Weld County farmers seek more protection as oil and gas companies use eminent domain for pipeline projects
September 5, 2016
After the Board of Weld County Commissioners approved new regulations on oil and gas pipelines, farmers said they didn’t go far enough. Although leaders decided against postponing the adoption to add further protections for landowners, they said they did want to form an advisory committee on the issue.
It's hard to hear George Maxey talk as he zooms through his alfalfa and corn fields in a little vehicle that looks like a golf cart.
He's not too quiet, and it's not the little motor drowning him out. It's the four backhoes, collection of sump pumps and diesel trucks that men in bright yellow vests are using to rip a long hole in the ground.
"I've farmed for 62 years now, and I've never had to experience this," he said.
The men are installing a pipeline that will run through the middle of Maxey's 160-acre property. It will be the sixth oil and gas-related pipeline to go through the farm.
“Eminent domain is what’s considered an inherent power of government.
— Tom Dougherty, eminent domain lawyer
When the Board of Weld County Commissioners introduced some updates to the county's oil and gas pipeline regulations earlier this summer, it ripped off a scab for area farmers.
They'd been quietly lamenting pipeline issues for a while, and a handful came to the meeting to explain why that is and why the regulations — as they were written at the time — wouldn't do enough.
The updates, which were finalized Aug. 15, gave landowners more protections. They made companies go through hearings for most pipeline projects, which give landowners a place to air their grievances.
But Maxey and other farmers said they need more protection, especially now that the companies are using threats of eminent domain to get the landowners to sign off the land deals quickly.
On Maxey's farm, there's a high water table during the summer months. He recommended the crews wait until it gets colder. That didn't happen.
"Now, they're paying for it," he said.
The company had to bring in sump pumps to move the water. Instead of a small linear hole, crews had to carve out a trench that's dozens of feet across. They've even had to install stabilizing structures to ensure the walls don't cave in on the workers.
"That's a terrible trench … to put in a 20-inch pipeline," Maxey said, looking at the site from the inside the cart. "It's a lot of damage to my farm."
Farmers grow crops in the nutrient-rich topsoil. Just a few feet down, the soil loses its quality, especially here in dry Weld County.
"Our subsoil is sandy," Maxey said.
Digging around like this inevitably mixes the two layers, even if crews try to preserve the topsoil. The area takes decades to mend, farmers such as Maxey say.
The pipeline company's easement covers some open grassland on the property, but it also falls over some of Maxey's crops.
"They just mowed it down," he said.
The company did pay Maxey for the land and for the crops the crews ended up destroying, but it wasn't close to the compensation the farmer would have wanted. For example, the agreement did nothing to make the company check back in on the damaged crop production in the areas where the topsoil was harmed.
His negotiating power was snuffed when the company threatened to take him to court — using eminent domain — if he didn't accept the payment that was on the table.
"Our lawyer said we couldn't get anything going to court," Maxey said. "We'd lose."
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Using eminent domain to get hold of a property is a difficult process. In short, an organization takes the property owner to court, convinces the judge that the organization needs it and figures out how much it will pay. The court forces the landowner to sell the property for the market value, which is assessed professionally.
Organizations that can use eminent domain in Colorado fall into three general categories: government, public utilities and others, said Tom Dougherty, a partner at Denver-based law firm Lewis Roca Rothgerber Christie who has spent years working with eminent domain laws.
"Eminent domain is what's considered an inherent power of government," he said.
That's rarely disputed. The government will take property for projects such as roads.
In July, the Greeley City Council got the ball rolling on an eminent domain case for some property along 65th Avenue, which officials plan to expand. The landowner ended up settling out of court.
Utility companies, such as Xcel Energy, can use eminent domain so they can install electric lines or other infrastructure.
The last group is less obvious. It can range from large corporations, such as pipeline companies, to individuals. For example, if someone builds a house with no street access, that person can use eminent domain to make a neighbor sell space for a driveway.
An individual or organization suing to use eminent domain — also known as condemning a property — has to prove doing so is necessary.
Industry supporters argue the pipelines are vital to quick, cost effective service. Opponents say the pipelines are beneficial, but not vital. Ultimately, a judge gets to decide. And in many cases, judges have sided with the oil and gas companies.
"Yes, these are for-profit companies," Dougherty said, " (But) if you think about the jobs and the dependency of the state's economies on oil and gas, and then think about how much we all rely on it … it's important that pipeline companies have this tool."
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Dennis Hoshiko has spent almost 40 years in the rift between the energy and agriculture industries.
"It just so happened that when I returned from CSU to work on the family farm was about the time the first oil boom occurred in Weld County," he said. "That was my assignment — to deal with these things."
He fought against overcrowding back when the oil and gas industry didn't have access to directional or horizontal drilling and had to use more wells.
Now, he's working on pipeline regulations.
He has a farm near George Maxey's. One of the things about these pipelines, he said, is one leads to more.
An interstate gas line went through their properties. Under the county's old regulations — the ones that existed before the Aug. 15 meetings — the commissioners couldn't hold hearings on pipes that run through multiple states. Those fell under federal jurisdiction.
Wrangling the federal government in these situations is exponentially more difficult, Hoshiko said. That pipeline got approved.
"Once they established that route for that line, everybody else wanted to piggyback," Hoshiko said. "George (Maxey) has six. There's more to come."
There's nothing anyone can do to stop the pipelines, but Hoshiko and other farmers believe three additions would make the rules protect farmers and other landowners better: take out the size requirement, and expand the definition of a pipeline.
Under today's regulations, pipelines have to be at least 12 inches in diameter before the commissioners will hold a hearing on them.
"I've negotiated for pipelines as small as 3 inches," Hoshiko said.
Oil and gas companies transport more than crude oil or natural gas.
For example, when drilling wells as deep as oil and gas ones tend to be, crews will run into produced water. It's deep in the earth and salty — so salty it's unusable, and it can even kill plants. Workers can't pour it out. They have to take it to a waste facility. Now, companies have started piping it to waste facilities.
The county's oil and gas pipeline regulations don't mention produced water, so a pipeline exclusively for the drilling byproduct likely wouldn't face as much scrutiny as others, even if companies use the same tactics to get landowners to sign off on them.
"If they have the power of eminent domain, they're going to use it for water, too," Hoshiko said.
Last, he recommended requiring companies to make funds available to compensate farmers and other landowners for enduring damages, such as less productive crops.
Oil and gas companies are not inherently bad, Hoshiko said. Their goals are simply different than his and his colleagues'.
The sooner the pipelines are in the ground, the sooner they'll bring in revenue. He also pointed out that many oilfield workers, geologists and other industry employees live in Texas, North Dakota and Oklahoma.
"They need to get it done quickly because time is of the essence," Hoshiko said. "They want to get home to their families. I understand that. (But) we're the ones that have to deal with the aftermath for the rest of our lives." ❖