Exxon CEO joins lawsuit citing fracking concerns

Rex Tillerson and his wealthy Texas neighbors are fighting the construction of a tower that would provide water for drilling.

By MSN Money Partner Feb 24, 2014 3:16PM
Credit: © Rex Tillerson, CEO of Exxon Mobil Corporation

Caption: F. Carter Smith/Bloomberg via Getty ImagesBy Daniel Gilbert, The Wall Street Journal

One evening last November, a tall, white-haired man turned up at a Town Council meeting to protest the construction of a water tower near his home in Bartonville, Texas, a wealthy community outside Dallas.

The man was Rex Tillerson (pictured), the chairman and chief executive of Exxon Mobil (XOM).

He and his neighbors had filed suit to block the tower, saying it is illegal and would create "a noise nuisance and traffic hazards," in part because it would provide water for use in hydraulic fracturing. Fracking, which requires heavy trucks to haul and pump massive amounts of water, unlocks oil and gas from dense rock and has helped touch off a surge in U.S. energy output.

It also is a core part of Exxon's business.

While the lawsuit Tillerson joined cites the side effects of fracking, a lawyer representing the Exxon CEO said he hadn't complained about such disturbances. "I have other clients who were concerned about the potential for noise and traffic problems, but he's never expressed that to me or anyone else," said Michael Whitten, who runs a small law practice in Denton, Texas. Whitten said Tillerson's primary concern is that his property value would be harmed.

An Exxon spokesman said Tillerson declined to comment. The company "has no involvement in the legal matter" and its directors weren't told of Tillerson's participation, the spokesman said.

The dispute over the 160-foot water tower goes beyond possible nuisances related to fracking. Among the issues raised: whether a water utility has to obey local zoning ordinances and what are the rights of residents who relied on such laws in making multi-million-dollar property investments. The latter point was the focus of Tillerson's comments at the November council meeting.

The tower would be almost 15 stories tall, adjacent to the 83-acre horse ranch Tillerson and his wife own and a short distance from their 18-acre homestead. Tillerson sat for a three-hour deposition in the lawsuit last May, attended an all-day mediation session in September and has spoken out against the tower during at least two Town Council meetings, according to public records and people involved with the case.

The Exxon chief isn't the most vocal or well-known opponent of the tower. He and his wife are suing under the name of their horse ranch, Bar RR Ranches LLC, along with three other couples. The lead plaintiffs are former U.S. House Majority Leader Dick Armey and his wife, who have become fixtures at Town Council meetings.

Whitten, who also represents the Armeys, said they declined to comment.

The water tower is being built by Cross Timbers Water Supply Corp., a nonprofit utility that has supplied water to the region for half a century. Cross Timbers says that it is required by state law to build enough capacity to serve growing demand.

"We're a high water-usage area," said utility president Patrick McDonald. "People have large lots, lawns, horses, cattle, goats, swimming pools, gardens," he said. Cross Timbers, formerly known as Bartonville Water Supply, said it would sell leftover supplies to energy companies during months when overall demand is low.

Bartonville's population has increased almost 50 percent since 2000, to about 1,600, according to U.S. figures.

Tillerson, 61 years old, moved to Bartonville in 2001 and became CEO in 2006. Since 2007, companies have fracked at least nine shale wells within a mile of the Tillerson home, according to Texas regulatory and real-estate records.

The last to do so was XTO Energy Inc., in August 2009, according to Texas regulators. Tillerson had just begun talks for Exxon to acquire XTO. Four months later, Exxon swallowed its smaller rival for $25 billion, becoming America's biggest gas producer.

XTO drills and fracks hundreds of shale wells a year, and the Exxon unit has said it recycles water and ships it on pipelines where feasible, in part to reduce truck traffic.

In 2011, Bartonville denied Cross Timbers a permit to build the water tower, saying the location was reserved for residences. The water company sued, arguing that it is exempt from municipal zoning because of its status as a public utility.

In May 2012, a state district court judge agreed with Cross Timbers and compelled the town to issue a permit. The utility resumed construction as the town appealed the decision.

