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

Permalink Reply by jeff on February 19, 2013 at 5:35pm

Couldn't the ROW agreement be worded so as to terminate the ROW when the well(s) cease production?

Permalink Reply by Mark McGrail on February 19, 2013 at 10:27pm

jeff,

That could be a point for negotiation. Much also depends on what type of line is it a gathering line or a transmission line ? Even then I doubt the company would agree.

Permalink Reply by James Brink, Esq. on February 21, 2013 at 3:53pm

Another good point, Mark.  I, too, doubt that in today's environment any production company would agree to such terms.  But, what if those were the only terms on the table?  And,what if the landowners surrounding the production site made similar demands.  We can agree that the operators can't airlift the gas out.  No pipeline means no production.  We deal with this issue on a daily basis.  However, at the end of the day, when someone needs money now to cover a current obligation,  they sign the traditional ROW, use the money today, and hope that tomorrow will be alright.

Permalink Reply by Kriste Sayel on February 19, 2013 at 7:47pm

One of the drawbacks of all these contracts is having to pay and trust an attorney. My experience is that I could be happier regarding my dealings with the attorney who handled our property lease agreement. Could be happier. In retrospect, seemed he was kind of "in bed" with CHK. I'm sure I'm not the only one who feels like this. Having been contacted re a pipeline, I realized I do not relish the idea of dealing with an attorney again... this is why self-education is necessary and this site is valuable. Thanks to everyone who shares information here. 

Permalink Reply by Mark McGrail on February 19, 2013 at 10:25pm

Kristen,

Even, with education will ever really know you've done the right thing.

There are people who are well versed in all of this that will assist.

I suppose that is why Ron offers his services as a land manager.

Permalink Reply by James Brink, Esq. on February 21, 2013 at 3:59pm

Karen:  Sharing information is important.  An educated landowner is a good thing.  Hiring an honest and knowledgeable attorney is another.  In this "gas rush" era many attorneys, sad to say, have become overnight experts.  They might attend a seminar, do a little reading, then hold themselves out as oil and gas attorneys.  The standard ROW agreement has been used with little change for over 100 years.  Unfortunately, many attorneys will read the agreement and pronounce it to be acceptable without actually having the working knowledge about how the ROW really works in the real world.  As Mark noted above, for all intents and for all purposes, the ROW is a perpetual easement, which means it is forever.  Frankly, there are many landmen unhappy with me.  They are sent out to obtain a ROW and return to the office empty handed.  But, if the landowner is comfortable with the decision that they made, then I return to my office happy.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on May 18, 2013 at 7:09am

Frank - I see part of 'the rub' the guys have for you...you do NOT using attorneys. You don't say that it's not a good thing to talk to any...just that you don't HAVE to go that route...that the burr under their saddles...

As one light lights another, nor grows less - so nobleness enkindles nobleness.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on February 19, 2013 at 11:26pm

Texans say, "Wells are TEMPORARY, but PIPELINES are FOREVER."

Think about that. As one light lights another, nor grows less - so nobleness enkindles nobleness. He who stands firm.

***LOOK at Fang's discussion on PIPELINES & you'll gain allot....*THIS 'matters matter'.

Permalink Reply by James Brink, Esq. on February 21, 2013 at 3:59pm

RIght on, Fang.  Could not agree with you more.

Permalink Reply by James Brink, Esq. on February 21, 2013 at 7:42pm

And the results were not as good as cousin Vinnie got either I am sure.  This is a very technical area where words have specific meanings and should not be subject to conjecture.  The bottom line is that an easement is a permanent, recordable encumbrance against the land.  Period.  Heck, I have seen cases where the ROW continues to be effective even when the molecules stop running.  There is no obligation to remove an unused pipe in the "traditional" ROW agreement.  Maybe "tradition" should be traded up to something more modern.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on February 21, 2013 at 10:17pm

Fang, I know that this 'world' has become a 'politically correct' environment, but I detected NO such 'demeaning' attitude within your comment ***concerning 'attorneys'*** - none whatsoever. I think that I understand that YOU are a bit more 'connected' into this whole 'g/o dance' that what I can understand.  ***G/O is a SLIPPERY SLOPE to endeavor on. It's HARD to 'climb a greased rope'.

Know that I do understand ALL of the things that you have written - and it IS true, people (LANDOWNERS) DO need to READ for themselves - BUT there ARE just too many twists & turns (EVEN for the most experienced lawyer...). Things are ALWAYS changing & NEVER 'staying the same'.

Look at THIS development of the SHALE formations...what has changed (*the developed manner of extraction), what has 'stayed the same' (same nat'l gas, wet gas, & oil...).

It's funny - you don't hear of Arm N. Hammer (OXY) mentioned much, but he IS the one responsible for ANYONE's delving into this marvelous adventure. Good Russian man - became an AmeriCAN...and he DID. NOW LOOK at what has transpired!

--------------------------------------/ ANYWAY - the main thing I am intending to impart to you is this - that I DO thank you for ALL writings that you share - I read them.... And I in NO WAY mean ANY disrespect to you & hope that you don't get TOO 'horsewhipped' by these gnats - of whom I'm sure respect you & look up to you (as they should.).

AGAIN, NO disrespect, BUT I WILL always be true to myself - always have been, always will be, til the day I die (whenever God deems that to be...). ***Just so you know - on 'my' many  'antagonists' on the GMS, I actually HAVE read. I take the 'bits & peices'...all information IS good information. So, all is WELL. I, too, only want the BEST for all AMERICAN's.

***Right is right & Wrong is wrong. Very poignant concept, & not at all 'hard to grasp'!

Permalink Reply by James Brink, Esq. on February 21, 2013 at 3:28pm

Good point, Mark.  But the real question is:  Why would anybody encumber their land forever in exchange for peanuts?  I realize that times are tough and every little bit helps, but the folks have to make an informed decision knowing that their decision will affect the future use and enjoyment of their land and, perhaps, even the future marketability of the property. A real estate appraiser posted an eye opening account elsewhere on GMS about a farmer who granted a ROW when his land was used as a cornfield.  Years later, after a highway interchange was built nearby, a commercial developer passed on his land because of the perpetual easement.  Could the farmer have foreseen the construction of the highway?  Probably not.  Was there more that the farmer could have done in granting the ROW?  As long as it was not condemned by an interstate pipeline operator, the answer is yes.

 

We tell our clients that there are strategies that can be used to attempt to negotiate a ROW without ruining the future of the land.  However, we also tell our clients not to fall for the "get rich quick" gimmicks that will be employed by the operators to take their land.  However, sadly, at the end of the day the decision will always fall on the landowners and the final decision will always be economic.  Until the folks start pushing back a little at the ROW landmen, the status quo will remain the status quo.

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