Pipeline Easements

Easement agreements are formal legal agreements granting the pipeline operator long-term use of a right-of-way. A change in ownership of the property does not alter the easement agreement. Because easement agreements are legally binding contracts, landowners should have the contract reviewed by an attorney before signing . Many aspects of a pipeline easement are negotiable. The landowner should consider any contract offered  to be a starting point for a two-way negotiation, or it can be fully accepted or rejected by the landowner.

Following is a list of some  considerations that should be included in a pipeline agreement or addressed with an addendum:

  • Establish the width of the permanent easement and time line for completion of construction.
  • Define the nature and width of the temporary construction easement.
  • Require identification of any independent and sub-contractors that the pipeline company will use and make the pipeline company responsible and liable for all acts on your property by independent and sub-contractors.
  • Require the pipeline company to indemnify (not hold legally liable) the landowner from the acts and omissions of the independent and sub-contractors.
  • Define and limit access to both permanent and temporary easements.
  • Specify payments for trees, crops, and other plants damaged during the installation of the pipeline.
  • Specify re-seeding requirements of easements, such as the types of grasses and other improvements.
  • State the amount of time following completion of construction for surface restoration to be completed.
  • Identify all stream crossings, state methods of stream crossings, and require restoration of stream crossings after construction.
  • Require the landowner be provided an “as constructed” survey of the easement with an official seal      by the surveyor within a stated period of time following completion of construction.
  • Specify replacement or installation of fencing and gates, stating which gates will have locks and nature of the locks.
  • Limit number of keys or number of persons with lock combinations.
  • Identify the named person at the pipeline company who will be the landowner’s contact. Require the pipeline company to give 30 days prior notice to landowner of any change in contact person or contact information.
  • Define access post-construction to the easement with specific method and location of all  access roads and methods.
  • Prohibit or limit surface accessories to the pipeline.
  • Require minimum depth to top of buried pipeline and require that this minimum depth be maintained at all times.
  • Terminate the lease by stated number of days of no use of the pipeline.
  • Define “abandonment” of the pipeline as a termination of easement event and require the pipeline company to remove all abandoned pipeline.
  • Require prior landowner consent for any assignment of the easement to another party.
  • Limit the easement to one pipeline of a stated diameter, with no right to install additional pipelines and no right to increase the diameter of the pipeline.
  • Require the same      post-construction restoration of surface for pipeline repairs as for original construction.
  • Reserve the right to seek surface damages for pipeline repairs as for the initial installation.
  • Confirm whether gas to be transported will be scented or unscented.
  • Ensure that the permanent and temporary easements are by metes and bounds descriptions and with official surveys – pre-construction and post-construction (as-built survey).
  • Choose an alternative dispute resolution method that makes it the cheapest, quickest, and least burdensome way to resolve conflicts between landowner and the pipeline      company.
  • Consider what surface uses by the landowner will be prohibited, if any, on the easement.

Payments to landowners for granting right of way easements can be quite variable between pipeline operators and from location to location. Most payments involve a set dollar amount per linear foot (or per ‘rod’ which is 16.5 feet). Historically,  easement agreements have ranged from less than $5.00 per linear foot to more than $25.00 per linear foot.

There is a post on GMS indicating a current offer of $50 per linear foot.

Some pipeline operators will also offer a ‘signing bonus’ (a fixed dollar amount for signing an easement agreement) in addition to the payment per linear foot. The amount and terms of payments need to be in writing before signing an easement agreement.

 

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Replies to This Discussion

Permalink Reply by Dan on January 30, 2012 at 2:05am

Do you have any other information on that, Josh?  What acreage is that based on?  Just the strip of land that the pipeline takes up, or the entire property? I thought they were basing their offers on linear foot, not acres. Is that a one time bonus payment?  Any other annual payments?  Have you seen the other terms in the easement contract?  Were you made this offer directly from a pipeline company?

Permalink Reply by Josh on January 30, 2012 at 8:39am

It is based on linear feet x 50' is what I was told and they are including the existing pipeline easment in that figure(not sure why?).   As far as I know it is a one time payment, which also doesn't make sense.  This was just info that passed over the phone from a pipeline company.  Should have better info later this week.

Permalink Reply by Philip Brutz on January 30, 2012 at 11:54am

Have you they approached you for a ROW on your land?

Permalink Reply by Dan on January 31, 2012 at 1:18am

Katherine I agree with your complaint of a one-time payment for a perpetual easement.  My understanding though is that there could be some stand pipes sticking up above the ground but almost all the time the line itself is buried below the ground out of the way of mowers and even plows, so that shouldn't be a problem.  Still the easement is a restriction to construction, and has to be kept accessible and clear for gas company access, so it still has it's drawbacks.

