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Pipeline bill readied

Sabin to reintroduce measure to protect landowners.


A PIPE WILL RUN THROUGH IT: The route of the Diamond Pipeline, from Cushing, Okla., to Memphis.
  • A PIPE WILL RUN THROUGH IT: The route of the Diamond Pipeline, from Cushing, Okla., to Memphis.

The Standing Rock Sioux aren't the only people who don't want their land and water exposed to crude oil from the Bakken Shale. The Diamond Pipeline project, which is snaking a Valero oil pipeline across Arkansas from Cushing, Okla., to its refinery in Memphis, has also created unhappiness. But perhaps because it affects folk individual by individual, rather than the contiguous property of a tribe, public demonstrations against it have been few, and not well attended.

Rep. Warwick Sabin (D-Little Rock), who questions whether the pipeline meets the standard of public use that state law sets in granting the right of eminent domain to oil companies, is the voice of the disparate people affected by the Diamond pipeline. He will reintroduce his bill "The Property Rights Protection Act" in the 91st General Assembly that convenes Monday, Jan. 9.

Though conservative lawmakers usually seek to limit takings of private property, members of the House Insurance and Commerce Committee showed themselves in 2015 to be reluctant to place any burdens on the oil industry and did not give Sabin's bill a "do pass" out of committee.

Arkansas allows oil and gas pipelines companies to exercise a right of eminent domain if property owners do not agree to grant them easements. Sabin's bill, which addresses oil pipelines solely, would require that companies provide landowners better notice of possible taking, documents that spell out the landowner's legal rights, make the oil company liable for damage done to a property, and require the company to demonstrate to the state Public Service Commission the pipeline's benefit to the public good.

Valero and Plains All American Pipeline's $900 million project to transport crude oil through the state's mid-section first became known in 2014, when Plains began surveying properties along the proposed path. The company began acquiring rights and clearing easements in 2015. The companies were required to get permission from the U.S. Army Corps of Engineers to cross the state's streams and rivers, and did so in August. State agencies have little regulatory authority over the route. Allison Millsaps, who lives near Dover, testified in 2015 before Insurance and Commerce about her family's bad experience with Diamond Project surveyors. Her mother-in-law, Clara Dotson, who lives on 80 acres outside Dover, received no prior notice about Diamond's plans. Instead, a surveyor just "knocked on her door," Millsaps told legislators, and told her he was there to survey her land; when Dotson said no, he told her the company would just take it, which it did, by getting a court to grant a temporary taking.

Landowners are entitled to compensation for the taking of their property. However, in one case, Plains/Valero offered one couple less than $5,000 for an easement on a route that ran 24 feet from the foundation of their $200,000 home, a route they said would make it difficult to sell. They went to court and eventually settled with the company for an undisclosed sum.

Under Sabin's bill, the company would have had to provide Dotson prior notice, explain the eminent domain law and inform her what her rights were regarding fair compensation for the taking. "We were left in the dark, we didn't know what was going on, we didn't know where on the property the line was going to be, we didn't know if it was going to be above ground or below," Millsaps told legislators. "They were not open with us at all. It was a horrifying experience."

Rep. Mark Lowery (R-Maumelle) suggested to Millsaps that more regulation would add to people's confusion. Millsaps rejected that, saying more information would be better. "We can't protect ourselves and you can help protect us," she told him.

To Rep. Charlie Collins (R-Fayetteville), who suggested that making oil companies be more transparent about their business would raise the price of gasoline, Sabin noted that he, like Collins, is a "free market capitalist," and that the government shouldn't "conspire" with private industry to keep prices below market rates. He also reminded Collins that he was before the committee representing Arkansas voters who want to protect their property rights.

The Clarksville City Council passed a resolution Dec. 12 endorsing Sabin's bill. Clarksville residents were alarmed by the Diamond route's nearness to its drinking water supply. After the city threatened to testify against the company before the Public Service Commission, Plains All American put $6.6 million into an escrow account for damage mitigation and relocation of the intake valve in the lake that supplies Clarksville and a large part of Johnson County its water. The escrow account can be raised to $8 million if other issues arise, Alderman Danna Schneider said. (The PSC's regulatory powers over the pipeline are restricted to a determination on whether it would threaten public safety or violate state law on public use.)

Sabin, who says there is a "lot of interest on a bipartisan basis" and more awareness of the takings issue than there was two years ago, maintains that the Diamond Pipeline is not a public use. "No one in Arkansas is going to utilize the oil that is being transported across our state. If you believe in the free market, the company ought to find a way to convey its product across people's property by negotiating a fair price instead of relying on the government to, in effect, condemn the property to give to a corporation. That is the opposite of capitalism and what we understand to be our private property rights," he said in an interview.

Sabin also said he was concerned about the safety record of Plains All American, which was indicted in early 2016 in California in connection with an spill that covered Refugio Beach in Santa Barbara with 140,000 gallons of crude oil.

Protests against the pipeline continue. In December, two members of a group called Arkansas Rising chained themselves to a backhoe to stop construction of the line near Forrest City. Frank Klein, 61, of Mount Ida, and Amber Stoelbarger, 24, of Jonesboro were arrested on charges of criminal trespass. They are scheduled to appear in court Jan. 18.

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