Progressive Pathways, ONEOK Partners reach agreement on Bakken pipeline project
February 3, 2012
After several months of intense negotiations, the Progressive Pathways landowner group has successfully reached an agreement with ONEOK Partners for the Bakken pipeline project. The pipeline is slated to begin in the spring of 2012, and will run north to south across eastern Wyoming.
“We were able to negotiate a far better than average easement deal and compensation package for our landowner members because we are a large-scale group, and our mission was truly focused on obtaining the best possible deal for the landowners, not to stop the pipeline, or have it moved,” explained attorney Frank Falen of Budd-Falen Law Offices in Cheyenne, WY, who represented the Progressive Pathways group in their negotiations.
Over 100 landowners are members of Progressive Pathways. Falen noted that the volume of individuals, and acres, represented by the group resulted in them working directly with high-ranking individuals of ONEOK Partners, and in better negotiating an easement package, and mitigating risk inherent with having a pipeline easement of any kind.
“We were very pleased with what was achieved. This sort of agreement could work for lots of people in lots of situations, and demonstrates how beneficial it is for people to work together for a common goal. The ONEOK individuals we dealt with informed us they had worked with lots of landowner groups over the years, but they had never worked with one whose goal was to protect the landowners and actually negotiate an agreement,” added Progressive Pathways President Pat Wade of the unique situation surrounding the negotiations.
The result of the group’s mindset was an unprecedented agreement that Progressive Pathway members hope will rewrite the book on landowner/pipeline company negotiations in the future.
“Instead of a compensation package based on the interest of the ag value of the land the company will be using for the easement, we worked from the angle of the issues that will be imposed upon the landowners as a result of the pipeline, the restrictions that easement will impose on the landowner, and the time commitment on the landowner’s part as a result of the pipeline, in addition to looking at future use of the land with the easement on it,” continued Falen.
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Such a mindset is not necessarily new for landowners, however, providing a company the incentive to consider that mindset with an open mind is new.
“The size of the Progressive Pathways group provided the resources necessary to fully evaluate and utilize all available political opportunities. The ability to potentially disturb and delay a project translates into bargaining leverage, and, in turn, bargaining leverage is the best assurance that the other party will view your perspective with an open mind,” Falen explained.
This bargaining leverage also resulted in the group being fully involved in the drafting of what is a substantial reclamation document, and in addressing landowner liability indemnity issues in ways far beyond what is typically seen in an easement agreement.
“There were six people on the Progressive Pathways negotiation board, and we were taken very seriously at all times during negotiations. There were legitimate problems and issues that would arise if ONEOK had been unable to reach an agreement with us due to our size, and we had that same incentive in dealing with them. It was a vastly different scenario than the individual landowner would see in negotiating with a pipeline company, and we hope the precedence we set will alter future negotiations across the board,” added Falen.
ONEOK said they feel the process went well, that they appreciated all the efforts of the negotiation team, and that they have had significant success using the agreed upon framework for the project to date.
Progressive Pathways is not simply hanging up their hat since reaching an agreement. The group has a fund maintained to help address any issues that may arise during construction of the pipeline, and are setting their sights on additional ways to improve landowner negotiations with industry companies.
“Our group plans to work on condemnation laws with the legislature in an attempt to level the playing field and make things more favorable to landowners. We are also proposing legislation that will create a fund similar to the Abandoned Mines Fund, where all pipeline companies pay into a fund, and can then draw on it in the case of a big spill or a company going broke, to ensure the land is cleaned up and preserved,” explained Wade.
One of the most important things he learned throughout the negotiating process was how important it is to set good precedence.
“Once there has been a good precedence set, the next person or group can look at that agreement as an example and it becomes tough for a company to argue a point that has been used in prior negotiations,” he explained.
While the actual dollar amounts are confidential, the general public will have the opportunity to view the easement after it is recorded by ONEOK.