Pipeline easements

What happens if landowners don't grant easements on their properties for pipelines? What does the drilling company do then?

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Permalink Reply by Canter on January 9, 2013 at 11:56am

I was approached at $15.00 a foot with a 75 foot wide easement with a 24" line. Later maybe an oil line going in. 

can anyone clue me in about the price and anything else.

Washington township, Carroll County

thanks

Ev

Permalink Reply by Jack Straw on January 9, 2013 at 12:52pm

There have been many past discussions on this exact subject.

And there have been several very recent discussions on this exact subject.

The fact that there have been so many recent discussions on this site may be indicative of the start of an active build out of needed infrastructure; a positive sign.

 

Rather than rehash all that has previously been put forward, I would suggest that you start out by using the "search" feature that you will find in the upper right hand corner of the screen, typing in Pipeline.

The bad news is that it will likely take a considerable amount of time to glean through all the information that has been posted.

The good news is that I would expect that there is much information there that will be of benefit.

 

Not trying to put you off, simply trying to get you in touch with as much information as possible ... in as quick and painless a manner as possible.

 

Once you have reviewed past discussions and have benefited from those many posted opinions, you will be in a position to ask specific questions concerning the specifics of your situation.

 

A most recent discussions is:

http://gomarcellusshale.com/forum/topics/pipeline-right-of-way-rate...

 

I will here offer several opinions:

What you have been offered is very low.

From what I understand people who have negotiated have been getting somewhere between $2 and $3 per inch diameter x running feet" of pipeline for something of the order of 24” high pressure pipeline. An example of compensation for a 24” pipeline crossing 1000 feet of property would be: ($2 - $3 /inch – foot) x 24” x 1000 feet = $48,000 - $72,000.

Add to this damages (which can be a substantial additional number, depending upon you exact situation/circumstances).

 

An additional future pipeline should be handled in a future agreement; compensated for accordingly.

 

A pipeline ROW agreement is likely to be (and for your protection should be) the most complex contract you are ever involved in (think of it as a marriage license, till death do ye part with no divorces allowed) and you have only one opportunity to get it right.

 

Do not sign anything until it has been reviewed by a qualified Attorney with O&G experience.

 

All IMHO, good luck,

                                       JS

 

Permalink Reply by Canter on January 9, 2013 at 4:06pm

Thanks Jack  Very helpful

Permalink Reply by bill on January 11, 2013 at 7:10am

Jack, I didn't realize that "damages" should be considered separately. Are you referring to things like access roads?  My contract only talks about money/inch diam times footage.  Do you have any examples of damages that I can review?  

Permalink Reply by Julie on January 9, 2013 at 2:52pm

Ha Ha! I'll be on the lookout for those big,ugly, smelly guys!!  Thanks for the response Fang.

Permalink Reply by Jack Straw on January 9, 2013 at 4:36am

RE: "What happens if landowners don't grant easements on their properties for pipelines? What does the drilling company do then?"

 

The situation varies from State to State.

In PA, Eminent Domain can only be used for Interstate pipelines or for Utilities.

For gathering lines and other pipelines, the O&G Operator needs to negotiate with Landowners in order to find a route acceptable to all.

Language contained in a Landowner's Lease can possibly complicate the situation and affect the accuracy of what was stated above.

 

Some States do no offer as many Landowner protections as PA currently offers.

It should be noted that the Industry are actively lobbying to make it easier for them to use Eminent Domain.

Personally, I fear any erosion of a Landowner's rights to protect their property from unwanted trespass.

 

All IMHO,

                 JS 

Permalink Reply by Julie on January 9, 2013 at 4:53am

I hear of these large pipes and also rows that may take 50 to 100 ft of land! That sounds like a lot of land to me and I believe it would be difficult to get easements from property owners for that much.  I guess I need schooled on what the different pipelines are used for and their sizes. If the pipelines are not allowed, does that mean the driller will not drill in that area? Also, are these pipelines along roadways? I am in Ohio. Thanks.

 

Permalink Reply by Jack Straw on January 9, 2013 at 6:01am

For the Marcellus and Utica, the high pressure pipelines tend to vary in diameter from 16" in diameter to 36" in diameter (for interstate pipelines). Sometimes multiple pipelines are located next to one another, sometimes additional (smaller) water pipelines are included to transport fresh water to drilling locations and to transport frac return water and produced formation water.

For construction space and repair; the width of ROW will be 50 to 100 ft.

RE: "I believe it would be difficult to get easements from property owners for that much."

There will be an amount of compensation that will entice people to agree to a pipeline.

If the pipeline traverses farmland, crops can still be grown over the pipeline; it will not alter that use of the property.

There is no doubt that the presence of a pipeline brings along with it long term ramifications.

A good ROW agreement can alleviate some of these ramifications ... and generous compensation can entice a Landowner to agree.

