Ed Sealover Reporter- Denver Business Journal – February 27, 2014
Oil and gas companies had eminent-domain power for the paths of their pipelines for 105 years until the Colorado Supreme Court reinterpreted a dusty, old state law in 2012 — right as the current industry boom was starting to heat up.
Industry leaders say the stripping of this power hasn’t hurt growth yet, but they are concerned it will become an obstacle shortly as more fuel suppliers become interested in the increasing amount of product coming out of the Niobrara and other Colorado basin areas.
And, as such, a bill is moving through the Legislature that would reinstate companies’ ability to push lines through public and private property when negotiations to buy or lease the land fail. Senate Bill 93, sponsored by Sen. Cheri Jahn, D-Wheat Ridge, passed the Senate with an overwhelming and bipartisan 24-10 vote Thursday. It heads next to the state House.
“Our members are extremely reluctant to exercise powers of condemnation,” said Stan Dempsey, president of the Colorado Petroleum Association. “But if Colorado oil production continues to grow, it’s going to need the pipeline infrastructure to export its products to states where they fetch a higher volume of interest.”
A 1907 law clarified eminent-domain rights for pipelines in the instances in which oil and gas companies could not reach financial agreement with landowners.
The law specifies that a court that grants them the right to build across the property must require the companies to offer “just compensation.” That remained in place until two years ago, when the court found that a comma missing from the statute did not grant the same eminent-domain rights to these companies that it did to electric light companies and other types of utility providers.