Later that year, the Armeys, the Tillersons and their co-plaintiffs sued Cross Timbers, saying that the company had promised them it wouldn't build a tower near their properties. They also filed a brief in support of the town's appeal.

Last March, an appellate judge reversed the district judge's decision saying he had overstepped his jurisdiction and sent the case back to the lower court, where it is pending.

Meanwhile, the utility has reached out to Bartonville voters, who in November elected two members to the council who criticized the town's fight against the tower.

"The council is currently evaluating all options," said Bill Scherer, Bartonville's mayor pro tem.

In the wake of the election, Tillerson was among those who lined up in a windowless hall to address the council. He told officials that he and his wife settled in Bartonville to enjoy a rural lifestyle and invested millions in their property after satisfying themselves that nothing would be built above their tree line, according to the council's audio recording of the meeting.

Allowing the tower in defiance of town ordinances could open the door to runaway development and might prompt him to leave town, Tillerson told the council. "I cannot stay in a place," he said, "where I do not know who to count on and who not to count on."

More from The Wall Street Journal


Tags: XOM
Classic case of not i my back yard

I noticed he does not live down in the Houston area where all the refineries are causing triple the cancer rates and asthma in 80 percent of the children at one time or another.

 Yep he is willing to make $250,000,000 a year off polluting other people's backyards but not his own.

Me and girlfriend were cleaning off my car the other day she had borrowed one of my long sleeve shirts and got this black stuff from my car onto the shirt and it is so bad it never wasted out.

And I reminded our that we breathe that crap into our lungs all the time and the EPA doesn't care about it in fact they relaxed the rules to stop it about 15 years ago.

I wish the keystone pipeline will never be built as they are running out of oil in the Gulf of Mexico and I wish they would open off shore drilling off the the late JFK' s mansion in Connecticut

Feb 24, 2014 4:14PM
Feb 24, 2014 7:09PM
Awww, c'mon, Rex! If J.R. wouldn't have minded drilling rigs ON South Fork, surely you can deal with a single water tower NEAR your ranch. ;)
Feb 24, 2014 3:30PM
Feb 24, 2014 6:08PM
Just another case of "not in my backyard but in  yours is fine".  Reminds me of the sloar friendly  Kennedys and wind mills.
Feb 24, 2014 11:14PM
Ha- ha ! Not in my back yard- in your back yard !
Feb 25, 2014 7:10AM

That is the American way.

The rich and influential gets to decide for the rest. Yea you can build anything you want any where. BUT NOT IN MY NEIGHBORHOOD,

This filthy stinking rich price gouger is probably getting tax dollars for not producing anything on the agricultural land he owns.

Feb 25, 2014 12:31PM
Damn hypocrite.  Why doesn't he and his neighbors pay for a canal to carry the water to a less noisy location. What a jerk.
Feb 25, 2014 8:48AM
Sounds like he just wants a piece of the action, or doesn't want the competition profiting from his land.
Feb 24, 2014 5:34PM
well it seems to me it's alright to put it in my yard but not Mr. Tillerson yard  These rich folks pay the crooked politicans to get what thy want while robbing you and me does anyone think Mr. tillerson is worth his ceo pay check or any other ceo for that matter . the only way the companys can pay those kind of salarys is to over charge the public.
Feb 24, 2014 5:18PM
So the environmentalist are going to go to bed with Exxon. How cute. And of course there is nothing in this for Exxon. Sure....
Feb 25, 2014 4:18AM
Rex T. the T Rex gets bit! Bring on the warm-blooded mammals!
Feb 24, 2014 5:40PM

I hope the usual Capitalists, who opine on this board, ....the people who hate Obama, Socialism, etc,.. will now please call this CEO, a Socialist, a liberal, welfare recipient ,etc.

Feb 24, 2014 7:54PM
It is safe if it is not near me. I think a lot of oil CEO's
would take the same position.
Feb 24, 2014 3:31PM
Seems like Exxon is trying to use the law to hurt their competition. If we ever hope to sustain long term energy independence we need to use all methods available (oil, natural gas, solar, wind, nuclear, and all others). If we were to invest in renewable energy we could save some of our oil for when prices double, triple, or higher in the future
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