Pipeline ROW is forever
The closest thing to eternal life we may ever know is a pipeline right of way.
In 1886 the Standard Oil Co organized the Buckeye Pipeline Co to move it's products out of western OH. Many of the ROW are still in existence in OH, PA and NY. They are still used till this day, that's 127 years.
So when you are negotiating a pipeline ROW take your time, be very thorough you will be living with it for the rest of your life. Not only will you live with it, your children, grand children even great grand children will be affected by the decisions you make today.
In posts to other threads about this subject, people have warned that if you don't cooperate with the company they will go around you. If the company goes around you then you will miss out on the financial rewards. This may be true, but we have seen the results of this type of thinking here in the Marcellus and Utica plays. Many land owners rushed to sign leases to receive the bonus money without a thought for the language of those leases, and about the affect to their property. We see their stories regularly here on GMS.
We should all learn from our mistakes, and the mistakes of others. Take your time and be very thorough, if you can't get comfortable with the terms of the agreement then pass. Otherwise we, will be hearing from you in the future and how your bad decision has hurt you and your property.
Mark
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Replies to This Discussion
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Permalink Reply by Michael Allen on -
The critera I have always used on determining whether or not a property is fam land or projected to become a subdivision, trailer park or whatever, is the evidence of some prior design. That can be as little as having a landscape conception, a preliminary survey, minitues of a P&Z meeting prior to the pipeline coming into town, etc. If I see that, evidence, then as far as I am concerned, the property should be classified as a subdivision and paid out accordingly. I have worked with at least 10 major subdivisions, one of which was a multimillion dollar exclusive luxury subdivision. Lots sold for $350-1mil each. We designed the pipeline to come up the main street median all the way through the subdivision and then went across 5 properties along their back fences. Even if there is a very good inclination that a future subdivision is possible, we work with the landowner to place the pipeline, as best we can, to accomodate some of the land features.
In a condemnation court, I have yet to see a company go after farm land values if there is evidence for development. If you did, then I would no doubt appeal, if I were you. In court, it is always the battle of appraisers as to what is just compensation to the landowner. I have seen great appraisers that were terrrible on the stand and lost their case just because of their presentation, not because of their appraisal skills. One must understand that a judge isn't an expert on the subject matter and the "appraisal 101" is how one must present their case.
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Permalink Reply by 2z248p19vqnh9 on
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Thank you for your FINE explanation in how things DO get looked at by someone such as yourself , IF people have the knowledge/understanding concerning these matters - as you do...they could THEN take that into consideration. Are you a 'commercial' or residential'?...or another such 'class' of appraiser in the field? - This info. too would be good for people's understanding concerning these ***'gasland matters'***....Cert. Gen. Appraiser. I just noticed, Mike...but YOU do have more EXPERIENCE (as well as through your very own 'family matters'...) CONCERNING farmland & such. ***IMPORTANT to ask WHAT *KIND* of EXPERIENCE different appraisal individuals have exposure to - yes?...many individuals generally go to 'residences' as a 'general appraisers'. So - ASK! It pays to be informed....
AND what kind of 'roundabout' fees would be incurred IF your council were to be pursued (or another appraiser...) - IN GENERAL, a 'round-about figure' so that people can understand WHAT fees may be involved for services such as yours would be incurred..... I ask because people may believe that services such as what you provide could be 'out of their ballpark' & if they had a *general idea - they MAY be more inclined to address services such as yours. - Your advice would be priceless to many - as it has been thus far.
Again - thank you, Mike Coles, Cert. General Appraisal. Blessings.
As one light lights another, nor grows less - so nobleness enkindles nobleness. Thank you for your time.
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Permalink Reply by mark on
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GG thanks for the info and as I said been loafing else where on GMS(the universe as you would say) our sitations are very very simliar in as much the landman from range at our first meeting he came out and said we got to get a deal done with mark west he went so far a to what we wanted a foot etc info on pipelne was descriptive thanks we are getting ready to sign O/G lease probley couple of days we thought of same you stated 3-30-13 post hey can we friend up and discuss it moe privately ? gentlemen thank-you for the very informative answers mark
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Permalink Reply by Michael Allen on
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Many studies have been done on pipeline right of ways and their effect on land values. In every case the depreciation is less than 1% or none at all. On building lots the main focus of the buyer is location. On wooded property little or no effect on a buyer. Power lines have much more effect on property sales than pipelines. Any perceived loss in value is certainly made up by inflated easement payments vs actual value/ acre.
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Michael A. - you mention 'Power lines' - what if a piece is 'naked' of anything but trees/forest...would you then say ANY 'future development/building' of a property would be able to be 'figured out' down the road?...and that matters in general should be deemed ok?
As one light lights another, nor grows less - so nobleness enkindles nobleness. Good info.
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Permalink Reply by Jack Straw on
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RE: "Many studies have been done on pipeline right of ways and their effect on land values. In every case the depreciation is less than 1% or none at all."
If "many studies have been done", would you please provide references to where I could locate a couple dozen of these studies?
Also, I would be curious to know who funded these studies. I could pull out an old study that details how smoking tobacco cigarettes is good for (funded no doubt by the tobacco industry).
RE: "On building lots the main focus of the buyer is location."
Am I correct in stating that you cannot build on top of a pipeline?
Not even a parking lot, unless such a use had been written into the original ROW agreement.
The presence of a pipeline can make the value of a property essentially worthless (except perhaps as a hike & bike trail).
RE: "On wooded property little or no effect on a buyer."
A rather curious statement. When a pipeline crossed my wooded property, they cut down all the trees. And through regular mowing, they make sure that no trees will ever grow on that pipeline ROW, for the life of the pipeline.
