Wyoming landowner group negotiates easements in pipeline deal | TSLN.com

Wyoming landowner group negotiates easements in pipeline deal

Heather Hamilton

Progressive Pathways landowner group negotiates directly with ONEOK Partners on easements for a 525-mile long, liquid natural gas pipeline that will affect over 220 landowners in Wyoming.

ONEOK and Progressive Pathways met Nov. 17 to work toward a final decision that will address liability, abandonment, reclamation and compensation for Progressive Pathways members affected by a pipeline that will run north and south down the length of eastern Wyoming.

“We got a letter right after the first of the year stating that ONEOK would be building a pipeline on or near our property, starting in 2012. I talked to my neighbors, and we discussed forming a group in Niobrara County. Soon after that we found out about other groups that were meeting both north and south of us, so we all banded together in hopes of gaining some bargaining power through increased numbers,” explained Progressive Pathways Chairman and Niobrara County rancher Pat Wade of the group’s beginning.

He added that Progressive Pathways has also partnered with the Eastern Montana Landowner Group, and the two are in joint negotiations with ONEOK to work on the best possible deal for members of both organizations.

“As a landowner, you have no choice but to participate in a project because state law has given private companies the ability to condemn a property. If you can put together a large enough group, you acquire the political and legal ability to work with regulatory bodies, and within the legal system, to apply enough pressure that it becomes necessary for a company to work seriously with you on the key issues, which are liability, indemnity, reclamation and compensation in this instance,” explained Frank Falen of Budd-Falen Law Offices LLC out of Cheyenne, WY, who represents Progressive Pathways in their negotiations.

A group-based mindset has worked well thus far. Progressive Pathways successfully negotiated a survey access agreement early in their dealings with ONEOK, which was among the first that provided landowner compensation in western states. They have continued working on fair deals in each of their four key areas ever since.

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“Overall, we’re working well with ONEOK on each of our four priorities, and hopefully we will have a final agreement in place soon,” commented Progressive Pathways member Donley Darnell. Darnell ranches in southern Weston County, and his property is among those slated to be included in the 50-foot wide pipeline corridor.

“From a liability standpoint, the biggest problem we identified is the pipeline company will be operated as an LLC. If something terrible where to happen, the most anyone would stand to lose was their investment. In contrast, the landowner’s liability isn’t capped in any way, and it could potentially cost him his place and everything he has. We’ve worked really hard to negotiate some language, and an easement, that helps protect the landowner from a liability standpoint,” Wade explained.

On the issue of abandonment, Darnell stated that the group is working to have assurances included in the easement so when the time comes, the pipeline will be properly decommissioned.

“Our concern is that usually as these projects age, they most often sell, and every time they sell the company that buys them is typically less financially able to fulfill their obligations. So, there is the potential for a problem in regard to being able to properly decommission, and we have addressed that,” Wade added.

In terms of reclamation, Progressive Pathways worked to negotiate terms that included minimizing scarring and returning the land to original productivity levels, and are contacting County Commissioners for help and input. They have already received help from conservation districts and weed and pest districts in multiple eastern Wyoming counties, and Wade noted that assistance is very much appreciated.

“Of our four identified priorities, we have worked through all of them but compensation, which was discussed for the first time at the Nov. 17 meeting,” he said.

“ONEOK’s first compensation offer to the landowner was less than eight-tenths of one percent of the cost of the pipeline. That shows you how little of the total cost of the project they were looking to give to landowners. We are still far apart on this issue, but ONEOK has been good to work with,” Wade said of the current situation.

“We’ve had much more leverage as a group than we would have as a single landowner. We were meeting with the Vice President of all ONEOK natural gas pipelines, whereas a single person would most likely never get past meeting with the land man,” Darnell added.

“One point ONEOK made early on was that they wanted to talk to someone who could make decisions – that when they came to us they wanted to speak to the landowner. We made that same point back to them, and said that’s an important aspect to us as well,” stated Wade of the effectiveness of the group in meeting with people who can make decisions and answer questions, rather than those who can simply get a signature.

“So far we’ve been able to address a lot of issues important to the landowners. If each landowner were trying to accomplish the volume of what the 200 people in Progressive Pathways are, the cost would be huge, and each landowner would be incurring that same cost for the same result. In this case they know we’re not toothless, and we have bargaining leverage. If you have no bargaining leverage, then so-called negotiating sessions really become therapy session where the company tells the landowner what they’re going to do, and to not feel bad about it,” Falen noted of the increased affordability and effectiveness the group.

“The intention of our group is not to try to keep the pipeline from coming, or to get it moved to another area. The intention is to negotiate the best terms and conditions possible. We know they have the power to condemn, and that in the end we can’t keep them out. The landowner is forced into this type of transaction because there is the power of condemnation. But, with that in mind, we’re attempting to negotiate fair terms for all group members over the life of the pipeline,” Wade stated.

