The following article is an interesting story of how this power was denied to oil pipeline companies.

Committee kills eminent domain oil bill at sponsor’s request  
Written by Marianne Goodland, State Capitol reporter   
Wednesday, 01 May 2013 10:53

The more they heard, the less they liked.

That’s how Democrats in the House Transportation and Energy Committee reacted to a bill that would have granted eminent domain and condemnation rights to oil pipeline companies. But the committee instead voted 12-1 last week to kill the bill, at the sponsor’s request. In the House, Senate Bill 13-191 picked up another sponsor: Rep. Jerry Sonnenberg (R-Sterling). Sonnenberg and co-sponsor Rep. Angela Williams (D-Denver) told the transportation committee that the bill was just a technical correction to a long-ago statute and would put back into law a common practice of allowing oil pipeline companies the right of eminent domain. The bill continued to pick up opposition during its three-month-long trip through the General Assembly. The first was from the plaintiffs in a 2012 Colorado Supreme Court decision that SB 191 was designed to overturn. Then it was representatives of irrigation ditch companies in northeastern Colorado that feared the oil companies would run roughshod over their ability to decide when and where ditch crossings would take place.

The major opposition in the April 25 hearing came from Colorado Counties, Inc., which represents the state’s county commissioners. According to Weld County Commissioner Barbara Kirkmeyer, who testified on their behalf, the bill would grant oil companies eminent domain rights, and “that’s what we’re afraid of.” “We’re no stranger to oil and gas,” Kirkmeyer said, with 80 percent of the state’s oil and gas in Weld County and 20,000 active wells. That activity represents a substantial part of Weld County’s tax base.

As a result, Kirkmeyer said it took some by surprise at the CCI meeting when she asked them to oppose SB 191. Approximately 40 of Colorado’s 65 counties were represented at the CCI meeting, and they voted unanimously to oppose the bill, she said. “This infringes on private property rights,” Kirkmeyer explained. And despite the Supreme Court ruling that said the pipeline companies did not have eminent domain rights, according to Kirkmeyer some companies are still threatening condemnation when they can’t get their way on pipeline easements. Kirkmeyer told the committee an oil pipeline company last June threatened a landowner and Weld County with condemnation after both refused to grant permission for a 12-inch line. The Supreme Court’s ruling had taken place a month earlier.

It’s not appropriate for oil and gas companies to have eminent domain, Kirkmeyer said, because they aren’t utilities nor are they regulated like utilities. Kirkmeyer has had first-hand experience with a company attempting to put in pipelines on her property. She said Suncor wanted to put in a 20-inch high-pressure gas line on her property, and despite being told to stay off her land, last year company representatives trespassed on her property to do a survey for that line. “That’s the arrogance, bullying and intimidation tactics they use,” she said. “It’s not the right way to treat property owners.” The committee also heard from Donna and Ivar Larson, the plaintiffs in the Supreme Court case, who said they would not benefit from the bill’s defeat. Their interests are on public safety, Donna Larson said. Pipelines are a proper way to transport hazardous materials, she said; the question is where to put them.

The Larson case involved an easement originally for a 1963 six-inch line near Johnstown. In subsequent years a housing development was built near the line, with the closest house 25 feet away. The second line, a 10-inch line that transports 3 million gallons of jet fuel per day, became the subject of the lawsuit when Sinclair sued for an additional easement. That second line was put in 36 feet from the nearest home, despite a Sinclair brochure that said they would never build a line closer than 100 feet. The six-inch line has since been removed by court order. Donna Larson told the committee that if they decide to pass SB 191, a permit should be required for pipeline sitings as a matter of public safety and could be granted either by the Public Utilities Commission, the Colorado Oil and Gas Conservation Commission or other public agency. The bill should also ensure that property owners receive just compensation for all the land affected by the pipeline, she said.

The pipeline companies brought in powerful support from former Speaker of the House Terrance Carroll, an attorney with Greenberg Traurig who represents the Colorado Petroleum Association. He called the bill a “battle of the comma,” a reference to supporters’ initial insistence that the bill was merely fixing a comma problem. Carroll provided legislators with a history lesson on the statute in question, how punctuation in statutes should be interpreted and on the federal regulations regarding pipelines. He disagreed with testimony that said there was no regulation regarding federal pipelines, citing two federal agencies that he said are tasked with public safety for pipelines. Carroll asked the committee to not let a few “bad negotiators” impact what should be a narrow fix to the problem.

