what is the going rate for pipeline easements.

Marathon is wanting to cross my land in Harrison county. Just checking on the going rates. 

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Permalink Reply by Janice L. Hancharick on May 23, 2015 at 2:05am

Many points to nail down.  Focus not only on what they're asking now, but also on what the contract allows them to do later.  A lease that must be renewed periodically is a good thing.  They will want the use of your land forever so one price one time is ridiculous.  You'll be paying taxes on the land forever.  Think taxes will go up?

 They will want a strip of specific length and width, but it will take a wider width for them to work in while putting the pipeline in place. Let that be an extra expense for them.  Ask for a maintenance schedule of the surface and pipeline itself ... just so you know.  How wide is the pipe?  Eventually they may want to expand the region's takeaway capacity by adding another pipe above or below the existing one!  That should be another paycheck for you. Specify what will be flowing through the line.

Will your insurance be going up?

I haven't given a number I know, but you now have more to consider.  If your neighbors haven't addressed all these issues, that's on them.  It's your land.

Permalink Reply by clyde vanhoose on May 25, 2015 at 7:37am

Thank you Janice Many good points to think about.

Permalink Reply by Jonathan Blair on May 25, 2015 at 10:05am
What are they offering you at this time?
Permalink Reply by clyde vanhoose on May 26, 2015 at 5:16am

Jonathan Nothing yet I was wanting to get ahead of the game. They just asked for permission to walk my land.

Permalink Reply by Michael Allen on May 26, 2015 at 5:20am

If they are wanting permission to survey, then ask to see their survey permission form with liability protection clause, line of site cutting, closing gates, ATV use, and damages caused by survey activities.

Permalink Reply by Michael Allen on May 26, 2015 at 4:49am

Some of the above from Janice is right and some of her information isn't correct. Having been a Right of Way Supervisor and Agent for 30+ years, I will try and give you some advice.

1) A permanent, perpetual easement is forever unless there is an abandonment clause for non use for a particular period of time. An abandonment in place is a good idea with a 24 months, non use.

2) The taxes on the land should not change due to the presence of a pipeline. The pipeline company will pay an ad valorem tax to the county and/or state, but the use of the land should not change or might go down. The surface use will not change except no permanent improvement within the easement.

3) The pipeline easement comes with a certain width depending on the size of the pipe. Usually up to a 16" diameter pipe will take a 30' easement plus approximately 75' of temporary work space for construction. If the pipeline company wants a "multiple line" easement, then the price per rod/acre/foot should be alot more. Also remember that a pipeline company can not condemn for more than one pipeline. A smarter way to handle this is to demand only a single line easement. A pipe 20" and larger will usually require a 50' wide easement and 100' of temporary work space during construction.

4) Any additional pipelines to be installed parallel by the same pipeline company will be a minimum of 12-15' from the original pipe location. You can get an idea as to whether the pipeline company is planning on another pipe install in the future, by looking at whether the original pipeline is off-set from the edge of the easement rather than in the center. Another good idea is to request an "As-Built" certified drawing of the pipe location after construction and for this drawing to be certified and recorded in your county courthouse. If you have negotiated a single line pipeline easement, then any additional pipelines will require another easement, even if it is placed within the original easement location. This will require another payment to you.

5) It is always better to negotiate in good faith even if you don't want a pipeline, IF the pipeline company has the power of eminent domain. You need to decide what elements of the easement need additional clauses to protect you and you need to figure what dollar amount you are willing to live with. If you go to court remember that you will not get any additional clauses in the easement. The pipeline company will file for condemnation using their standard easment language and the judge will not change it. The only thing that will be determined is how much money you will receive. That will be based upon an appraisal of the property and a certain per cent of the fee value for the easement. In every case where a landowner went to court, the landowner got screwed; the amount of payment was substantially less, plus the landowner had to pay his own attorney fees. A landowner is way better off to settle with the pipeline company.

6) I've never heard of anyone's insurance going up due to the installation of a pipeline. I would suggest a clause naming the landowner as co-insured for liability purposes with the pipeline company required to keep up the policy as long as the pipeline is in service.

7) One more issue to beware of is any clause the pipeline company has that indicates that their easement is "exclusive". In fact the heading of the easement should be "Non-Exclusive Grant of Easement", to further show that the easement is non-exclusive. 

