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FERC Regulated Pipelines & Eminent Domain

White Law Office > Energy  > FERC Regulated Pipelines & Eminent Domain

FERC Regulated Pipelines & Eminent Domain

Definitions

Right of Ways & Easements:

  •  Right to use another’s land for a specified purpose, i.e., to construct and use pipelines to transport oil, gas, and other liquid hydrocarbon products

FERC: Federal Energy Regulatory Commission

  • The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. FERC also reviews proposals to build liquefied natural gas (LNG)terminals and interstate natural gas pipelines as well as licensing hydro power projects.

Eminent Domain

  • A right of a government to take private property for public use by virtue of the superior dominion of the sovereign power over all lands within its jurisdiction

EMINENT DOMAIN

Q: What is the difference between a negotiation for a normal pipeline right of way and a right of way with eminent domain status?

A: Eminent Domain grants a right of access.

QUESTIONS YOU SHOULD ASK

Number, Size, and Location of Pipelines:

  • How many pipelines will be installed?
  • Is there a maximum number of pipelines that can be installed?
  • What is the maximum diameter of the pipeline?
  • Will a map or survey be provided?

Compensation:

  • What is the company basing its valuation on?
  • What is the calculable value of the proposed right of way?

Surface Disturbance:

  • Will any above-ground facilities be installed to serve the pipeline?
  • Is the value of the damage based on market value or appraisal?
  • Is the company required to remove the pipeline(s) after the ROW expires?
  • Are there unique features on the property that must be taken into consideration?
    • Wetlands, Marketable Timber, Crop fields, etc

ECONOMIC COMPENSATION

Payment Terms:

  • $???.00 per linear foot…
    • For the permanent easement?
    • For the temporary easement?
  • Flat Rate Compensation
    • For the temporary construction site?
    • The temporary or permanent access road?
  • Wheelage?
    • Yearly fee for being the “lighthouse keeper”

NON-ECONOMIC COMPENSATION

Property Improvement:

  • Access road improvement/installation
  • Recreational improvements
    • Feed plots
    • Hunting blinds
  • Etc.

SURFACE PROVISIONS

Above-Ground Facilities:
“GRANTEE agrees that there will be no above-ground facilities placed upon the property, including the right-of-way, with the exception of required cathodic protection test stations and pipeline signage and markers at fence lines and stream crossings.”

Depth:
“GRANTEE shall bury all pipelines to a minimum depth of forty-eight(48) inches below the surface of the ground at the time of construction,measured from the top of the pipe to the surface of the ground without exception.”

Double-Ditch Method:
“GRANTEE agrees to utilize the ‘double-ditch’ construction method across crop and pasture lands for the installation of any pipelines within the right-of-way. Topsoil shall be separated from sub-soil during GRANTEE’s operations and then properly replaced over the surface area following GRANTEE’s operations.”

Drainage Tiles:
“GRANTEE, under supervision of GRANTOR, shall replace any and all damaged drainage tiles caused by GRANTEE exercising any rights here under”

Reseeding:
“Upon completion of any construction, GRANTEE shall reseed any disturbed acreage. All reseeding shall be done with suitable grasses selected by GRANTOR and during a planting period selected by GRANTOR…”

Crop Damage:
“GRANTEE shall compensate GRANTOR or any tenant (but not both) for the damage to any crops at market value price at the start of the right of way construction for the projected yield at full maturity, when such is caused by GRANTEE exercising any rights here under. GRANTEE shall also compensate GRANTOR or any tenant (but not both) for any expense incurred resulting from the diminish-ment of pasture used for the grazing of animals, including but not limited to, compensation for the loss of the land as well as any expense incurred inthe procuring of alternative feeding sources, when such is caused by GRANTEE exercising any rights here under.”

Timber Removal:
“GRANTEE hereby agrees to pay Grantor the fair market value for any damages to timber arising from GRANTEE’s operations under this Agreement. At Grantor’s request, GRANTEE will neatly stack any and all timber that is not greater than eight-foot (8’) sections. GRANTEE shall, at Grantor’s request,remove any non-marketable timber, at Grantee’s sole cost.”

MISCELLANEOUS

Taxes:
“GRANTEE agrees to be responsible for paying any additional or increased taxes assessed by any taxing body when any such additional or increased taxes are determined to be a direct result of GRANTEE’s operations, including increased property taxes resulting from reassessment of the value of the property due to GRANTEE’s activities and operations.”

Hazardous Materials:
“GRANTEE shall not use, dispose, or release on the GRANTOR’s property or permit to be used, disposed of, or released on the GRANTOR’s Land as a result of its operations, any substances (other than those GRANTEE has been licensed or permitted to use as a result of this Agreement) which are defined as a ‘hazardous material’ or ‘toxic substance’ or ‘solid waste’ in applicable federal, state, or local laws,statutes, or ordinances.”

APPROPRIATION ACTIONS

Injuctions:

  • The pipeline company may seek injunctive relief if consistently denied access.

Appropriation Action:

  • Law suit brought by a pipeline company that has been granted a right of eminent domain by the government.

Relief:

  • Judicially determined value of property.
  • Other compensation…

APPROPRIATION ACTIONS

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