Rep. Randy Fischer (D-Fort Collins) asked Carroll about whether federal regulations require a safe distance between pipelines and homes. Carroll called the current regulations, updated in 2011, an “apples and oranges” comparison to what happened in the Larson case. He added that he did not believe pipelines would be built that close under the new regulations. He did not, however, say how many feet the regulations specify. But questions from the committee’s Democrats began to show that they were uncomfortable with what they were hearing. “A discussion of punctuation doesn’t help with this bill,” Fischer said. “We’re creating an 800-pound gorilla. This [bill] creates a major change in statute,” not just a change to a comma, he told Carroll. Fischer later suggested the issue go to an interim legislative committee. “I’m afraid we are about to make sweeping changes in statute, and [I] would be interested in pursuing a regulatory framework.”

Even committee Republicans who supported the bill questioned whether it was appropriate, including Rep. Perry Buck (R-Fort Collins) and Rep. Justin Everett (R-Grand Junction), who said he would vote for the bill and work on a fix when it reached the House floor. “There are serious issues with this bill,” said committee chair Rep. Max Tyler (D-Lakewood). “This gives eminent domain rights to the companies without any guardrails.” Tyler proposed an amendment that put the eminent domain rights into the hands of the county commissioners or other affected municipalities rather than the pipeline companies. The committee approved the amendment on a party-line 8-5 vote, and it produced an immediate response. Jep Seman, a lobbyist for the Colorado Petroleum Association, quietly spoke to Sonnenberg; moments later, Sonnenberg asked the committee to kill the bill.

Kirkmeyer said after the hearing that the oil pipeline companies would not want the local governments to have the power that the Tyler amendment granted. The Larsons told this reporter they got the outcome they hoped for and were very pleased with the bill’s defeat.

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The following is some background information on this project posted in The Mercury by Sara Mosqueda-Fernandez, posted on April 18, 2013

The proposed 120-mile-long Commonwealth Pipeline project, scheduled to run from Lycoming County to pipelines in southeastern Pennsylvania, has been suspended indefinitely. The announcement was posted on the project’s website, www.commonwealthpipeline.com   .

According to earlier presentations, the pipeline was expected to travel through North Coventry, South Coventry, Warwick and West Vincent townships. The 30-inch pipeline would also cross at least four “exceptional value” streams throughout the northern part of Chester County, including French Creek and Rock Run Creek, on the way to a compression station in Upper Uwchlan. Other affected areas would include the Hopewell Big Woods, French Creek State Park, Warwick County Park, Ryerss’ Farm for Aged Equines and Ludwig’s Corner.

Part of the pipeline would also be interred next to the Weatherstone development, which hosts 270 homes, a library and an elementary school.

While representatives for the project had reached out to municipalities to discuss the proposed project, the next step, pre-filing with the Federal Energy Regulatory Commission, was not taken prior to the project’s suspension.

The pipeline was supported by three major partners: Inergy Midstream LP, which develops and operates natural gas and natural gas liquids storage and transportation; UGI Energy Services Inc., which owns 14.7 billion cubic feet of underground natural gas storage in north central Pennsylvania and is developing projects throughout the Marcellus Shale area; and WGL Holdings Inc., a natural gas utility and marketing firm.

Lynda Farrell, executive director of the Pipeline Safety Coalition, a nonprofit that seeks to inform the public about pipeline issues, said she was informed by a representative of Inergy that while some basic routes for the project were explored, there are no detailed routing plans and there is currently no further route work.

A project representative, who asked to remain unnamed, said the suspension was because the market for the proposed pipeline has not been developed.

The project garnered significant attention from both residents and elected officials. Both the Chester County Board of Commissioners and State Rep. Tim Hennessey, R-26th, of North Coventry, wrote letters to the Federal Energy Regulatory Commission, asking that the potential harm to the Big Woods be given serious consideration.

“The Big Woods are an ecological marvel of significant scientific research value as it currently exists,” said the letter. “While we realize that all development comes at a cost, it seems to us that the harm to the Big Woods is simply too steep a cost to pay.”

A date for the resumption of pipeline planning has not been announced.

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Property owners should check out this pipeline route.

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High Court Sides with State Wildlife Agency in
Corps of Engineers Suit

WASHINGTON – The U.S. Supreme Court on Tuesday rejected the government’s argument against compensating the Arkansas Game and Fish Commission for damages caused by temporary flooding.

In a unanimous opinion, the high court found “no solid grounding in precedent” for setting flooding apart from other government intrusions on property.

The Supreme Court reversed a federal appeals court decision last year that overturned a ruling that would have awarded the Arkansas wildlife agency $5.7 million for hardwood timber lost over six years of summer flooding at the Dave Donaldson Black River Wildlife Management Area in northeastern Arkansas.