Permalink Reply by Bob Shaw on May 25, 2015 at 11:50am

The Columbia Pipeline initally offered $32/ft for the Leach Xpress, for unlimited number of pipelines in the ROW and pipeline carrying about anything they can push through it. They have offered as high as $52, according to them. My personal opinion is that is below the market price, which I will guess to be above $100/ft, and possibly above $150/ft, for a single line carrying gas or oil. This project is pending a FERC permit, which will give the the power of eminent domain to sieze ROW at a price the court can set. As far as I know, only interstate lines will qualify for FERC permits, so without that FERC permit, the land owner is in a better position to either force a diversion or get desired terms. The thought to keep in mind is that a ROW is forever, and you can never build on that land. I have a ROW on my farm that was purchased in 1943 for $80 by the Federal Government as a defense project, which was about 3 cents a foot. Pipeline has been in service since then, in private sector.

Permalink Reply by Ethan Taylor on May 26, 2015 at 10:00am
Bob...how does one determine the fair/actual market price? We are in the process of negotiating with Columbia Gas (the Leach Xpress pipeline will cross 2+ miles of our property in Perry County, OH) but we've already been told not to expect anything close to $100/ft (let alone $150/ft). We were informed last week (by Columbia Gas) that the final FERC decision/approval won't come for at least another year but we'd like to settle by the end of this summer (maybe sooner), if possible. Are there other advantages/disadvantages to waiting to negotiate/settle with Columbia Gas? Is there any way to find out what other landowners are receiving? Thanks!
Permalink Reply by Michael Allen on May 26, 2015 at 11:07am

Once the pipeline company gets their FERC certificate, the negotiations will go very fast and any offers on the table along with any language changes in the easement should be concluded as soon as possible. Reason being that the pipeline company will have a big hammer with a FERC certificate and will immediately give the landowner a final offer. If the final offer is not accepted, then the company will hire an appraiser to determine the fee value per acre of the property. The new final offer will be for around 75% of the fee value per acre. Not by the foot and not by the rod, but by the acre based upon the value of the property. I can tell you that this offer will be way less than the original offer(s) made. Also, the company will go through Federal court and not local or state court and a judge will decide, not a jury. If you go to court, you will not get any changes in the easement document, just the standard pipeline language drawn up by the company. The bottom line is that you should do your best to negotiate in a firm but fair manner. The price per foot is based upon the current "going rate" but there are 2 different types of pipelines. One is a "non-eminent domain" situation and are usually well gathering lines. These pipelines will pay whatever it takes to go across properties and this amounts to an inflated figure. The other pipeline is an eminent domain type pipeline and that price can be all over the board depending on the company. Normally, the more you change the document, the less you receive, especially if your attorney gets involved and has to work with the company attorney. I am certainly a fan of one attorney or firm representing a group of landowners and that way, the attorney cost is split among the group and all agree with the end result of the final document and price. That's your best bet, IMHO.

Permalink Reply by R on May 26, 2015 at 11:30am
Permalink Reply by Michael Allen on May 26, 2015 at 11:36am

If it is a natural gas pipeline and it crosses state lines, interstate pipeline, then it is regulated by FERC. If it is an intrastate pipeline and does not cross a state line, then it must comply with state regs and statutes which define a utility and it's ability to condemn. Same holds true with liquids, only it's DOT regulated if interstate, not FERC.

Permalink Reply by Bob Shaw on May 26, 2015 at 5:40pm

Columbia has offered as much as $52/ft for any number of lines with no abandonment and has acquired 22% of Ohio ROW at or below that price as of 4/10/2015. Michael Allen seems to be quite confident in a pessimistic outcome and has a formula that is well below current Columbia offers, so he must know something that other landowner advocates have not yet discovered, or are withholding from their clients. If you are persuaded by his perspective, you should accept the current Columbia offer before it gets any lower. BTW, all of the Columbia offers are in acres and not feet, but are generally translated to feet as a common basis of comparison in these forums. My information is that ROW has gone for $450/ft for a non-FERC three line deal recently in rural Ohio, and several other instances of single line deals just below $200/ft. The higher price was a special circumstance, but it does establish a higher end of the range that is reality based. I am not motivated to have another pipeline on the farm, so I am willing to let it go around if it makes sense for Columbia to do that rather than accept court costs or pay what I understand to be a fair price. If you are looking at 10,000 feet of $32/ft, that may be the deal you have to accept to get paid this year. I might change my tune when Columbia hits 70% ROW acquisition by September and prices are still under $52. For perspective, by March 10, 13% had been acq at $32 or under, April 10, 22% for $52 or under. If it continued at half that rate, we will be at $100 by Sept.

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