Be careful with pipeline easement negotiations

Ohio’s natural gas and oil boom is resulting in a flurry of pipeline construction all over the state as well as complaints about high-pressure tactics from leasing agents.

Landowners are advised to contact an attorney if approached about a pipeline easement, particularly if the agent is threatening the use of eminent domain. Unfortunately eminent domain is sometimes being brought up when it shouldn’t be, and Dale Arnold, OFBF’s director of energy, utility and local government policy. He has some helpful information about pipeline easements and what to do if leasing agents are being too aggressive.

Long-term impact of easements

Because easements can be in place for generations, make sure you hire an attorney who specializes in pipeline or landowner issues and who will be able to develop a well-thought out plan for the immediate and long-range future of the land. Also consider hiring experts who deal with soil and water conservation, timber, and drainage issues. Negotiate for loss of the land’s real estate value, land affected by construction, loss of crop production due to compaction and attorney or expert fees.

Don’t hurry, and get everything in writing

Don’t let leasing agents or others rush you into signing something. Get everything in writing and ask to look over the paperwork with your attorney. Along with detailing your financial settlement, consider a lease agreement as a construction work order. Get in writing within the easement everything concerning how your soil, drainage infrastructure and on farm facilities are to be protected, repaired and/or remediated. This includes how the company will pay for ongoing preventive maintenance and other impacts to the property throughout the scope of the agreement.

What’s eminent domain and what’s not

Pipelines used to carry materials such as ethane and/or other natural gas liquids do not qualify for eminent domain as the laws are currently written and interpreted. The power of eminent domain depends on what the pipeline will be carrying. Interstate pipelines hauling natural gas or crude oil or a refined product such as gasoline or fuel oil come under Federal Energy Regulatory Commission (FERC) jurisdiction and eminent domain could apply to those pipelines. Intrastate pipelines hauling those same materials also typically qualify for eminent domain under state law.

Eminent domain does not apply to collection line systems used to take any materials from oil and gas wells to a central collection point

What to do with pushy leasing agents

If you feel leasing agents or others are being too aggressive, write down their name, company name, address, phone number, license plate number, when they made contact, what they said and give that information to your attorney. If you feel threatened in the course of a conversation, you have the right to complain to the Ohio attorney general or other authorities.

For more information, contact Arnold at 614-246-8294 or [email protected]