There are numerous important considerations for landowners in negotiating these types of pipeline easements. This article will discuss a few of the key points landowners should keep in mind.
Does the pipeline company have eminent domain power?
The power of eminent domain allows the government or a private individual acting on authority from the government to take private property for a public use upon payment of just compensation. In many states, pipelines meeting certain requirements may have eminent domain power.
This is the first question landowners should consider, as it will impact their bargaining position. If a pipeline company does not have eminent domain power, the landowner can simply tell the company to take a hike if the landowner’s terms are not agreed to.
If, on the other hand, a pipeline company has eminent domain power, the pipeline company will be able to obtain the easement even over the objection of the landowner and, therefore, a landowner is in a weaker negotiating position.
Importantly, even where a company has eminent domain power, landowners still have rights and the ability to negotiate important provisions of the easement agreement.
Where will the easement be located on the property?
Any easement agreement should specify precisely where on the property the easement will be located. This may be done in a variety of ways, including the use of a plat, a sketch of the property with the easement highlighted, a formal metes and bounds description, or a description by words only. Landowners should ensure the easement location is clear in any easement agreement.
How many lines will be allowed to be placed in the easement?
Another important consideration is the number of pipelines that will be permitted in the easement granted by the landowner. Landowners should seek to limit the easement to only one pipeline.
Then, if the company wishes to place a second pipeline in the same easement area, the company will have to negotiate with the landowner again to obtain a second easement, resulting in additional compensation for the landowner.
How will the pipeline ditch be dug?
Landowners may want to request use of the “double ditch” method of digging the ditch into which the pipeline is placed. This method ensures that when the ditch is dug, the topsoil will remain separate from the subsoil and, when the line is covered up, the topsoil will be placed back on top of the subsoil.
What restoration requirements will be imposed on the pipeline company?
Landowners should set forth all restoration requirements to be imposed on the pipeline company. For example, landowners may want to require reseeding and establishing a stand of a certain type of grass over the easement area once the pipeline has been buried.
Similarly, landowners may require replacement or repair of any fences cut or damaged during pipeline construction. These terms should be expressly set forth in detail in the easement agreement.
How will compensation be calculated?
If an easement is taken by eminent domain, the landowner will be entitled to the fair market value of the easement area. Compensation for easements not obtained by eminent domain are valued based upon an agreed-upon price by the parties.
Additionally, in some states, “remainder damages” are recognized and allow the landowner to obtain compensation not only for the easement area taken, but also for the decrease in value that the easement may cause to the remainder of the property at issue. Landowners should carefully evaluate the compensation for any easement.
When will the easement terminate?
Oftentimes, easements last in perpetuity. Landowners may want to request a particular end date for the easement to be extinguished and the land controlled again by the landowner.
This can be done in various ways, including setting a specific length of time for the easement (30 years, for example) or by stating that if the company ceases to run product through the pipeline in the easement for a certain period of time, the easement shall terminate.
This provides landowners with knowledge of how or when the easement will cease.For a more in-depth discussion, I recently authored a pipeline easement negotiation checklist outlining key terms to be considered. 
- Tiffany Dowell
- Assistant Professor and Extension Specialist
- Texas A&M Agrilife Extension Service
