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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Permalink Reply by mark on April 7, 2013 at 1:10am

GG   pipelne
rep told us they were going o put a "spur" line in aprox 10'" in diameter and supposably low pressure any idea what classification from the link it might be?  kinda concerned about E.D. and I don't mean erectile disfunction thanks for your thoughts

mark

Permalink Reply by Michael Allen on April 7, 2013 at 1:55pm

I am familiar with the Texas Donnell case and it was amazing to all concerned that the appraiser got away with his speculation on devaluation. There certainly was no proof of his claim. It will never hold up in Texas Supreme Court. If it does, no more pipelines will be built in Texas until that new law is overturned. Same thing with power lines and water lines, all will come to a hault.

Permalink Reply by Jack Straw on April 7, 2013 at 3:06pm

The jury awarded the Donnells about $468 per rod for a 16" diameter pipeline.

That works out to $1.77 per inch-foot of pipeline ($468/rod  x  1 rod/16.5' =  $28.36/foot ... then ... $28.36/foot  / 16 " pipeline = $1.77 per inch-foot of pipeline).

 

The award of $1.77 per inch-foot seems quite reasonable; a bit low for the Marcellus or Utica.

 

RE: "It will never hold up in Texas Supreme Court."

Why not?

 

RE: "no more pipelines will be built in Texas until that new law is overturned."

A bit of hyperbole there. The award of $1.77 per inch-foot would amount to about 1% of the total cost to construct the pipeline.

I have not read any reports of the Oil & Gas Operators and Mid-Stream Pipeline Operators ceasing all new pipeline construction in Texas as a result of this award.

If you are aware of the announcement of a pipeline construction moratorium in Texas, please provide a link to that news.

Having to pay the landowner about 1% of the total cost of pipeline construction seems neither excessive. nor debilitating ... or an expense that would suddenly make the costs of a pipeline prohibitive. 1% of the total cost of pipeline construction is in the realm of round off error. A project that would come within 1% of budget would be considered a success for most.

 

RE: "it was amazing to all concerned that the appraiser got away with his speculation on devaluation."

Again, a bit of hyperbole. I doubt that the Donnells (and many others) were amazed; pleased, but not amazed.

I doubt that many reading this are amazed; pleased, but not amazed.

I also expect that some reading this will consider that $1.77 per inch-foot was a too low.

 

I expect that the appraiser got away with his speculation on devaluation due to the fact that the pipeline company were unable to convincing dispute that valuation.

 

All MHO,

                 JS

 

 

Permalink Reply by Michael Allen on April 7, 2013 at 3:27pm

You missed the point. It wasn't the value for the pipeline easement itself that was the issue, it was the damages to the remainder that's in question. That's the problem.

Permalink Reply by Jack Straw on April 7, 2013 at 3:42pm

You seem to have missed the point.

It wasn't the value for the land under the pipeline easement alone that was the issue, it was the damages to the remainder of the property that the jury took into consideration. I applaud the jury's wisdom in rendering their judgment.

It is naïve to believe that a pipeline has no impact upon adjoining property that is bisected by a pipeline.

I for one have no great problem with the jury system; not perfect, but I will take a "jury of my peers" over a tribunal.

 

I am still waiting reference to where there is currently a pipeline construction moratorium in Texas as a result of this judgment.

 

All IMHO,

                 JS

 

Permalink Reply by Michael Allen on April 8, 2013 at 2:11am

Sorry, but if there is a perceived devaluation in property values due to a pipeline right of way, the prices being paid on a per/acre basis more than make up for any "damages". I'll bet when you sell your property you won't discount it 50% because there is a pipeline easement across your property, you will ask the going rate no matter what that value is per acre. That's the point.

Permalink Reply by Jack Straw on April 8, 2013 at 6:59am

RE: " I'll bet when you sell your property you won't discount it 50% because there is a pipeline easement across your property"

There will be a portion of my property adjacent to the pipelines that would be discounted at 50% to portions distant from the pipeline.

The pipeline company has (through eminent domain twice widened their ROW for the insdtallation of two additional pipelines).

The property adjacent to the current right of way is perpetually at risk for being taken for additional pipelines and/or for temporary construction easement for replacement or repair.

The influence of the pipelines will diminish with distance and impact.

The Texas jury awarded the Donnells only a 10% depreciation of their property due to the confiscation of their property for the pipeline easement.

The jury award to the Donnells was influenced by the sworn testimony of a licensed appraiser; testimony that it would appear the pipeline company were unable to convincing dispute.

