Judge allows use of condemnation for oil pipelines

Phillips 66 now has the final right-of-way needed to continue operation of three oil pipelines that cross the Blackfeet Reservation, carrying Canadian crude to points south.

Easements for the pipelines, initially granted in the 1960s and 1970s, had expired.

"We have three pipelines that are in that area and the right-of-way to that expired so we had to re-negotiate access across that land so this was part of that process," said Michael Barnes, a spokesman for Phillips 66 in Houston. "It's not new pipe or additional pipe."

The company negotiated access agreements to those pipelines with about 600 landowners and the Blackfeet Tribe.

A condemnation complaint was filed in U.S. District Court in Great Falls after the company failed to reach an agreement with several owners of one parcel.

U.S. District Judge Sam Haddon issued a ruling last Monday granting easements and rights-of-way for access to that final parcel. Just compensation was determined to be $1,450.

"The case of this one parcel of land was a last resort after negotiations failed," Barnes said.

The pipelines provide access to southern Canadian crude oil, which is important to the Billings refining center, including Phillips 66 and ExxonMobil, Phillips 66 said in court documents. Alternate pipelines do not have sufficient capacity to keep the Billings refining center supplied, the company said.

In Montana, Phillips 66 owns and operates more than 1,427 miles of pipelines and associated facilities relating to the transportation of crude petroleum to distributing, refining and marketing centers and reshipping points.

Court documents say a 50-foot easement for an 8-inch pipeline; a 60-foot-wide easement for a 12-inch pipeline; and 40-foot-easement for a 12-inch loop pipeline are located on the Blackfeet Reservation.

The pipelines are burred to a depth of 2.5 feet to 4 feet on agricultural lands.

Phillips 66 argued that the cost of removing the pipeline and building around the subject property would have been $2 million.

The easements were renewed for 47 years.

Offers to the owners of the property that was the subject of the condemnation proceeding was either rejected or the owners didn't respond, Barnes said.

"The owner or owners of the parcel haven't come forward, so if they're not representing themselves or they don't hire a legal counsel or they are non-responsive; it's hard to get an answer from the parties," Barnes said.

Haddon pointed out in his ruling that federal law permits condemnation for any public purpose allowed under state laws, with money awarded as damages to the allottee. Before the property can be taken, the the person or company proposing to condemn the property must show that the public interest requires the taking.

Haddon concluded that the locations of the pipelines are reasonable, requisite and proper, and therefore necessary for public use.

Montana law eminent domain may be exercised for common carrier pipelines and that Phillips 66 is a common carrier pipeline, the judge said.