Pipeline Right of Way proposal from Cheif headed straight for game land #13.

Two weeks ago we were contacted by Cheif's landman bearing a pipeline easement proposal.  The language was scanty and the landman refused to define the proposed route with a survey and legal description citing that Cheif did not yet have the many landowners in place, so they were unable to be certain of their route.

 

Cheif desires a ROW across 5500 ft of our northern lands that border Game Land #13 in Sullivan Co.  They want a 60' width that will shrink to 30' of permanently maintained pipeline easement.  I cannot recall, and the paperwork does not indicate, the width of the 2 pipelines that will run through this easement.  I seem to recall one was to be 12".  The landman stated that Cheif wishes to run parallel to the Game Lands along the ridge so they can avoid dealing with the Game Commission.  The problem with this story is our lands border the Game Lands to the north and to the east.  The proposed line drawn on a google image shows it exiting our eastern border onto State Game Land #13.  When I challenged him the landman stated he did not know that the adjacent parcel was Game Land #13.

 

The map we were shown indicated that this pipeline came under rt 42 and ran north, then jogged east to cross our lands just south of Game Land #13.  It may run into the large line that will run along rt 220 once it goes beneath 42.   It appears so, but the map was limited to our immediate area.

 

For the moment we are unmoved to action.  Our intent is to demand a survey and legal description of their proposed pipeline, then take it to our attorney for revisions.

 

I have 3 main questions:

 

1.  Cheif is offering $12/linear foot.  If they do indeed wish to avoid the Game Commission, is our 5500 ft worth more than 12/linear foot?

2.  Are gas companies now permitted to drill on Game Lands?  I know they drill state forest lands, but game lands?  Are wells & pipelines placed throughout the lands or just on the periphery?  I have heard they wish to drill on private lands bordering the Game Lands so as not to disturb the surface of the Game Lands.

3.  We are leased with Chespeake.  Can we even grant an easement to Cheif?

 

WAIT!  Sorry, there is a question #4:  WHAT THE HECK WOULD YOU DO?   Thanks!

 

 

 

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Permalink Reply by bill h on May 1, 2011 at 1:11pm
They can drill on gamelands, but they'll do almost anything not to.  If you read the state lease for those gamelands, it' HIGHLY restrictive, to the point of making drilling almost impossible.  Also the state bonus is much higher than what the typical landowner would likely get.
Permalink Reply by Laurel on May 1, 2011 at 1:15pm

Interesting, Bill.  Without going to much effort can you point me to where I may review the game land lease?  Thank you.

 

So.... shall I conclude our lands bordering the game lands are quite desirable to the gas guys?  Why would their proposed pipeline route run off of our lands straight into the game lands?

Permalink Reply by bill h on May 1, 2011 at 3:02pm

its been a while ... try searching on "state gamelands lease" or something like that ...

we don't border gamelands, but the well-site does.   as soon as the guy next to the gamelands signed, we were off to the races

Permalink Reply by JamesG on May 1, 2011 at 1:56pm

A pipeline is a tough decision. First, $12/ft is low, numbers like $20/ft are common in SW Pa.  Secondly, you should get additional payments in the future if additional lines are added. 

The proximity of gas lines to structures can be an issue.  There is a term PIR, Potential Impact Radius which is determined by pipe diameter, operating pressure, and frequency of inspection. Typical radius of 600 feet.  This is an area where if the pipe ruptures there is damage.  Not the best situation for a barn or house you live in or for future sale.

The easement is a one time payment which you pay taxes on.  You get to pay future property taxes and walk across the easement forever.  Hopefully the easement does not divide your property or interfere with any future activities like roads, overhead wires etc.  But if it carries your gas and makes your property more attractive for drilling then it may be worth it.  I had to go through this but in the end neighboring properties made it so I did not have to make the decision.

 

I found the Pennsylvania Cooperative extension to be a good starting point to get educated.  They have lots of good information.  Before you sign anything I would make sure you talk to a knowledgable attorney and understand the agreement.

Permalink Reply by Laurel on May 2, 2011 at 1:44pm

Thanks, James, for the PIR information.  That may come into play if these guys decide to drop their line south to where we want to put up a new home.  I suspect they will do just that as running north along the ridge will inevitably run them off our lands onto the game lands.  It is puzzling to me that these gas compnaies are so deceptive in their ploys to get you to lease willy-nilly without any information disclosed on their part.

