Be ready to negotiate when pipeline construction comes through

Over the next 10 years, Ohio is projected to have 38,000 miles of pipeline construction done statewide. The new or upgraded pipelines will carry everything from natural gas to crude oil to refined fuels.

Because so many different types of pipeline construction will be going on (see below), landowners need to be aware that many projects don’t fall under eminent domain, said Dale Arnold, Ohio Farm Bureau’s director of energy policy. That means the ability and responsibility to effectively negotiate with energy companies and others is important, he said.

“Keep in mind that you probably shouldn’t take the initial offer. You have the ability to offer counterproposals and hiring a good attorney will result in a good negotiation,” he said.

Here are some of Arnold’s tips:

– Investigate what the fair market value of the land is by looking into similar properties at the auditor’s office or asking a real estate agent.

– Negotiate for loss of the land’s real estate value. Look at the amount of land affected by the right of way and consider how much that strip of property would be worth in 30-50 years in case you ever have to sell the property.

– If some of the land affected by construction is used for ag production, look into how much it would cost to rent farm ground to make up for that lost production, whether it’s for planting or holding animals. Ohio State University Extension can help determine land rental rates. For land used for growing crops and taken out of production, negotiate what it would cost to fulfill an existing contract or what it would cost to make up for feed you normally grow for your animals.

– Consider that a right of way can halt some types of agriculture for a long time — or even forever — because of clearcutting requirements. Examples are timber, vineyards, Christmas trees and orchards. For these types of agriculture, calculate the amount of lost timber, produce, etc. over a 30-year time period or more and negotiate that.

– Negotiate the loss of crop production due to compaction and what it will cost to amend the soil. The state and federal government have minimum guidelines on compaction repair/remediation standards but you can negotiate beyond those.

– Negotiate that attorney or expert fees be covered along with fees for filings, consultants and surveys.

– Make a list of everything you think should be covered in a contract and closely look through it to ensure nothing was left out.


Types of pipelines

– Interstate: Largest system of transportation pipelines; governed by the Federal Energy Regulatory Commission (FERC).

– Intrastate: Governed by the Public Utilities Commission of Ohio (PUCO) and the Ohio Power Siting Board (OPSB).

– Collection systems: A network of pipelines used to collect natural gas and natural gas liquids from a well to a central collection point; governed by the Ohio Department of Natural Resources (ODNR).

– Infrastructure renewal projects: Many local utilities are engaged in these pipeline upgrades; governed by the PUCO.