The right of way agreement -- Part 1

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In today's environment many land owners have been contacted by pipeline companies to cross their properties. If the pipeline company has the right of eminent domain, then they hold the ultimate trump card. Eminent Domain allows the pipeline company to condemn the land owners property by action of Law.

Pipeline companies do not like to exercise that authority, because it is very expensive and creates ill will with the public at large. However if the land owner is being unreasonable or unwilling to execute a right of way agreement then the pipeline company will be forced to commence the condemnation process.


The following items are part of my right of way checklist.

1. Recitation of consideration to lay single pipeline to not exceed a specific diameter.


2. Define the operations and conditions the grant. For example would be to lay, construct, maintain, replace, remove and operate a single pipeline for the transportation of a designated product.


3. A full and complete description of the lands.


4, Define the diameter of the line. Define the width of the permanent easement. Define the width and location of any work or temporary easement(s).


5. Provide for the termination of the easement upon certain conditions being met.


6. Provide specifically what rights are not granted with the easement, such as hunting, fishing, roads, mineral rights, etc.


7. Ensure that the agreement allows the landowner to fully use and enjoy his property.


8. Define the items that the pipeline company will repair or replace, or compensate if damaged. If above ground facilities are required, then negotiate a separate agreement.

10. Require the double ditching method of laying the line and disposal of rocks greater than a certain diameter (such as 3 or 4 inches).


11. Require that the pipeline be laid and maintained to a certain depth below the surface, such as a minimum of 48 inches from the surface of the ground to the top of the pipeline.

Stay tuned for Part 2.

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Although the pipeline company may not like having to go the eminent domain, that does not mean that they will not mention it in the first phone conversation. Don't let them rattle you.

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Buddy, my O&G attorney must be good - he mentioned everything you have there & some more. By the way, what is 'double ditching' ?

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Dear Go-Fast,

I do have a few more to come. Well, lots actually.

Double ditching is used to describe moving the soil so that when replaced, the top soil is on the top and the bottom soil is on the bottom. If they are mixed, you are mixing up the topsoil and reducing its crop carrying capacity.

Buddy

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What is the payment per rod to the land owner usually?

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Dear Mr Guinn

That number varies significantly from area to area, the type and use of the pipeline, whether the pipeline company has eminent domain rights, etc

Where (county/parish - state) is your surface located?

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What's the current going rate per foot on pipelines. Kinder Morgan want to put pipeline on my ranch?

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If the pipeline company has an eminent domain rights,then they have that authority to take away our [url=http://www.kevinbradleyrealtor.com/]vacant land/url] for laying the pipeline or may be it depend upon the locality.

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Buddy,

Am interested in part 2 of this. I have been researching this in great depth. I have a 42" high pressure line in proposal for my property. Trying to educate myself in anticipation of a visit from the company landman.

RJ in PA

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Buddy,

Have you provided part 2 for the negotiation info? I have a proposed 42" high pressure gas line in PA to come through my property. Was ignorant to the process and let them survey my property. They do have right of Eminent Domain and I am trying to research as much as I can based on what I would be losing. You part 2 would be helpful if you have a link to it you could send me. The landman hasn't knocked on the door yet but its coming. Trying to get an agreement together itemizing my terms knowing their limited.

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Mr. Cotton, our family is in the beginning stages for the Plains/Delek Caddo pipeline from Cushing, OK.... to Longview, Texas to Shreveport, La. (12" high pressure oil pipeline) Our family easement agreement has all of you suggestions plus a few others... thank you... very helpful! We've received an offer package with a marginal easement agreement and very low price per rod ($225/rod) with damages rolled in. It appears that way. Does your formula (pipeline size times $2) still apply. I've researched prices per rod to vary between $600 and $1,800/rod. What sort of prices are you hearing. Here's the Tyler Paper article on the new pipeline. http://www.tylerpaper.com/TP-Business/216650/new-100m-pipeline-to-haul-oil-from-longview-to-shreveport

thanks for your help.

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Dear Mr. Hodges,

I have been receiving at least $2.00 per inch foot and in some cases over $2.50 per inch foot. It may be that the $2.00 figure is now a multiplier and not a ceiling.

As to the easement suggestions, I never continued this post past part 1. Eric Camp posted a great checklist that encompassed pretty much the balance of what I was going to include.

Most of the damage occurs when the first line is laid in a pipeline corridor. I have had some experience dealing with Plains and the group that I dealt with was in charge of their Cushing to Memphis, TN (Plains All American) line.

So much depends on not the appraised value of the land (which is what they want you to believe), but the value of the property at its highest and best use.

Best,

Buddy Cotten

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Mr. Cotton,

Thanks for your response. Advice is very helpful. jhh

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Mr. Cotton,

Based on your comments below (very Helpful....Thanks), if the pipeline has the right of eminent domain and their proposal is a marginal easement agreement with a very low price per acre, 20K per acre, what are your thoughts on the land owner proceeding to eminent domain? Although costly The value of the property at its highest and best use would be determined and the courts would limit the landowners exposure. Knowing the ideal situation is to finalize an agreement in the negotiation stage for both parties.

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Dear Ryan,

Looking at your profile, I see that your lands are in Pennsylvania. I know absolutely nothing about condemnation proceedings in Pennsylvania.

If you have any acreage position at all, I strongly recommend that you get a qualified attorney well experienced in these matters involved ASAP.

My limited experience in condemnation suits (most of mine settle before we go to the courthouse) is that for a legal team to take the case through the courts will run at around $25K. Of course, this depends on the nature of the case, etc.

Best,

Buddy Cotten

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Mr Cotten,

Thank you for your candidness and the offering of the experience you do have. I value your insight.

Regards,

Ryan

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