Permalink Reply by Billy Bob Meeker on March 17, 2012 at 4:20pm

As of mid-March 2012, the current easement payment being discussed by the pipeline agents in Harrison Co. is a one-time $15/linear foot. 

Using Josh's ROW width of 50', and 43,560 sq.ft./acre, this would be a strip of land 871 ft. long.  At a per-acre payment of $7,000, this yields only $8.03/linear foot.  At the present quoted rate of $15/linear foot and a 50' ROW, the per-acre value is $13,065.  As before, this would be a strip of land 871' long. 

Maybe $13,065/acre is a pretty good price for Harrison Co. property, but considering the millions of dollars worth of gas that would pass through a pipeline, it sounds like chump-change to me.  As has been stated before, our land is our asset.  If the gas companies want to make millions of dollars from the gas, we should get a decent cut for allowing it to pass through our property.

Permalink Reply by Billy Bob Meeker on March 23, 2012 at 2:07am

Why should a pipeline easement be a one-time payment for a "forever" easement?  Although the pipeline companies would fight this tooth and nail, why not propose an "easement lease"?  

Pipeline company would pay an initial fee ($15/ft) for a 5 or 10 year easement lease (defined width, defined route, specified number of pipes).  At the end of lease period the pipeline company has right to renew the easement lease for an additional term for the same initial fee plus, say, an additional 15%.  The easement lease term could be renewed indefinitely at the pipeline's choice, but each renewal would be for a fixed term and an additional fee each time being increased 15% each time.  Failure to make a renewal lease payment after 6 months of expiration date results in forfeiture of easement back to landowner ... including whatever is buried in easement.

Considering the millions of dollars worth of gas passing through the pipeline under my property, why should I not be entitled to a small cut of the action?  This type of easement lease would be chump change for the gas companies considering the value of the gas being handled.

Permalink Reply by Al Cramblett on May 15, 2012 at 5:17am

I think that it is very clear the landowners who took the time to search and join a landowners group or, alternatively, took the time and effort to educate themselves before signing an oil and gas lease obtained the best deals. I strongly believe the same strategy applies to pipeline right of ways (ROW). The market value of an ROW is determined by the size of one's acreage, the size of the pipe line and number of pipelines to be laid, and damages to one's property such as having to clear-cut a wooded area. I have personally confirmed that a Carroll County group received $42 per foot. This was for an ROW for  two 12 inch lines. I would suggest that the smart approach for any landowner considering granting an ROW would be to contact his or her neighbors and band together forming your own group. In the meantime, I am attempting to identify companies that would be interesting in facilitating a larger pipeline ROW lease in Harrison County. Be patient, DO not sign any contracts at this time.  It's too early!

Permalink Reply by Philip Brutz on May 15, 2012 at 8:27am

Katherine,

Pipelines are almost always underground below plow depth.  I have a main transmission line running across my property.  The only way you would know that it is there is from the marking poles and a couple of times a year they come through and mow the grass.  I agree with Al that the neighbors should join together and form a group to negotiate the best contract.    

Here is a very in depth link from the Argonne National Laboratory on gas pipelines http://corridoreis.anl.gov/documents/docs/technical/APT_61034_EVS_T...

Permalink Reply by gary e hall on May 18, 2012 at 4:29am

spectra energy is surveying on my family farm now .they started yesterday we havent talked money yet or anything else 

Permalink Reply by Billy Bob Meeker on May 18, 2012 at 5:04am

Gary,

See my March 23 posting in this thread regarding my suggestion of trying to negotiate a renewable ROW "lease" rather than a one-time payment.

Permalink Reply by Dan on May 21, 2012 at 10:27am

PIPELINE MEETING TONIGHT AT 6:30 pm

Sorry this is last minute, but I just heard about this today. It is at Harrison East Elementary in Hopedale, and it specifically concerns the 1,230 mile Appalachia-to-Texas (ATEX) Enterprise pipeline that will stretch across 13 central and southern Ohio counties, including Harrison, to transport millions of barrels of ethane to the Texas Gulf Coast.  Because it is an interstate pipeline, they may be able to invoke eminent domain to place it on your property if you are in the pathway.  The law firm giving the informational talk specialize in eminent domain issues and can explain the approach Enterprise is taking to secure leases for this pipeline, and what you should understand about your rights as a landowner.  Information is free.  This law firm, Goldman and Braunstein, apparently has a no risk option for letting them represent those who are interested in the easment negotiations with Enterprise.  Read the attached flyer for more details, or to find out how to contact them if you can't make it to the meeting. I'm not endorsing them; just passing this on.  If anyone has direct experience in dealing with them, or has comments after attending the meeting tonight, please share. 

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Permalink Reply by Dan on May 22, 2012 at 4:03am

The proposed ATEX pipeline route through Harrison County:

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