“No decision of this court authorizes a blanket temporary-flooding exception to our Takings Clause jurisprudence, and we decline to create such an exception in this case,” wrote Justice Ruth Bader Ginsburg.

However, the decision does not guarantee that the commission will be compensated. The justices noted that the government raised several challenges that were not considered by the appeals court. Those challenges remain open for consideration.

“Obviously we are thrilled with the Supreme Court’s decision,” AGFC Chief Legal Counsel Jim Goodhart said. “It’s been a long road to get to this point and we’ve still got a ways to go, but the 8-0 decision sends a strong message about what our agency has been litigating with the U.S. Army Corps of Engineers over the past seven years.”

Property rights advocates hailed the decision.

The Pacific Legal Foundation, which advocates for private property rights, said the Supreme Court had closed a “dangerous loophole in takings law.”

“Simply put, the Takings Clause does not come with a stopwatch. If government commits a taking, including flooding or occupying someone’s land, there is an obligation to pay, period. That obligation doesn’t depend on how long the government uses the property,” the organization wrote on its website.

The National Federation of Independent Business issued a statement supporting the Supreme Court ruling.

“This decision is a victory for small-business owners – farmers and ranchers especially – whose property is essential to their livelihood and the success of their business,” said Karen Harned, executive director of the NFIB Small Business Legal Center. “Temporary government invasions can be costly if left uncompensated.”

During oral arguments in October, Deputy Solicitor General Edwin Kneedler, arguing for the government, said the Army Corps of Engineers should not have to compensate downstream landowners whose property is temporarily flooded.

“It is in the nature of living along a river. Riparian ownership carries with it certain risks and uncertainties, from weather, from intervening causes,” Kneedler said.

Goodhart, the Game and Fish Commission lawyer, argued that flooding should not be treated any differently than any other type of government “taking,” and that in this case there was “substantial intrusion” that demands compensation.

“Apply the rule of law here for physical taking and look at it as the Court of Federal Claims did: Was there a direct physical injury? Did it result in substantial intrusion on the commission’s property? If so … there should be just compensation,” Goodhart said.

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As part of a pending civil lawsuit, a Pittsburgh senior federal judge determined that Svonavec Inc. did not establish that it possessed any right to mine the coal under the Flight 93 National Memorial at the time the United States acquired the company’s land by eminent domain, other than eight acres not in dispute.

On Sept. 2, 2009, the federal government acquired Svonavec Inc.’s 275.81 acres in Stonycreek Township by eminent domain for use as the Flight 93 National Memorial. The acquisition was subject to existing easements and certain rights of third parties that included coal mining rights.

Immediately after the Sept. 11, 2001, crash of Flight 93, on which crew and passengers gave up their lives to fight a terrorist takeover of the aircraft, Svonavec Inc. set up a temporary memorial on its property at the crash site. Within weeks the public was using the temporary memorial to honor the heroes of Flight 93. The coal company did not use its land for any other purpose from that date until the United States took ownership of the property on Sept. 2, 2009.

The federal government has the authority to take private property for public use as long as it satisfies its constitutional obligation to provide “just compensation.” In general just compensation means the fair market value of the property on the date it is taken, according to federal case law.

By law, the government must explore all aspects of the value of a property it takes ownership of through eminent domain to determine the amount it needs to pay for the property. Mineral rights are one aspect. “This is a very complex case. The case is still active. The judge’s decision (on the coal mining rights) is just one small issue that is involved in the case,” said Somerset attorney Patrick Svonavec, who represents Svonavec Inc. of Somerset. The federal government did not dispute that Svonavec Inc. owned the 275.81 acres of surface land on Sept. 11, 2001, but it argued that the company did not own the coal underneath. If the court had determined that Svonavec Inc. owned the right to mine coal, the property more than likely would have a higher value. Senior U.S. District Judge Donetta Ambrose agreed with the federal government’s argument.

In the civil action, Svonavec, the defendant, was required to present documentation on the chain of possession of mining rights under the tract. “Defendant relies primarily on missing, unrecorded and incomplete documents to support its chain of title for the alleged coal leases,” Ambrose wrote. “The existence, terms and/or validity of these documents are unknown and unknowable to the court.”

The government believes $611,000 is just compensation for the property. A company official has said he believes that amount is too low. “I anticipate the court will tell us soon a timeline, and hopefully we get it to trial and get a resolution,” Svonavec said. U.S. Attorney Albert Schollaert, who is listed as the attorney on behalf of the federal government, did not respond to a telephone request for comment.

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