CHICAGO (CN) – Construction of a 170-mile-long oil pipeline will move forward in Illinois after the 7th Circuit affirmed the right of Enbridge Pipelines to enforce easements on 18 properties that had resisted the development.
Enbridge’s predecessor laid 120 miles of pipe in 1939, made possible by a series of easements valid “so long as [the] pipe lines or other structures are maintained.”
Though the line has been inactive for almost a quarter of a century, Enbridge sought to extend the line and replace the 10-inch diameter pipe with a 36-inch one. Property owners challenged the move, however, arguing that the easements had been invalidated since Enbridge allowed the pipeline to fall into disrepair.
Of the original 25 suits, three were settled and the rest were decided for Enbridge. Eighteen property owners appealed.
A three-judge panel ruled on Monday that the claims of disrepair were vastly exaggerated. Even so, Enbridge did not need to keep the property in good condition to legally maintain it.
“Maintaining the pipeline [means] preserving the option to use the easements for future transportation of oil, even if the existing pipeline crumbled to dust,” Judge Richard Posner wrote for the court.
Such a definition allows investors to speculate on a property’s value and refrain from developing the land to turn a profit at a later date.
“An investor who believes that development would be premature may be willing to pay more for the property than someone who wants to develop it immediately, and it would be a mistake to burden far-sighted investment by conditioning ownership on use,” Posner wrote.