PIPELINE EASEMENTS

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PIPELINE EASEMENTS

• LAND OWNER RIGHTS

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Existing Pipeline
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Right-of-way Easement(ROW)

• Contract between landowner and company
• Right or privilege in the real estate of another
• Transfers by conveyance of land
• Transfer by ROW holder by assigment
• No standard right-of-way agreement

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Terms of Easement

• Substance to be transported
• Size of pipeline
• Weaver v. Natural Gas Pipeline Co. of America, 27
  Ill. 2d 48 (1963)
• ROW gave Natural Gas right to replace a four inch
  gas pipeline with a ten inch gas pipeline. ROW
  had no size limitation on pipeline installed.
• Single or multiple pipeline rights

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Terms of Easement (Contd)

• Location on property/Boundaries
• Duration
• Access requirements
• Payment/Fee/Renewal fees
• Rights of landowner
• Indemnification
• Termination/Abandonment

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Right-of-way Restrictions

• Construction over Pipeline Right-of-Way
• Excavation
• Line markers and warning signs are used to
  indicate where a pipeline is buried.
• Landscaping
• Fly over capability for inspection

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Request for Pipeline Easement or Option

• Option vs. Easement

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Options

• Contemplates potential future ROW
• Land owner beware terms of ROW
• included in option agreement
• Compensation for option
• Free money if option is not exercised
• Pre-negotiated terms of ROW for reduced value

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New Easement Negotiation

• Issues addressed in existing easement
• Pipeline depth
• Topsoil replacement
• Repair of damaged tile lines
• Instillation of new title lines
• Rock/debris removal
• Compaction Ratting

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New Easement Negotiation (Contd)

• Prevention of soil erosion
• Damage to private property
• Clearing of trees and brush
• Land leveling
• Internet search Illinois Department of
  Agriculture Pipeline Construction Standards and
  Policies.

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Eminent Domain
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Gas vs. Oil

• Gas
• Federal certification - FERC
• - http//www.eia.doe.gov/oil_gas/natural_gas/analy
  sis_publication/
• ngmajor/eg/fercpipelines.html
• Blanket Certification Authorization to install
  and operate pipeline
• - 18 C.F.R 61 157.208(a), (d) (2003)
• Make miscellaneous rearrangements of any
  facility (pipeline), or acquire, construct,
  replace, or operate any eligible facility
• Natural Gas Act - Eminent Domain
• - 15 U.S.C. 717 (F)(h) (2000)
• Court Proceedings - Compensation cost only
• - Will not address safety concerns

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Oil

• Controlled by State Law
• 220 ILCS 5/15 et seq.
• Common Carriers by Pipeline
• Illinois Commerce Commission
• Certification for Common Carrier Pipeline
• Eminent Domain - Compensation Cost

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Current Pipeline Challenges

• Declaratory Judgment Actions Filed in The United
  States Southern and Central Districts of Illinois
  Validity of Easement.
• Relying on Ruling by Central District Court that
  1939 Easement is not abandoned.
• Ruling limited to property at issue in case.
• Landowners present evidence of abandonment.
• Lack of Use.
• Remove of destruction of part of pipeline.
• Failure to maintain or implement cathodic
  protection system.

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Current Pipeline Challenges (Contd)

• Definition of Abandonment
• Permanent removal from service of the pipeline. A
  section of pipeline can be abandoned in place or
  removed. In the former case, it is assumed that
  cathodic protection of the pipeline is
  discontinued and that no measurements are taken
  to maintain the structural integrity of the
  abandoned pipeline.
• (Pipeline Abandonment, A Discussion Paper on
  Technical and Environmental Issues, November
  1996, http//www.capp.ca.)

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Questions and Comments

• Barbara G. Taft
• LivingstonBarger Law Firm
• 115 W. Jefferson St., Suite 400
• Bloomington, IL 61701
• Tel. [phone]
• Fax [phone]
• btaft_at_lbbs.com