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Longmont council to weigh settlement in pipelines lawsuit

The Longmont City Council will discuss Tuesday whether to settle a lawsuit about oil and gas pipelines on the edge of some of the city’s open space.

Energy company Kerr-McGee Gathering LLC sued the city in September 2014 over a 50-foot right of way on the eastern edge of the open space surrounding Union Reservoir, north of the intersection of Weld County Road 5 and WCR 28. The city leases that section of open space to Sipes Farms LLC, which uses it to grow corn, alfalfa, barley and sugar beets.

Kerr-McGee said in its lawsuit that the company had acquired the right of way with the permission of the original land owner to build and maintain three pipelines to transport “oil, gas or other substances” through the property. Additionally, the contract said that if Kerr-McGee didn’t use the right of way for a year, they would lose it to the land owner.

However when the company began to disconnect the pipelines to replace them, the city began waffling on various permits and later said that Kerr-McGee had forfeited their rights on the 50 feet because the pipelines had not been in use for a year, according to the company in court documents.

Kerr-McGee asked the Weld County District Court to prevent the city from obstructing the company’s use of the right of way. The city asked the court to set a cost the company must pay the city and require Kerr-McGee to pay for the city’s court costs and attorney fees.

Now, the city and the company have reached a tentative settlement agreement in which Kerr-McGee must pay the city $142,530 and neither the city nor the company can sue one another on this same issue ever again.

In related news, Longmont fracking ban lawsuit wedged between two ’92 cases.

In the other parts of the settlement, Kerr-McGee must:

  • Tell the city about installation, inspection and testing on the pipelines
  • Notify the city within 24 hours of any leak and will fully clean up any leak or damage from a leak and the city won’t be responsible for a leak
  • Not hold the city liable for any lawsuits, environmental or otherwise that result from the pipelines
  • Not keep any equipment above ground, except if it’s necessary for safety
  • Only access the right of way from WCR 5
  • Pay for any future relocation of the pipelines within the right of way if the city needs the space for infrastructure needs
  • Perform maintenance and construction to minimize crop loss to Sipes Farms and to pay for crop loss for two years after any construction, or longer if crops don’t bounce back by then
  • Allow Longmont to transport oil, gas and water through the pipelines at market rate

On the last point, City Attorney Eugene Mei said that Longmont does not have a current deed to transport oil and gas, but the stipulation was agreed upon in case the city is involved in mineral development in the future.

City staff is recommending that the council approve the settlement agreement calling it favorable to Longmont and noting in a council memo that the pipelines “have been operated safely for decades, and pipelines transport of oil, gas and water was a far safer and efficient alternative to truck transportation.”

As of the beginning of March, the city has racked up $11,235 in attorneys fees for this case, according to the council memo. Staff estimated the cost of going to trial with Kerr-McGee would be roughly $85,000 and settling would allow the city to “focus its attention and resources” on appealing a fracking ban lawsuit the city lost in Boulder County District Court.

This article was written by Karen Antonacci from Daily Times-Call, Longmont, Colo. and was legally licensed through the NewsCred publisher network.

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