What’s the going rate for a pipeline easement in Texas? It depends on a number of factors that Attorney Philip Hundl describes in this video. Call or text 800-266-4870 for an appointment with Mr. Hundl.
Summary of the Going Rate for a Pipeline Easement Video
Hi, I’m Philip Hundl. I’m an attorney here in Texas along the Gulf Coast. I represent landowners in condemnation cases. Condemnation cases could involve power lines, various pipelines, gas pipelines, highway expansions, roadways, and even canals. We’ve had canal condemnation work against LCRA and different water authorities.
What I’d like to talk about is one of the questions that I probably get asked half a dozen times a day. I get these calls from different folks, asking about the going rate for a pipeline easement.
So, what is the going rate for a pipeline easement? How much can I expect for a pipeline easement? Unfortunately, I have to tell them it depends, and it depends on a lot of factors.
I review the different factors with the caller, and I ask them a series of questions. I’ll ask these questions, and the landowner won’t have the answers. So I tell the caller at this point it’s impossible to determine what the going rate for that easement could or should or might be. We don’t have the information we need to estimate that number.
Factors Determining the Going Rate for a Pipeline Easement
There are quite a few factors to use in trying to assess the pipeline company’s offer or what a counteroffer should be. I’ll review some of the most important ones here.
Is the Pipeline for Private or Public Use.
We first need to know if this is going to be a private arrangement, or is this going to be a taking for a public use? So, that’s the number one question to ask. Is the pipeline company trying to acquire this easement by negotiating an agreement with the landowner? That would be a private pipeline, and it’s a private transaction. If the pipeline company cannot reach an agreement with the landowner then the company will go around your land or decide not to run the line, or something to that effect. So is the pipeline private or public?
If the pipeline is for a public use, the pipeline company is going to condemn your property and take it using the power of eminent domain, which they may or may not have. That’s something to be determined in the case.
Eminent domain is the power that government or in some cases a private entity can have to take property from a private individual or private entity or private company or whatever. If the company is going to be using eminent domain and go through the condemnation process, that’s extremely important. That condemnation process is going to impact what the going rate will be.
Maybe it’s not so much going rate, but rather it’s the amount that the pipeline company may agree to pay if a settlement is reached, or the amount that a judge or jury could determine in coming up with just compensation.
Also, a company may claim to have the right of eminent domain, but is not planning on using it. The pipeline company may tell you they are common carrier, and they could condemn your property, but they are choosing for this project to not condemn your property. So, they’re going to take the path of a private acquisition of the easement.
What’s the Scope of the Easement
What’s going to be the scope of the easement? What will be the terms of the easement that they’re seeking? Lots of different factors come into play.
We can talk about the width of the permanent easement, the width of temporary easements, and how much additional work space are they going to need. These are very important components in determining compensation. So if it’s a really wide easement, it stands to reason that the pipeline company should pay more.
Also the size of the pipe is a factor in determining the size of the easement. An eight inch pipe probably doesn’t have the same effect on your property as a 42 inch line. The size of the pipe is really important.
The number of pipelines that can be put in that easement agreement is also an important factor. Normally landowners will just take it for granted that it’s only going to be an easement for one pipe. However, if it’s not specified, then it could be more than just one.
So these are key factors that you need to know, the number of pipes, the size of pipe, and width of the easement.
What Above Ground and Below Ground Facilities Are Planned
Another big factor is the above-ground facilities the pipeline company wants. What other things besides just placing the pipe in the ground does the pipeline company want to do on your property?
In my opinion, something above ground has a tremendous effect on your property. Above ground facilities certainly affect the property within the permanent easement area, and they also damage the remainder of your property.
Above ground facilities are also called above ground appurtenances. So, above ground appurtenances could be different types of valves or they could be compressor stations. Other above ground appurtenances or facilities are pipeline markers, cathodic protection test leads, and cathodic protection equipment.
What Access Roads Does the Pipeline Company Want
Access roads are an important factor. Is this pipeline company planning to build a temporary access road and where would the road be placed? A temporary access road would only last as long as the construction. Normally that’s 18 months to two years, or it could be less. The placement of permanent access roads and the scope of permanent access are also important factors.
Other Important Factors
What material will be passing through the pipe? That’s also extremely important. The pressure of the material that will be passing through the pipeline is important.
The different pipeline companies tend to have different philosophies or policies on compensation and timing of compensation. As crazy as it may sound, the same pipeline company will have different policies and strategies on different pipeline projects. Just because it’s Kinder Morgan or it’s Enterprise, they don’t always do what they did on the last project. An explanation I’ve heard is that the budget’s different on different projects. I’ve also been told that different managers or directors account for compensation differences. Who knows, but not all projects of the same company are treated the same financially related to compensation to the landowners.
Also, are there other options for routes for the pipeline company? If there are other options for routing, maybe routing around your tract of land, then that will also play into the compensation you may receive.
How and why? Think of it like a bottleneck. There may be protected land on each side. Perhaps there are wetlands or endangered species, and your tract is the only tract for miles and there’s no other route that the pipeline company can take. So the pipeline company will probably have an incentive to pay you more.
Now there’s always an economic point where the pipeline company will say they’re not willing to pay that much. They’re willing to go to trial and let a judge or jury determine just compensation to the landowner.
Hopefully this list of factors helps answer the question of what’s the going rate on a pipeline easement. Lots of factors come into play.
I always try to stress to landowners that your neighbor may have agreed to x amount for the pipeline easement, but his pipeline easement agreement may allow for many, many things that your pipeline easement doesn’t. Perhaps your pipeline easement agreement requires the pipeline company to do a lot of other things that constitute non-monetary compensation benefiting you the landowner.
So be careful when you want to try to make those comparisons. What’s the going rate for a pipeline easement in Texas? It’s a question that I get asked everyday, so hopefully this discussion can help provide some guidance to you all out there. Thanks.
Let Us Help You Through the Condemnation Process
This information is intended to to help inform you about the condemnation process affecting you as a landowner. However, we still recommend that you hire an experienced condemnation attorney who represents landowners. If you’d like to make an appointment with Philip, please call 800-266-4870. We have offices in Wharton County and help landowners all over Texas. Appointments can be in person, online or by phone.