DENVER (AP) — The Colorado Supreme Court has ruled that a Wyoming pipeline company has no right to condemn property in Colorado for a high-pressure petroleum pipeline to a Commerce City refinery that homeowners complained would be too dangerous.
The Colorado Oil and Gas Association said the ruling "puts into question current and future pipeline plans. It inserts tremendous uncertainty and will greatly affect future investment into the state."
In a ruling handed down Monday, the court said the Colorado Legislature did not intend to include oil and gasoline pipelines in laws that allowed railroads and utilities to take the property they needed for their services.
The ruling does not affect natural gas pipelines, which are regulated by the federal government.
Bennett Cohen, an attorney for landowners north of Johnstown, said the Sinclair Pipeline Co. already has a 6-inch pipeline that runs under housing subdivisions and ranchland that was built in 1962. He said that pipeline is aging, which could be dangerous. The company built another 10-inch pipeline beside it that the company has not been able to use while the case was in the courts, and the landowners now want it dismantled for safety reasons.
"If it leaks, this high-pressure gasoline pipeline could pool on the surface and ignite," Cohen said. There also is a danger of pollution, he said.
Ken Wonstolen, an attorney for the Colorado Oil and Gas Association, an independent trade group, said all energy pipelines have risks, but those risks need to be balanced with the alternatives.
"It's a lot less dangerous than replacing the pipeline with a convoy of tanker trucks," he said Monday.
In its ruling, the court said landowners could negotiate easements with oil and gas companies, but they could not be forced to turn over their property.
In a strongly worded dissent, Justice Gregory J. Hobbs Jr. said Colorado lawmakers wrote their pipeline guidelines in the early 1900s to regulate petroleum companies in an attempt to give independent oil producers a chance to compete against monopolies. He said the debate occurred during a Colorado oil boom.
He said the only alternatives at the time were boats and wagons.
Hobbs said big oil monopolies became a major issue in the 1888 presidential campaign, with all four major party candidates condemning industrial monopolies. He said the debate quickly spread to Colorado after regulation was left to the states.
"It is unimaginable that an act of 1907 (in Colorado) adding pipe line companies to a list of entities empowered with eminent domain could possibly be construed to exclude oil pipeline companies at the zenith of their regulation nationwide," Hobbs said.
A spokesman for Sinclair Pipeline did not return phone calls seeking comment. The landowners referred questions to their attorneys.
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AP | By STEVEN K. PAULSON Posted: 05/21/2012 2:56 pm