Right way for right-of-way

Don Gadd Landman Published:

Perhaps you haven’t been part of the big oil play yet. Either your land was already under lease or the minerals were severed several years ago, or you just don’t sit in the areas currently deemed “hot.”

Don’t lose heart; things change in this business all the time.

In the interim you may be approached about something else common for this industry: Pipeline right-of-ways. The gas doesn’t get to market in five gallon pails. It has to be shipped through a delivery system and in order to get there many new lines will have to be constructed as the area may not have existing pipeline systems, the lines there may not be of sufficient size, or the content of the gas is of high BTU content and has to be shipped independently to these new refrac plants that strip a lot of the components out of the gas (a story for a different column).

In that event, you will be contacted about a pipeline right of way which in some instances is many miles from the existing field. (Remember from point A to B has to be covered.) But, unlike the old days, these pipes in this system may be of massive size and very high pressures. To compensate for this, these companies are paying much more in roddage fees (a lenghth of 16.5 feet).

Today, it is common to see fees that include a payment of so much per foot and an escalating scale of payment determined by the O.D. size (how many inches in diameter a line is). This is great as it makes for a much larger payment for something that is going to remain on your land perhaps for a very long time.

So, it is important to consider this right of way very carefully as it will have lasting effects on your property for years to come. I am not saying not to sign. But, as with every contract, take your time to read and study it. It is important for your neighbors, the area, and even this region that right of ways get signed. But, long after the excitement has died down, you shouldn’t be sitting there kicking yourself because you let them build a line right through that area of a good house site that you were going to build on someday.

In the next several articles I want to explore several of the issues I have dealt with over the years. Some of the current complications being dealt with and some possible alternatives to resolve these issues to the benefit of all. Let’s hope I get to them before you are contacted.

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