Not a pipe dream: Landowners work together to negotiate with pipeline builders
The days of fear and anxiety over a pipeline crossing private property may be coming to an end.
According to Kevin Braun, a rancher who is helping facilitate conversation between landowners and the construction companies, one of his goals is to prevent landowners from losing any rights or making agreements that take advantage of them.
“We got all the landowners in Montana together and we set up a group,” he said. “We’re not here to stop the pipeline, we want an easement that protects the land and protects the landowner. We didn’t ask for the pipeline but we’re going to get it anyway. Our goal is to get the best easement to protect landowner rights and liabilities.”
The line he’s talking about is being called the “South Bend” pipeline, and is intended to stretch from Johnsons Corner in North Dakota to the Baker, Montana area, according to Bridger spokesman Bill Salvin.
The line will connect to existing line that runs from Baker to Hulett, Wyoming, and Bridger will also build a second stretch of line, named the Equality Pipeline, from Hulett to the Guernsey, Wyoming, area. Philipps 66 plans to put in the Liberty Pipeline, a 24 inch line, that will begin at Guernsey and end at Cushing, Oklahoma.
Bridger Company, that will build the two north segments, is a subsidiary of True Company based out of Casper, Wyoming.
The pipeline will move light crude oil from the Rockies and Bakken production areas to Cushing, where Gulf Coast markets can be accessed.
The companies will use American-made steel when feasible during the construction phase, said Jill Sweeney with Philipps 66.
Braun said in the past, landowners have often accepted too much liability for a pipeline on their property that they don’t own and that doesn’t benefit them.
“They used to drive in your yard, give you a one page easement that gives them the right to do everything. They would pat you on the back and hand you a check,” said Braun. He said often the company building the pipeline sets up a special Limited Liability Corporation so that if there are major financial issues throughout or after the building phase, that LLC might go broke, but the parent company isn’t harmed. “The contractor might not get paid, so he sues the landowner. Why should the landowner be responsible for that kind of action?” Braun said the improved easements he and others are working on, together with the help of Wyoming property rights attorney Frank Fallen offer significant protections to landowners.
The landowners have formed a group they’ve named Property Rights Organization or PRO, to negotiate with, in this case, Bridger Company.
Braun said they work closely with other similar groups in other states including a group created by their southern neighbors, called Wyoming Pathways, and Colorado Pathways in the mile high state. “We cover a large area. We’ve established a close working relationship with the other states and we all work closely together to ensure the easements and payments are appropriate and favorable to all landowners involved. We collaborate on multiple issues and always end with a positive solution for the landowners affected by the easements,” he said.
Other states, including Wyoming have also formed groups to give local landowners more clout in dealing with the companies financing the pipe about to be laid.
Often if a landowner and pipeline company can’t come to an agreement, the pipeline goes through legal channels to condemn the necessary land, and proceed forward with the pipeline. “It costs millions to condemn, plus it’s a public relations nightmare,” said Braun. So it is in the company’s best interests to only use condemnation as a last resort.
The agreements the PRO is working on include several protections for landowners not typically seen in contracts set up by the pipeline company themselves, including the following points, along with several other issues.
• Vicarious liability. The landowner is not responsible for problems caused by the pipeline, unless the landowner causes said problems with criminal intent. “If I send my hired man to drill postholes, even if we make the 811 call, mistakes can still be made. If he drills through the pipeline and kills himself, my ranch isn’t liable like it was in previous easements.” Past agreements have placed too much liability on the landowner, to the point that a rancher might lose his entire ranch due to a physical injury or damage to the pipeline.
• Cost incurred to landowner because of pipeline is not the landowners’ responsibility. “If you want to lay water pipeline across, it can cost thousands of dollars. With most current easements, the landowner has to pay that cost. But with our easement, the pipeline owner pays that cost.” The pipeline is also responsible for backfill and reclamation including weed control after such a project, and after the pipeline itself is laid, said Braun. Additionally, compensation for lost use will be considered. For example, if a landowner operates an irrigation pivot, he can calculate the lost potential income due to the digging and laying of the pipe in addition to the time needed for regrowth of the crop, if possible.
• Compensation for time lost. “We’re the only ones sitting at the table not getting paid for our time. Sometimes it takes time, someone leaves a gate open and the cows get out. If I have to shut a water line off, or if my cows get mixed with the neighbor’s and I have to go sort them and bring them back, those are time consuming.” Braun explains that, in the easements his group is discussing, landowners will be paid back for time spent due to pipeline issues.
Braun said he’s helped negotiate similar easements for other pipelines in his area, so he’s getting more comfortable with the process and knowing what needs to be included. The One Oak gas line, the High/Land Crude oil pipeline and Denbury CO2 pipelines all travel across his property. “We successfully negotiated easements and payments for all three pipelines, along with our neighbors in Wyoming,” he said.
“To make this country work, we have to be able to transport petroleum products safely – the pipelines are the safest way to do it,” he said. Because of the significant amount of public land in Montana, and the difficulty in obtaining the right to cross them, a corridor of sorts has been established across him and other eastern Montana farmers and ranchers, he said. Sweeney agrees, saying approximately 95% of the current route follows existing transportation/utility corridors.
Salvin said Bridger hopes the Equality segment will be in service by mid 2020 and that the North Dakota/Montana/northern Wyoming segment, South Bend, will be functional by mid 2021. “We are in the process of acquiring those easements,” he said.
“Our intention is to treat every landowner fairly and respectfully whether they come to us as a part of a group or individually it doesn’t affect how we treat them. We understand landowners have concerns and we know we can address those concerns, compensate them fairly and treat them well. That’s our plan, that’s what we’re going to do,” he said.
The companies will use American-made steel when feasible during the construction phase, Sweeney said.
Neither Braun nor the pipeline companies expect significant protesting like the Dakota Access Pipeline constructors dealt with in 2016-’17. “They will be trying to cross mainly private land,” said Braun.
The pipeline, which will be buried at least 36 inches below ground level is expected to support about 50 full time employees, mostly for maintenance, after the construction phase is complete.
Phillips 66 is committed to protecting the environment and wildlife, said Sweeney.
The company will use advanced construction techniques to increase safety, including burying pipelines deep underneath water crossings and sensitive areas using a technique called horizontal directional drilling, she said.
· The pipe has an epoxy coating and will be installed with a cathodic protection system to help prevent corrosion.
· Sweeney also said the Liberty Pipeline will be inspected and monitored with the latest technology. “Before beginning commercial service, all pipeline welds will be X-rayed, and the pipeline will be hydrostatic tested – which involves filling the pipeline with water and pressurizing it above normal operating pressure to ensure there are no leaks.”
· If a leak is suspected, the problem section can be isolated using motor operated valves controlled from our central control center, she said.