Landowners need to fully appreciate what they might be giving up (they often do not); if agreeable, Landowners should negotiate an agreement that minimizes impact, offers sufficient protections and offers generous compensation.

 

RE: "I guess I need schooled on what the different pipelines are used for and their sizes."

Google "Natural Gas Pipeline" and a lot of information will pop up.

Penn State Extension have a short publication available:

http://pubs.cas.psu.edu/FreePubs/PDFs/ua465.pdf

It is meant to be folded, so a bit difficult to be viewed on the screen.

When printed, the text is a bit small for my old eyes.

But, with some perseverance, the information is useful.

 

RE: "If the pipelines are not allowed, does that mean the driller will not drill in that area?"

It seems that they often drill first, and then attempt to sort out pipelines later. For that reason, there are a number of wells shut-in, awaiting pipelines. They get into a kind of chicken and egg situation. The a priori availability of pipelines will doubtless increase the likelihood of early drilling.

 

RE: "Also, are these pipelines along roadways?"

They can be, but usually are not.

The NG utilities distribution to customers run roads, as roads lead to homes and buildings.

But, wells are not usually along roads (nor are compressor stations or the distant distribution hubs),

Thus most pipelines run "cross country" (similar in fashion to the major electrical grids).

 

Ohio does not offer the level of Landowner protection that PA currently offers; from what I understand. it is easier to envoke Eminent Domain in Ohio.

 

All IMHO,

                  JS

 

 

Permalink Reply by Julie on January 9, 2013 at 2:53pm

Thank you for taking the time to reply to all my questions Jack.  It was very helpful.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on January 9, 2013 at 3:56pm

Julie,   My neighbors and I have been asked to sign a pipeline right of way contract for an 8 inch gathering pipeline. The contract gives the pipeline company control of of the right of way for collecting money when the larger pipelines come through.

They insist on us signing but will not add the detail required to reserve the right of way so we can collect money on each future pipeline.

My opinion is that they are getting signatures of unsuspecting landowners who will not be paid when each additional pipeline crosses their land. The Pipeline company will be taking money that should have gone to the landowners. This is similar to the bad leases that were signed in Ohio prior to landowners knowing what they were siting on. 

Do a search on my name and you'll see an example of a good contract and a lawyer in Columbus who can help you negotiate a fair pipeline right of way.   Never sign a contract with an Oil & Gas company or Pipeline company until it has been rewritten by your lawyer to protect your interests.  

I don't know of an example where a landowner has been happy with signing a contract that was brought to their door.      Ron 

Permalink Reply by brat on January 9, 2013 at 5:22am

Jack, Appreciate all your great advice.  I've got a bit different problem.  Back in 1982 a company (Yankee Gas) supposedly went around me with a flow line (I refused to let them cross my property).  Last year I finally had my farm surveyed and guess what?  I have their illegal tresspassing flow line (about 1600 feet and maybe 20 feet wide) inside my boundry lines.  This is in Ohio.  maybe 3 to 4 Clinton wells have been used to send natural gas thru it.  Not sure if it is abondoned.  Atlas Energy says they own it...and "think" it may be abandoned.  They are checking it out now, as per my recent survey results.

 

Question:  If this was you're situation, what would you do?  Would you (could you) collect fees from past gas volumn sent thru the line?  Would you sign a new ROW? and if so, what kind of $ dollars would you expect to receive?  Sue the present owner company of the line to collect for damages?

Thanks again for all your help, as well as all the other well informed individuals on this site.

Permalink Reply by Jack Straw on January 9, 2013 at 6:21am

RE: "Question: If this was you're situation, what would you do? Would you (could you) collect fees from past gas volumn sent thru the line? Would you sign a new ROW? and if so, what kind of $ dollars would you expect to receive? Sue the present owner company of the line to collect for damages?"

 

This gets into Real Estate Law; something that I know little of - so, I would seek out an Attorney that specializes in Real Estate Law.

As a (low pressure) Clinton well pipeline, it is likely small and low pressure.

Atlas were not guilty for the trespass. BUT (and that is a big But), Atlas (as successor) are fully responsible for the situation.

My personal (uneducated) opinion is that I would want compensation for the 30 years of trespass.

And, if abandoned, I would want the pipeline removed (and payment made for damages incurred).

If not abandoned, you need either: a ROW agreement or you need it immediately shut down and removed.

 

If Atlas are smart, they will come to you with their tail between their legs and seek out a fair settlement. The bad news is that big companies employ Attorneys, attorneys who need to have something to do to occupy their time; sometimes they do not do the smart thing.

If you stay cool and your requests are reasonable and they are reasonable (and generous), there should be a good outcome. You would seem to be on the right side of the law; while they are on the wrong side of a boundary.

 

ALL IMHO, nothing I have stated should substitute for the advice of an Attorney with real Estate experience,

 

Good luck, and please let us know how things turn out,

                                                                                           JS

 

 

 

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