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 Dan Brockett on February 26, 2013 at 4:14am

6:30 - 8:30 PM at the Coolsprings Twp building. It cost $10. Call the Mercer office to register 724-662-3141

Permalink Reply by James Brink, Esq. on February 26, 2013 at 2:25am

Right on.  As a point in reference, I had a long discussion with a spec seismic operator who wants to conduct a 3d array on our clients' land, who are unleased.  The compensation is $5.00/acre.  When I pressed the operator over the supposed benefits of the seismic testing, he responded with the company line that one's land is more valuable to the gas operators when there is seismic.  While this may be true, why shouldn't the landowner receive more than just nominal consideration?  Why is the landowner always asked to give, give, and give some more just to benefit the operators?  True, without operators, there would be no production.  But without land, there would be no operators.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on February 26, 2013 at 5:02am

You know, James - have a funny 'analogy' for agreeing to ANY 'SEISMIC TESTING' on anyone's property...it's like a gal wearing a skirt...then holding up her skirt - and you 'get to see her panties'...WHY would ANYONE want to 'give' the G/O Co. 'ammunition' to either 'give you a better lease' OR to NOT give a lease BECAUSE they 'found out' (DUE to the 'SEISMIC TESTING' that it just won't be worth THEIR 'time, money, & energy'?!).

Just don't do it. Let THEM PAY you first, THEN also have written into an addendum that when/IF any 'seismic testing' is to be done - that you STILL get compensated... There's GOT to be other things involved, I just haven't thought this one out WELL enough, yet...except for NOT 'showing your panties...'. *OH, IF they 'find' a potential 'sweet spot' that was unknown before, also an addendum to INCREASE the ROYALTY PERCENTAGE?...FOLLOW the MONEY (THEY DO! - SO SHOULD YOU!!!).

As one light lights another, nor grows less - so nobleness enkindles nobleness. The Russians have a saying about 'throwing salt' over the shoulder...another about - you scratch my back, I'll scratch yours?...hmmm.

Permalink Reply by Roger Pyle on February 26, 2013 at 6:08am
Permalink Reply by Michael Allen on February 26, 2013 at 3:25pm

Pipeline ROW doesn't have to be forever unless the pipeline company has the right of eminent domain (condemnation), and even then one can custom the wording to only include the exact product (liquids, natural gas, NGL's, etc), so if the product changes, it takes a new easement. On any gathering pipeline that does not have common carrier designation and does not have condemnation rights, a landowner would be foolish to grant anything but a lease, not an easement. The lease should have a decent term from 10-25 years with no clause for additional pipes and no clause allowing an increase or decrease of the pipe size. Having been on the "company" side for 30 years, I know what one can negotiate and what not to have in a non-eminent domain pipeline easement. In addition, all roads and temporary work space associated with a gathering system is subject to negotiation on an annual basis. Even non-eminent domain easements can be negotiated on an annual payment, however, know that the payment for an annual is way less than a one-time payment, averaged over a period of time with a cost-of-living increase and a minimum % raise each year. There are many ways to skin that cat without getting screwed if you know what to ask for.

 

Pipeline Pappy

Permalink Reply by Roger Pyle on February 26, 2013 at 3:31pm

I wish you had been around 30 years ago.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on February 26, 2013 at 5:30pm

SEE? - Rodger, do YOU feel that the 'seller' of YOUR 'land lease' did NOT disclose all information - concerning YOUR 'partnership' in YOUR LAND?...just curious?

Right is Right & wrong is WRONG. AMERICA.

Permalink Reply by Roger Pyle on February 27, 2013 at 2:18am

Thirty years ago they came by and said "Sign here" and we didn't know we could ask for anything different.

Permalink Reply by Michael Allen on February 27, 2013 at 2:23am

Most courts have ruled against O&G companies on those old easement documents, especially those that do not have a defined easement width or use the term "pipelines" without description. Depending on the language, it may be worth a shot at court to at least make the agreement more chewable.

 

Pipeline Pappy

Permalink Reply by Greg Smith on February 27, 2013 at 1:00am

Great to know! Would you post an example of the best easement/lease, specific language for specific clauses, etc. that would be best for Landowners?

Permalink Reply by Michael Allen on February 27, 2013 at 2:43am

Well, that's a loaded question; what's best for one landowner may not be the best for another. Whether the agreement is an easement, lease, option agreement, access, storage area, staging area, etc all comes into play. Maybe someone should start a thread revolving around special clauses under seperate categories. I assume most all of you are using an attorney, if not, you should. Even lawyers that are unfamiliar with O&G can keep you out of trouble. In other areas of the country, a group of landowners will contract with an attorney so it doesn't cost as much for the individual.

 

Pipeline Pappy

Permalink Reply by Ted Croft on February 28, 2013 at 10:33am

http://eaglefordforum.com/profiles/blogs/natural-gas-pipeline-easem...

Try this link to see what a good base to start from would look like.

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