Progressive Pathways landowner group negotiates directly with ONEOK Partners on easements for a 525-mile long, liquid natural gas pipeline that will affect over 220 landowners in Wyoming.

ONEOK and Progressive Pathways met Nov. 17 to work toward a final decision that will address liability, abandonment, reclamation and compensation for Progressive Pathways members affected by a pipeline that will run north and south down the length of eastern Wyoming.

“We got a letter right after the first of the year stating that ONEOK would be building a pipeline on or near our property, starting in 2012. I talked to my neighbors, and we discussed forming a group in Niobrara County. Soon after that we found out about other groups that were meeting both north and south of us, so we all banded together in hopes of gaining some bargaining power through increased numbers,” explained Progressive Pathways Chairman and Niobrara County rancher Pat Wade of the group’s beginning.

He added that Progressive Pathways has also partnered with the Eastern Montana Landowner Group, and the two are in joint negotiations with ONEOK to work on the best possible deal for members of both organizations.

“As a landowner, you have no choice but to participate in a project because state law has given private companies the ability to condemn a property. If you can put together a large enough group, you acquire the political and legal ability to work with regulatory bodies, and within the legal system, to apply enough pressure that it becomes necessary for a company to work seriously with you on the key issues, which are liability, indemnity, reclamation and compensation in this instance,” explained Frank Falen of Budd-Falen Law Offices LLC out of Cheyenne, WY, who represents Progressive Pathways in their negotiations.

A group-based mindset has worked well thus far. Progressive Pathways successfully negotiated a survey access agreement early in their dealings with ONEOK, which was among the first that provided landowner compensation in western states. They have continued working on fair deals in each of their four key areas ever since.

“Overall, we’re working well with ONEOK on each of our four priorities, and hopefully we will have a final agreement in place soon,” commented Progressive Pathways member Donley Darnell. Darnell ranches in southern Weston County, and his property is among those slated to be included in the 50-foot wide pipeline corridor.

“From a liability standpoint, the biggest problem we identified is the pipeline company will be operated as an LLC. If something terrible where to happen, the most anyone would stand to lose was their investment. In contrast, the landowner’s liability isn’t capped in any way, and it could potentially cost him his place and everything he has. We’ve worked really hard to negotiate some language, and an easement, that helps protect the landowner from a liability standpoint,” Wade explained.

On the issue of abandonment, Darnell stated that the group is working to have assurances included in the easement so when the time comes, the pipeline will be properly decommissioned.

“Our concern is that usually as these projects age, they most often sell, and every time they sell the company that buys them is typically less financially able to fulfill their obligations. So, there is the potential for a problem in regard to being able to properly decommission, and we have addressed that,” Wade added.

In terms of reclamation, Progressive Pathways worked to negotiate terms that included minimizing scarring and returning the land to original productivity levels, and are contacting County Commissioners for help and input. They have already received help from conservation districts and weed and pest districts in multiple eastern Wyoming counties, and Wade noted that assistance is very much appreciated.

“Of our four identified priorities, we have worked through all of them but compensation, which was discussed for the first time at the Nov. 17 meeting,” he said.

“ONEOK’s first compensation offer to the landowner was less than eight-tenths of one percent of the cost of the pipeline. That shows you how little of the total cost of the project they were looking to give to landowners. We are still far apart on this issue, but ONEOK has been good to work with,” Wade said of the current situation.

“We’ve had much more leverage as a group than we would have as a single landowner. We were meeting with the Vice President of all ONEOK natural gas pipelines, whereas a single person would most likely never get past meeting with the land man,” Darnell added.

“One point ONEOK made early on was that they wanted to talk to someone who could make decisions – that when they came to us they wanted to speak to the landowner. We made that same point back to them, and said that’s an important aspect to us as well,” stated Wade of the effectiveness of the group in meeting with people who can make decisions and answer questions, rather than those who can simply get a signature.

“So far we’ve been able to address a lot of issues important to the landowners. If each landowner were trying to accomplish the volume of what the 200 people in Progressive Pathways are, the cost would be huge, and each landowner would be incurring that same cost for the same result. In this case they know we’re not toothless, and we have bargaining leverage. If you have no bargaining leverage, then so-called negotiating sessions really become therapy session where the company tells the landowner what they’re going to do, and to not feel bad about it,” Falen noted of the increased affordability and effectiveness the group.

“The intention of our group is not to try to keep the pipeline from coming, or to get it moved to another area. The intention is to negotiate the best terms and conditions possible. We know they have the power to condemn, and that in the end we can’t keep them out. The landowner is forced into this type of transaction because there is the power of condemnation. But, with that in mind, we’re attempting to negotiate fair terms for all group members over the life of the pipeline,” Wade stated.

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