 

I will absolutely take this to our attorney if anything transpires.  I do not wish to be obstructive, but caution seems in order.  Does anyone know whether Chesapeake, with whom we are leased, may access a line owned by Cheif?

Permalink Reply by Bob Brown on May 6, 2011 at 4:35am

Question #1

Current Chesapeake pipeline leases are based on dollars per disturbed acre, works out to just under 15 dollars a foot.

 

Question #2

Don't know

 

Question #3

Your Chesapeake lease is for the deep mineral rights. The pipeline easements are for surface and just beneath he surface. Yes, you can lease with whomever you wish.

 

Question #4

I'd talk with my neighbors. When the land agent wants to talk with you, get a bunch of your neighbors (who are along the same route, and are most likely also being courted by the land person) invite them all. This way you can get the story straight and make a decision that fits the whole area, not just the gas company.

READ THE LEASE again and again - even if you read that particular paragraph a week earlier. Pin them down with stakes in the ground with specific wording on paper about trees, areas that you can demand not be disturbed. You should demand a specific site map showing the exact route of the pipeline which is part of lease itself as an additional notarized exhibit. Finally, it is imperative that you BE THERE when they begin the work. They're required to give notice when work is about to begin, if you don't see this in the lease agreement, ask for it in writing.

The answer to the question, "Where can a man on a bulldozer go?" is "Anywhere he wants to."

So, be there with lease in hand when they begin.

Good luck.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on May 6, 2011 at 5:46am

very interesting...pls take a look at this Sullivan county discussion on the pipeline offer from Chesapeake just a few months ago....they initially offered 5K per acre then 6500 but with some funny details about payment..they didn't discuss per linear foot and it was a verbal and email offer.  Pls read the discussion and also take a good look at the example pipeline contract where the link is on the first page of discussion (a well done pipeline contract)

http://gomarcellusshale.com/group/sullivancountypa/forum/topics/pip...

Permalink Reply by Laurel on May 10, 2011 at 1:45am

Thanks to all who have taken the time to offer wisdom and information.  VG, I did read the suggested discussion.  Thank you, it was very informative.  What was the result of your negotiations on the proposed line across your lands, or is it still ongoing?

 

Seismic studies are to occur on the lower portion of the property that lies in Lycoming Co. along rt 239.  That appears promising.  The ROW is proposed by Cheif for on the northern acres that lie in Sullivan.  I was recently told 2 things via the gas-grapevine.  The first is that gas companies drill the game lands from adjacent lands held in private ownership.  Anyone know if this is indeed factual?  Secondly, I have also heard it rumored that Cheif is sifting its interests from drilling to laying pipelines supposedly for transportation of the production of any gas company who pennies up to utilitize the line. Again, can anyone confirm this?  Thanks to all who reply.

Permalink Reply by Laurel on May 10, 2011 at 3:18am
We have an attorney, but should we feel inclined to look elsewhere I will keep you in mind.  Thx.
0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on May 10, 2011 at 4:32am

thks Laurel,   glad the discussion helps.  That is why this forum works , it is when we are all interested in helping each other that we find a most meaningful use of our time reading these discussions.

As far as the pipeline situation...that offer was because they really didn't know exactly where they would put the pipeling (sobeit for the low up front and the time to hold the land).    I think they make better offers when they know the route for sure that they will take and of course the willingness of the owners involved to work with them.   I had given them a high number in response as I was insulted at their unreasonable low offer  and actually had some hope that they would that they could come back with a more reasonable offer and talk and perhaps make it work.   When they did not come back with an offer then I really knew that they were not sure that they wanted to go that route for real.  Glad not to waste any more time or worry about it as I spent many hours trying to find out what was involved anyway and no one paid me for that time.   That link at that discussion on page one with a sample contract is well worth looking at.

Much success to you and others here....thanks for sharing!

Permalink Reply by Brian on May 10, 2011 at 2:53pm
Has anyone seen a ROW lease that a company has agreed to that pays an annual amount?  Get an initial upfront payment, and then something that is a lower annual amount?  The line is still there and making them money, why not continue to pay the landowner that the line is crossing.
Permalink Reply by Bob Brown on May 10, 2011 at 3:52pm

Their short answer is "No, we don't do that."

They say they are reimbursing us for the surface disturbance.

Their logic is the same as any more urban area with all manner of utility lines, water, sewer, gas, phone lines, etc.  underground making money for the company, serving the general population, all without annual remuneration.

 

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