for projects such as roadways or public buildings.  If the owner does not agree on the compensation offered by the agency, a court can be used to establish the final compensation.

That is basically the situation to be confronted by a jury Wednesday in a Fort Bend County courtroom.  Western Gas owns the 82.7 surface acres for its $90 million storage hub, but it is suing for mineral rights to complete acquisition of the 2,000-acre underground caverns to hold the natural gas.

As much as 65 feet of rock separates the subsurface battleground from a previously sedate setting of tree-shrouded country lanes.  The facility itself is on Green Busch Road, about two miles south of Katy-Fort Bend County Road and Interstate 10.

Gas-drilling rigs first showed up about 1949, when the Hillebrenner underground natural gas reservoir was discovered.  The gas was largely depleted by the late 1960's, and the rigs gradually vanished.

Subdivisions of west Houston had pushed to within a few miles of the site in 1991, when Western gas acquired the property at deflated prices from the Resolution Trust Corp.

Residents began a fierce battle against the facility plans, but it received approval in a 2-1 vote by the Texas Railroad Commission in 1992.

Condemnation is the last step in the process, and the inaugural condemnation case illustrates conflicts as deep as the underground storage system.

For nearly 30 years before Western Gas arrived, Helen Grisham owned a six-acre plot with her recently deceased husband.  It reflects the character of the community, with a riding stable, guest house and serene grounds.  Her daughter and granddaughter live with her on the property.

The Grishams and other nearby residents say their country living has been jarred by the intrusion of the storage facility.  They tell of vibration noises similar to jet takeoffs, dust, and gas burn-offs lighting the night sky.

With that is the continuing fear of a major explosion or similar accident.  They point to the 1992 blast at a gas storage facility near Brenham, which killed three people and caused millions of dollars in damages.

Western Gas cites safety measures at its facility, which is unlike the underground caverns near Brenham.  Natural gas existed safely in the Katy reservoir for millions of years, and limits on capacity and state-of-the-art safety equipment insure against problems, officials emphasized in hearings.

Complementing those safeguards are advanced sound-muffling equipment and other measures that make the facility a good neighbor, the company said.

Residents remain unconvinced, in part because of a June 19 blast that killed a 37-year-old maintenance worker at the plant.  The failure of a wellhead flange was blamed in the accident, which caused no danger to the facility or surrounding areas, investigators said.

The impact of the facility on property values will be debated and disputed during the trial.  The company says there is virtually no difference from before.  To bolster that case, it cites the booming Champions area of northwest Houston.  Under it lies the Bammel Field reservoir, where a gas storage facility has operated since 1952.

However, residents say the comparison is flawed.  Widespread development there came after the facility was operating--not before, they say.