With expected increased shale drilling come offers for pipeline easements. Pipelines are used for transporting well products, as well as potentially other drilling fluids.
The typical industry right of way or easement document is slanted in favor of the grantee and against the landowner. Often the easement literally covers the whole acreage, without even any requirement of any specific location.
A landowner should require that a pipeline easement include the following kinds of protections:
1. Restricted easement area and defined location and width, usually with a wider temporary construction easement, and a narrower pipeline easement. The easement should be surveyed and mapped. The addition of pumps, meters or buildings should not be allowed without a separate written agreement and additional payment.
2. Restricted uses for the easement. The restrictions could cover size, pressure, depth, and limits on materials transported in the pipeline.
3. Special construction provisions. Provide for a timeline, temporary crossings and access, and work standards.
4. Payments to landowner. Payments can be on an area or lineal foot basis; either needs to be carefully defined. Obtain independent opinion as to fair easement payment amounts; these pipelines should merit a much higher payment than a conventional utility line. The landowner needs to be compensated separately for damaged crops, timber, structures and temporary inconvenience.
5. Landowner use; maintenance and upkeep. The landowner’s continuing use of the surface area should be explained. The obligation for maintenance and upkeep of the pipeline should be clear.
6. Liability. The pipeline owner and construction contractors should provide evidence of insurance and should indemnify and hold harmless the landowner from any claim that might arise by reason of the pipeline.
7. Termination or abandonment. If the pipeline is not constructed as planned, or if the pipeline is unused for some period of time, the rights should terminate, and the pipeline should be removed at the pipeline owner’s cost, with the land remediated.
Landowners need to apply similar considerations when asked to give rights for pump stations, meter stations and other facilities.
Also, protections limiting noise need to be applied to any agreements for those facilities, whether by lease, easement, deed, or other conveyance.
The landowner should negotiate all these provisions before signing any documents.
Alan D. Wenger is an attorney in Youngstown, Ohio. His practice areas include oil and gas law, public utilities law, labor and employment law, land use law, environmental law, construction law and school law.