Pipeline Easements

Easement agreements are formal legal agreements granting the pipeline operator long-term use of a right-of-way. A change in ownership of the property does not alter the easement agreement. Because easement agreements are legally binding contracts, landowners should have the contract reviewed by an attorney before signing . Many aspects of a pipeline easement are negotiable. The landowner should consider any contract offered  to be a starting point for a two-way negotiation, or it can be fully accepted or rejected by the landowner.

Following is a list of some  considerations that should be included in a pipeline agreement or addressed with an addendum:

  • Establish the width of the permanent easement and time line for completion of construction.
  • Define the nature and width of the temporary construction easement.
  • Require identification of any independent and sub-contractors that the pipeline company will use and make the pipeline company responsible and liable for all acts on your property by independent and sub-contractors.
  • Require the pipeline company to indemnify (not hold legally liable) the landowner from the acts and omissions of the independent and sub-contractors.
  • Define and limit access to both permanent and temporary easements.
  • Specify payments for trees, crops, and other plants damaged during the installation of the pipeline.
  • Specify re-seeding requirements of easements, such as the types of grasses and other improvements.
  • State the amount of time following completion of construction for surface restoration to be completed.
  • Identify all stream crossings, state methods of stream crossings, and require restoration of stream crossings after construction.
  • Require the landowner be provided an “as constructed” survey of the easement with an official seal      by the surveyor within a stated period of time following completion of construction.
  • Specify replacement or installation of fencing and gates, stating which gates will have locks and nature of the locks.
  • Limit number of keys or number of persons with lock combinations.
  • Identify the named person at the pipeline company who will be the landowner’s contact. Require the pipeline company to give 30 days prior notice to landowner of any change in contact person or contact information.
  • Define access post-construction to the easement with specific method and location of all  access roads and methods.
  • Prohibit or limit surface accessories to the pipeline.
  • Require minimum depth to top of buried pipeline and require that this minimum depth be maintained at all times.
  • Terminate the lease by stated number of days of no use of the pipeline.
  • Define “abandonment” of the pipeline as a termination of easement event and require the pipeline company to remove all abandoned pipeline.
  • Require prior landowner consent for any assignment of the easement to another party.
  • Limit the easement to one pipeline of a stated diameter, with no right to install additional pipelines and no right to increase the diameter of the pipeline.
  • Require the same      post-construction restoration of surface for pipeline repairs as for original construction.
  • Reserve the right to seek surface damages for pipeline repairs as for the initial installation.
  • Confirm whether gas to be transported will be scented or unscented.
  • Ensure that the permanent and temporary easements are by metes and bounds descriptions and with official surveys – pre-construction and post-construction (as-built survey).
  • Choose an alternative dispute resolution method that makes it the cheapest, quickest, and least burdensome way to resolve conflicts between landowner and the pipeline      company.
  • Consider what surface uses by the landowner will be prohibited, if any, on the easement.

Payments to landowners for granting right of way easements can be quite variable between pipeline operators and from location to location. Most payments involve a set dollar amount per linear foot (or per ‘rod’ which is 16.5 feet). Historically,  easement agreements have ranged from less than $5.00 per linear foot to more than $25.00 per linear foot.

There is a post on GMS indicating a current offer of $50 per linear foot.

Some pipeline operators will also offer a ‘signing bonus’ (a fixed dollar amount for signing an easement agreement) in addition to the payment per linear foot. The amount and terms of payments need to be in writing before signing an easement agreement.

 

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Replies to This Discussion

Permalink Reply by Dan on December 5, 2011 at 1:41pm
I think this is an important discussion to have, Al. Similar to the gas company landmen, the pipeline reps are going to try to propose agreements that benefit them. The list Al includes above are all great points to consider. A transmission pipeline easment could easily outlast any well drilling activity on your property (a few decades) so it is really important to make sure that we protect the integrity of our land. If anyone has an example of a landowner-friendly pipeline lease they could post, that could be helpful.
Permalink Reply by Al Cramblett on December 5, 2011 at 3:15pm

Further info to include a lease is available at the following website:

http://www.pstrust.org/pipeinfo/landowners.htm

Permalink Reply by Kristie on December 5, 2011 at 3:30pm

Al and Dan: my thoughts exactly and coming from two well known names( and very well respected) on the Harrison Co GMS website. Glad Al posted first so we can reference his post and build upon easily as Harrison Co moves towards the next stage of production. Question? What if you are a landowner who does not own your G/O rights but own the surface how does this subject come into play? Also do the laws change when property owners live on a state route?