Since my wooded property is a tree farm, and there are a number of acres over which I cannot grow trees, I would say that a pipeline crossing wooded property (and making a substantial portion non-wooded) does result in a substantial lose of value.
RE: "Any perceived loss in value is certainly made up by inflated easement payments vs actual value/ acre."
Not everyone receives "inflated easement payments". In fact I doubt that the majority of landowners receive "inflated easement payments". Not when the easement is confiscated by seizure through "Eminent Domain". And, not when the Landowner is burdened by the terms of an old (or even ancient) ROW agreement that allows for no remuneration for additional pipelines or replacement of an existing pipeline with a new (larger) pipeline.
To me, your statements sound more like industry propaganda than statements of fact.
To me, your statements defy both basic logic and simple observations.
All IMHO,
JS
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Permalink Reply by Michael Allen on
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I will try and answer some of these questions and rants.
I am a contract land agent/supervisor/manager and have worked for numerous different clients. O&G companies rarely if ever hire permanent land agents to work on projects, they hire experienced land agents to work the project and then do a RIF. The operations & maintenance (O&M) folks left are company employees that handle everything after the project is completed.
Farm land is what it is, used for farming, not subdivisions. Most won't "perk" and would never comply with any permanent human building sites. Pipelines can be constructed properly with little or no future impact for farming. I will admit that repairing plastic tile pipe is a problem, but it can be fixed. Older tile is usually cut or broken through and doesn't cause as much of an effort to repair or replace.
Timbered land has already been discussed and payment proceedures outlined. If the project does not have eminent domain and you don't want a pipeline, tell the company to shive it. If the project does have eminent domain power, try and negotiate the best route possible through your property. Along a property boundary is usually the best location if possible.
Pipelines can not have buildings on them but pipelines can run in the front or back yards with no problems. High pressure natural gas lines are allowed up to 25 feet from an occupied home or dwelling.
A very large appraisal firm from the west coast did an extensive report on property that was sold after a major pipeline was constructed and re-vegetated. Lots were sold with the pipeline easement in back yards and down medians of main streets. Less than 1% of the potential buyers decided not to buy a property due to the location of the pipeline. Other appraisal studies have done a "before and after" study of sales and affects of pipelines with little or no buyer decline due to pipelines. There is more of a potential for pipeline hazards in small, low pressure distribution pipelines than there is with high pressure gas pipelines. Liquid product pipelines have an even better safety record since their pipe is usually smaller diameter and lower pressures.
Inflated easement payments such as $2-$4/inch/foot equate to the following: $4X16" =$64/foot. 1,000 feet long and a 50 foot wide easement = 50,000 sq. ft. / 43,560 sq. ft. in an acre = 1.15 acres. 1,000 feet X $64/foot = $64,000/ 1.15 acres = $56,140 payment per acre. Property values in rural areas are never in this value range, so I am calling the values being paid, inflated. Future speculation of acerage values can not be used or contemplated in an appraisal.
If you recall, I have advocated under eminent domain projects, for a landowner to try and get as much as you can under the terms and conditions of the easement and then do the best you can with the money. In every case of representing a company, the last offer before going to court was way above the appraised value, but once you go into court, those offers disappear and the appraisal is what the judge can rule on. Not the route, not extra stipulations on the easement, and not any benefits to the landowner, only the money based upon an appraisal. Like John Wayne said, life is tuff and not very fair, but it is what it is.
I am not spouting industry propaganda, just the real life experience from 30 years doing this kind of work. When I supervise a project, all of my agents and myself try and act as agents more for the landowner than the company. We try and educate the landowner what their real options are and what the company can and will live with on the project and after we are gone. Landowners can agree or not, that is their right, but I have always been a "tell the truth as it is" kind of person and always will.
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Thanks - very helpful & informative - in words that were understandable for the common man - much appreciated.
I know that you know & all here know - that THIS entire 'bee's nest' is something we'll all 'come up against' - once in our lifetime. Again, appreciate your words of advice.
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SO...if I'm 'reading you' right...in the 'John Wayne' paragraph - that they will approach, approach, approach...and then 'one final shot' for you before you basically get 'sucker punched' - not in so many words, anyway. THAT's just not right....sounds a bit like 'highway robbery'?! *WHERE IS that rascal, John Wayne when you need him? Just not right (if I'm understanding you correctly...am I?)
As one light lights another, nor grows less - so nobleness enkindles nobleess. (especially with all of this 'mess' - good mess, but messy none-the-less!)
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Permalink Reply by Michael Allen on
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There should never be a "sucker punch" by the company during a negotiation. Landowners should be aware of how the negotiation is progressing and what steps the land agent must take. When a company land agent tells you that the company has ordered an appraisal for final offer, you had better pay attention. That means things are getting towards the end of formal negotiations. These types of appraisals are very expensive and the company doesn't order them lightly. If it does go to court, you will have to have your own similar appraisal at your own cost. In the end, going to court, it is a battle of appraisers as to what value the judge rules is adequate "just compensation" for the easement across your property. Remember to make sure your words are always sweet and tender, as one day you may have to eat them.
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Natural Gas Pipeline Right-of-Ways: Understanding Landowner Rights ... Penn state info...
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Mark - I'm just not 'computer savy' enough...but try!
Natural Gas Pipeline Right-of-Ways: Understanding Landowner Rights ... - good beginning...
...http://un-naturalgas.org/EricCampsPipeLineNegotiation.pdf - good info. ...
5 Types of Natural Gas Pipelines - Flowlines, gathering lines, tran... - lines
...What Is The Value Of Your Pipeline? | Pipeline & Gas Journal - good info...keep going...
...New Ammunition for Negotiation of Oil and Gas Pipeline Easements fo... - hope this helps...
WHEW - NOW to rest...
As one light lights another, nor grows less - so nobleness enkindles nobleness.
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