 

I am still waiting reference to where there is currently a pipeline construction moratorium in Texas as a result of this judgment.

 

All IMHO,

                 JS

Permalink Reply by Michael Allen on April 8, 2013 at 7:28am

The case has not been accepted by the Texas Supreme Court yet, so we'll have to wait and see how it unfolds. As far as the award goes and acceptance of the landowner's appraiser, how else would you expect a local jury to decide, for the local landowner or the lyin',  rich, fat, horrible pipeline company?

 

As far as your land having multiple pipelines across your property, I hear arguments both ways almost every day. The landowner that has no pipelines asks why I don't put the pipeline on someone that already has a pipeline corridor and leave him alone. The landowner with pipelines asks why I don't pick on someone else. Never ends.

Permalink Reply by mark on May 14, 2013 at 2:03am

 HI GUYS AND GALS  haven't visited this post for a while and a question just popped into my head where can you get information on whether a pipeline or mid-stream company as it were HAS the power of condemnation??? seems like you would play into there hand if you asked or am I just being paranoid about the issue? thanks people for any and all responses                 mark

Permalink Reply by James Brink, Esq. on May 14, 2013 at 2:12am

Generally, the power of condemnation is limited to public utilities, which includes interstate pipelines.  A local, or midstream, gathering system is not usually regarded as a public utility.  I have had many calls from landowners asking this question because the midstreamers are telling them that if they don't sign, they will condemn. 

Permalink Reply by Michael Allen on May 14, 2013 at 2:17am

The main distinction is if the pipeline is owned by the same company that is transporting their own material, then it generally does not have the right of eminent domain. There is also normally a state by state determination as to what company may be approved as a "utility", a water company for example. The main issue is whether or not the pipeline serves the public at large and is for the public good. A pipeline that has eminent domain has to go through some hoops to prove they only own the pipe and not the material being transported. Intrastate (within the same state boundary) pipelines must be approved by a state appointed board of some sort unless they have already been approved as a utility. A gathering pipeline that takes liquids or gas from a well for a lease company and a private landowner, does not usually comply with the power of eminent domain. Once that product is refined into public usable and needed products, it goes into a "transmission" or "common carrier" pipeline that serves the public. That pipeline usually obtains the condemnation power. Interstate (crosses state boundary into another state) is regulated by federal DOT regulations for liquid products and FERC (Federal Energy Regulatory Commission) for all natural gas under the Natural Gas Act. They must obtain a FERC certificate either by giving up their eminent domain power( under this scenario the FERC grants an immediate certificate) or by going through the NEPA process for a certificate of need and necessity(this usually takes a minimum of 2 years and usually 3 to obtain a certificate). A company must also prove there is a public need by having an "open season" to have other companies that may want to use the proposed pipeline and it is also based upon future demand, market prices, through-put charges, and a whole host of other stipulations. A long and expensive process. Liquid pipelines usually don't have to go through as much red tape as does a high pressure natural gas pipeline to get their permit, but the Keystone XL is an opposite example of politics over process.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on May 14, 2013 at 10:20am

I'm glad to hear you say that you have a question since you haven't been here for awhile, mark.

Many times in our 'busy walk of life', we 'forget' in the MIDDLE of all of the other clutter about something we had once thought of. Often, matters that was once 'front & center' take a back row seat. MANY times, we never 'get back to it'. We just 'move on' & unfortunately NEVER get back to what we once INTENDED to address.*It is good to have 'depth perception' - even concerning 'G/O situations' (*especially in G/O perceptions...).

It is much like visiting a museum to view various artwork. When people tend to get 'right up on a work of art'...when it is truly best to go view it from around 8-12' away (depending on the painting size of course)...and even from different 'angles'. They do this with everything, whether it be a painting, a sculpture, or gardens.

Back to re-visiting a G/O discussion'...you have Bob Jenness to 'blame' for it. In my attempting to aid him with some of his G/O endeavors...and forwarded some of the discussions that I thought he should look into, such as this one - then they wouldn't have come again to everyone's attention. Below is his discussion - if there is anything that YOU can aid HIM with, please do so.

How Will We Know a FAIR Oil and Gas Lease When We See It/Them? - Go...  *Anyway, glad to here that this is also helping others...it's hard when you're running around, busy with YOUR universe...to 'keep up' with EVERYTHING in general...glad to be of help.

As one light lights anothe, nor grows less - so nobleness enkindles nobleness...wm3s (...walk a million miles in my shoes), ngu (never give up)

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