Permalink Reply by Dan on December 5, 2011 at 3:46pm

I know that for the 8" connector line that Chesapeake commissioned Dominion to put in from the Buell Well to a transission line 3 miles away, they stayed in County and Township right-of-way (basically in the ditch line of the roads) and did not have to sign agreements or negotiate at all with the landowners that they passed in front of.  They just coordinated it with the County and Township officials, and I assume with State Officials since they tunneled it under State Route 9.  Somewhere along the way I have heard that this was questionable legally - in other words they should have gotten easement agreements and crossed peoples properties since this line was not a true public utility like a sewer or water line.  But it sure saved them a lot of negotiating, paperwork, money, and time!  I must say that Dominion did a decent restoration job, and I'm pretty sure the County and Township crews were reimbursed for their time and materials for what they had to do to repair the roads after the installation.  Still though, was it legal to do it that way?  Does anybody care?  I'm not sure what I think about it, but I would like to know what the legalities are.

Permalink Reply by AT on December 12, 2011 at 4:28pm

 I spoke with a fellow in Belmont county this past weekend who lead a large landowner group signing with XTO (Exxon). I'm not sure how it works when they follow an existing pipeline, however, with regards to compensation he indicated you should be able to get $125.00 per linear foot for a pipeline traveling across your property and that one shouldn't settle for anything less.

Permalink Reply by Josh on December 13, 2011 at 3:38am

Just spoke with my neighbor and he met with sixteen men from a pipeline company(Enterprise) who are surveying for future pipeline project. I was told that it is supposed to follow existing pipeline (teppco). Potential opportunity to be compensated for this future easment. Have not heard any concrete numbers, this could be just as important as mineral rights. Once pipelines are in the ground I believe they are there forever. Atleast I think so...Will try to find out more info and post it.

Permalink Reply by scott jackovitch on December 14, 2011 at 12:29am

Josh I understand that when they surveyed the property you are referring to they surveyed a lot more than just the pipeline. I heard that the entire farm was surveyed and all property corners and lines were marked. Have you heard the same ? It seems like a lot of additional work for a pipeline easment .

 

Permalink Reply by Josh on December 14, 2011 at 1:14am

Scott, you are correct they surveyed his entire property as well as pipeline.

Permalink Reply by scott jackovitch on December 14, 2011 at 9:43am

I understand they are planning on upgrading the old haul road along the back of the property. That will be quite a big job in itself. Lots of trucks and lots of stone. It will be good to see all the people working in the area.  I wonder how wide the road will be ?  How wide are the access roads normally at well sites or pipeline facilities ?

Permalink Reply by Dan on December 14, 2011 at 3:07am

People in other parts of the shale play are discussing these issues too.

Brooke County, WV (from December 2011)

Sullivan County, PA (from May, 2011)

 

 

Permalink Reply by Dan on December 14, 2011 at 3:20am

Does anyone know the issues with these pipelines and eminent domain?  When can the pipeline companies force you to allow a pipeline?  I believe lines can be private or public. I have read that if a pipeline company is granted "Public Utility" status, or if they are laying an interstate line, then they have to right to claim eminent domain.  Having E.D. capability obviously puts a big negotiating tool in the favor of the pipeline company.

Permalink Reply by Josh on December 14, 2011 at 2:57pm

I understand where you are going.  I know these pipeline companies have a timeline to keep so I don't expect alot of friction from individual landowners along the way.  I still heard that landowners will be compensated.  I don't think these companies will be constucting these pipelines in stages in which landowners agree to terms.  Once they start I can't imagine skipping over people who have not reached agreements with these pipeline comps.  Personally I worked on my lease for over a year before signing, I just don't think there will be that much time.  My two cents...

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