Red Oak Pipeline & Future Condemnation Proceedings in Texas


Jan 20 2020

Red Oak Pipeline

Texas landowners are all too familiar with large oil pipeline projects. These projects, while great for oil and gas companies, often negatively impact both the environment and local communities. Texas condemnation law allows oil companies and governmental entities to seize and acquire land for “public use” in order to clear a path for pipelines. That being said, the Red Oak Pipeline project creates the very real possibility that many Texas landowners will soon face condemnation proceedings. Here is what you need to know about the Red Oak Pipeline project and what you can do to protect your rights.

 

What is the Red Oak Pipeline?

The Red Oak Pipeline is the product of a joint venture between Plains All American Pipeline and Phillips 66 that will enable producers based out of Cushing, Oklahoma and the Permian Basin to transport oil to Houston and locations throughout the Gulf Coast. The Red Oak Pipeline will span 650 miles and will move approximately 400,000 barrels of oil per day. The project was announced in the middle of 2019 around the same time that the Liberty Pipeline project was announced. Plains All American and Phillips anticipate that the Red Oak Pipeline will begin operations sometime in the first quarter of 2021. The project is estimated to cost a total of $2.5 billion.

The parties have stated that they intend to make use of existing pipelines and utility corridors where possible in order to minimize environmental and community impact. However, due to the massive scope of the Red Oak Pipeline project, combined with the Liberty Pipeline project, the projects will undoubtedly impact Texas landowners by way of potential condemnation proceedings.

 

Who is behind the Red Oak Pipeline?

The Red Oak Pipeline project is a 50/50 joint venture between Plains All American Pipeline LP and Phillips 66. The parties have created a special limited liability company (LLC) called Red Oak Pipeline, LLC for purposes of the venture.

Plains All American “Plains” is a publicly traded limited partnership that was founded in 1998 and is headquartered in Houston, Texas. Plains owns approximately 37 million barrels of terminal and storage capacity, as well as 15,000 miles of crude oil pipelines. Phillips 66’s origin dates back to ConocoPhillips. The company is publicly traded on the New York Stock Exchange. Phillips is headquartered in Westchase, Houston, Texas and has over 14,000 employees worldwide.

 

Part of a Bigger Picture: Plains All American’s Sunrise II

The Red Oak Pipeline project is part of a much larger effort by Plains All American to serve the Cushing and Gulf Coast markets from Permian crude oil supplies. Producers in the Permian basin and Western Canada have faced challenges as oil production has exceeded capacity. The projects are part of a widespread effort to increase pipeline capacity. The Plains Sunrise Pipeline oil system was put into operation in the fourth quarter of 2018. The Sunrise extension can move about 500,000 barrels of crude oil per day from Midland to Colorado City and Wichita Falls, Texas. The extension has connections to Cushing, Oklahoma. The Red Oak Pipeline will serve to transport oil further from Cushing all the way to various strategic points on the Gulf Coast. .

 

How many miles is the Red Oak Pipeline Project?

The Red Oak Pipeline will be approximately 650 miles long. A new 30” pipeline will run from Cushing to Wichita Falls and Sealy, Texas. A new 30” pipeline will run between Sealy to Corpus Christi and Ingleside. A 20” pipeline segment will span from Houston to Beaumont.

 

Counties affected by the Red Oak Pipeline Project?

Since the Red Oak Pipeline project spans such a large distance, its construction will impact landowners in many Texas counties. Texas property owners in the following counties could face the very real possibility of Texas condemnation proceedings:

  • Bee County
  • Brazos County
  • Burleson County
  • Chambers County
  • Clay County
  • DeWitt County
  • Falls County
  • Fayette County
  • Goliad County
  • Gonzales County
  • Grimes County
  • Harris County
  • Hill County
  • Jack County
  • Hefferson County
  • Johnson County
  • Lavaca County
  • Liberty County
  • McLennan County
  • Montgomery County
  • Parker County
  • Refugio County
  • Robertson County
  • San Patricio County
  • Tarrant County
  • Washington County
  • Wichita County
  • Wise County

If you are a landowner in any of these counties, be on the lookout for communications from right-of-way agents that represent Red Oak Pipeline. These agents may contact you in order to survey your property in order to determine what portion of your land is being condemned in connection with the project. If you are contacted by such project representatives, say as little as possible and immediately contact an experienced Texas eminent domain lawyer. The Texas Landowner Bill of Rights grants you important protections in Texas condemnation cases, including the right to seek legal counsel and/or professional representation for assistance in such matters.

 

Project Timeline

The Red Oak Pipeline project was officially announced in the middle of 2019. Plains All American and Phillips 66 expect that the pipeline will be operational sometime in the first quarter of 2021. This is a very aggressive construction schedule, and it is not clear if the pipeline will be completed by then. However, if history is any indicator, the Sunrise Pipeline system opened ahead of schedule.

 

Why is this Pipeline Needed?

The Red Oak Pipeline is needed to address a large discrepancy between oil production and pipeline capacity. Oil producers in the Permian Basin and Western Canada have been producing oil at a rate that greatly exceeds the available pipeline capacity. When completed, the Red Oak Pipeline will go a long way towards moving the increased supply. Cushing is also the delivery point for U.S. crude futures contracts. Supply at storage facilities in Cushing have decreased significantly due to a lack of pipeline capacity.

 

You Have Rights as a Property Owner

Landowners and property owners in Texas have important rights and protections when faced with condemnation actions. The Texas Landowner Bill of Rights, as well as the U.S. and Texas Constitutions, forbid the seizure of your property without first providing just and adequate compensation. Unfortunately, governmental entities and large oil companies often seek to look after themselves first, and pay you as little as possible for your land and other damages.

If you are a landowner in Texas that has been contacted by an agent in connection with the Red Oak Pipeline project, it is important that you consult with an experienced Texas eminent domain lawyer as soon as possible and avoid signing any documents that are provided to you by agents for the oil companies without proper representation. An experienced eminent domain lawyer will assist you in determining whether said agents and/or representatives are operating in good faith, as these entities seeking to condemn your land must follow important procedures outlined by the Texas Property Code and applicable case law. Whatever deadlines may be initially imposed upon you, understand that you have time. Use it to learn and exert your rights!

 

Will you be Impacted by the Red Oak Pipeline Project?

If your property is in the path of the Red Oak Pipeline, it is possible that your land or property may be condemned. If you receive a notice or a visit from an agent for an oil or gas company, do not panic and do not sign any proposed agreements without proper representation. Rather, politely decline and state that you would like a chance to discuss the matter with your attorney. Contact a Houston eminent domain lawyer to discuss your options.

Our firm has successfully represented many landowners facing Texas condemnation actions for oil and gas pipeline projects. For any questions regarding Texas condemnation practices, the Red Oak Pipeline Project, or your options regarding the same, please do not hesitate to contact our office.

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