Keystone Pipeline.... Common Carrier?
 

A few months ago there was a long discussion here of the Keystone Pipeline and how it is taking land from folks in East Texas through the power of Eminent Domain. My position on this, which stems from years of pipeline operations, was that the law in Texas was clear. Pipelines that are Common Carriers have Eminent Domaine. By the way... That is still the case in Texas.

But one guy has challenged this in court by claiming that Keystone is not a Common Carrier. So far he has won in every case and now a court is asking Keystone to prove their line deserves CC status.

This is no small deal. The pipelines I was involved with would transport crude or refined products for anyone who had the money to pay the transportation charges. After all, we made money by transporting stuff, so if you had oil to transport we wanted to be your go to guys. This made us, legally, a Common Carrier just like a truck line. We were owned by a major oil company, and we shipped a lot of their oil, but they did not get moved up the list because of it. We sold to the highest bidder and made a ton of money doing so.

At least one commentator on here has some property involved in this route. Therefore an article in today's Houston Chronicle should be of interest to them.

(A link is now posted below. I commented I did not know how to do this and Elchivito provided instructions on how this is accomplished. Thanks!)

And as an aside..... A lot of folks have whined about how important this line is to the US and blah, blah, blah, and my response to this has always been that yes, there is opposition to the line, but everyone would be shocked to see who was really trying to stop this. I get into this part of the world now and then, and you don't meet a lot of Obama voters there.

And from what the latest court has found those trying to stop it might have just found a way to do so.

Pooka

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Fuel Fix » Keystone fails Texas common-carrier test, landowners say

Hey! It worked!

Thanks. I always enjoy it when I learn something.

Thanks VERY much for posting this Pooka! If they determine that they cannot take it by Immenent Domain, I woul love to into sue them to dig up the pipe and restore the land as it was. Of course they can't put back 180+ trees.

The guy that stood up to them is my hero.

You're right Pooka, I'm no Obama supporter, but I darn sure didn't want these thieves coming through my place. I could write volumes about my experience with this bunch of crooks.

When I saw this I thought I needed to get this to you as quickly as possible. If there had been no discussion of this earlier I would have never known of your interests, and I was really glad I was able to get this info to you.

Interestingly, over here if such a project removes trees, they have to plant & care for 30 trees until they are a few years old, for every tree removed.

It's a whole 'nuther country.

Jeez people, EMINENT DOMAIN....

That's the tool but does it apply to a privately owned pipeline that services a few customers?

(Lawyers get rich)

Jerry Jones had homes condemned under eminent domain so he could build Cowboy stadium. People were forced out of their homesteads. I think there was a court case in the northeast (maybe Supreme Court) that said eminent domain is no longer used only by government entities, but private parties can as well. The rationale is increased tax revenue, which would also apply to a pipeline.

As a rule, pipeline companies seeking right of ways treat surface owners right. They know the value of good blood between people and how it makes everybody lives much easier. But some people are stubborn no matter what.

Some court will have to decide the big picture cost/benefits of crossing this guys land. I bet in the end when the money gets big enough, he will cave.

Now this depends on how far back you stand. It looks like it carries a product owned by one party, but as a small aside, most pipelines operate this way because they actually buy the product from others. So the companies that sold oil to the pipeline benefit. And if you supply more oil to the system as whole, prices to consumers go down. Now as you can see that is a different issue than the definition of common carrier.

The Denbury case is different. They want to transport CO2 from Jackson Dome in Mississippi (which they own) to the Conroe field north of Houston for purposes of an EOR flood. The increased oil production will benefit them, arguably again creating more supply for the entire system. I think the physical size of the legal block is not tremendous, they could just go around that guys land.

That was the boneheaded case in Rhode Island. Still makes be think unflatteringly of the Supremes.

I am with you on that

You talking about Kelo v. City Of New London in CT?

In that case, although the land was developed by a private firm, the transfer of property from private citizens to the private firm was done by the city of New London.

To the best of my knowledge, private people/corporations have no right to eminent domain.

Kelo v. City of New London, Case citation|545 U.S. 469 (2005)[1], was a case decided by the Supreme Court of the United States involving the use of eminent domain to transfer land from one private owner to another to further economic development. The case arose from the condemnation by New London, Connecticut, of privately owned real property so that it could be used as part of a comprehensive redevelopment plan. The Court held in a 5-4 decision that the general benefits a community enjoyed from economic growth qualified such redevelopment plans as a permissible "public use" under the Takings Clause of the Fifth Amendment.

The decision was widely criticized by American politicians and the general public. Many members of the general public viewed the outcome as a gross violation of property rights and as a misinterpretation of the Fifth Amendment, the consequence of which would be to benefit large corporations at the expense of individual homeowners and local communities. Most in the legal profession construe the public's outrage as being directed not at the interpretation of legal principles involved in the case, but at the broad moral principles of the general outcome.[2]

WalMart has used eminent domain and eminent domain was used to get the last land owners of their property to build Dodger Stadium in Los Angeles.

Exactly.

My moral remains outraged.

I was surprised this came out of a conservative court.

Definition of "eminent domain": Law which allows the government to RAPE individuals legally.
This is a sore subject for me. We have had 2 older people RAPED by "eminent domain". One was a POW in WWII. The other was a veteran of WWII. The first one, they took land that had some old cars on it (yes they were junk to anyone else) because people in a new complex complained. He was in his 80s. The cars were his life. He had collected them over many years. The second had his farm taken for the town to use as a park. They gave him 1/2 of the tax value set by the county. The town later sold the land to a company that was going to build condos, at a profit. Nothing could be done because they used "eminent domain" to take it in the first place. I will remember next election.
Paul

The government knows what is best for you.

Good point. I never bother to write anything down, or to really read any contracts.

That's what the Legal Department was for.

I visited Jerry World a few months ago after not having been in that part of Arlington for years. I was stunned at how many structures had been wiped out. At one point very long ago I lived in an apartment house across the street from Vandergriff Buick so I used to deal with a lot of businesses in that area.

And the Candlelight Inn has closed down as well. Nothing last forever.

But on the subject of landowners and ROW.... When we would deal with landowners we tried to be as fair as fair could be. Putting a line across someone's property is not a one time thing; it is a long term commitment. Someday the land would sell and we wanted the new owners to hear from the seller that the pipeline company crossing their land was a good bunch of folks to work with.

We also would tell landowners to call us 24/7 if they thought there was a problem. 99% of the calls we checked out turned out to be false alarms, but false alarms are the best kind in that business.

This sounds like a inside deal to me. When you are big enough fish in a small enough pond you hear about this kind of stuff from those that were cut out of the deal.

This sort of thing was common 50 years ago.

On the flip side.... I know of a case where some homes were torn down by a city and the lots were given to a charity that provided stand alone homes to needy individuals. The old homes were wrecks, so no one was upset about that, and the folks that received the homes had to buy them but they were given a good deal on the price. This was not Habitat for Humanity, but the group used their model of homeownership since it worked.

Then a big company came to town and wanted to buy the entire city block for a new business. The deal the new homeowners had was that if they sold with-in three years they had to give up everything they had in the home, but since no one could have foreseen this turn of events the sponsor decided to let the new owners reap the benefits of location, location, location.

So the homes sold for about what everyone else got, which was 150% of appraised value.

I am only telling this story because it is so rare that a government/private partnership results in some really good results for those on the receiving end.