Key Points: Landowners, pipeline look for agreementWritten by Christy Martinez
Although the eastern Wyoming landowner group Progressive Pathways, LLC spent much time and effort developing a detailed proposed easement for the company Oneok Partners Bakken Pipeline, they recently received the easement back, with substantial changes from the company.
The landowners devoted countless hours to producing a proposed easement to present to Oneok that included several major areas of concern: landowner liability, reclamation, abandonment of the pipeline, safety and compensation.
“They’ve not worked very hard at addressing our concerns at this point,” says Progressive Pathways member Pat Wade of Lusk, noting that liability is the number one concern of the members, of which there are about 125.
“We’re trying to limit the landowners’ liability, because we’re concerned that the pipeline company operates as an LLC, so the most any of its owners can lose is their investment in the company. If something really terrible happened, the landowner could become liable, which could possibly cost them their land, which is, for most of us, our biggest asset. We have to have our land to operate in agriculture, so liability is one thing on which we’re working really hard.”
Wade says abandonment is also a top priority.
“Right now they want to leave their options really open when it comes to abandonment, and our concern is that, as these projects age they generally sell, and to a company that’s probably less financially able to fulfill the requirements of the original agreement,” he comments. “If it’s a company that does not have the financial ability, they could walk away because they don’t have the money for proper abandonment.”
Wade says that, in doing so, the landowner could become liable at that point, so he and the others would like some assurances, ideally in a type of bonding.
“I don’t know if we’ll achieve that, but we’d like some assurance the pipeline will be decommissioned properly,” he notes.
The landowners are also working on reclamation language.
“We’re trying to minimize the scarring on our places, and return them back to their original productivity,” says Wade. “We have some concerns about how the pipeline is constructed and installed, and how it’s reclaimed, and also all erosion, noxious weeds and streams that may be polluted through erosion.”
Wade says the last thing the landowners are working on is compensation and negotiating an agreement.
“To some, that may seem the most important, but to many in our group it’s no more important than anything else,” he says, but adds, “The important thing to remember is that everyone else who is involved with the pipeline will do so with the hope of having some profit, and the landowner is the only one asked to give up anything, without having any way to participate in the profits. We’d like to negotiate an annual payment so a landowner can view the pipeline as an asset rather than a liability, and that will be a tough issue.”
“When this comes through, we as landowners have the liability, and everybody’s an LLC except for the ranchers along the route,” says landowner and Progressive Pathways board member Donley Darnell. “Everybody’s making money except for the landowners. When push comes to shove, the landowner supposedly gets the appraised value of their land, which isn’t making money. We get all the added risk and none of the benefits.”
Wade adds that compensation has not been discussed at all to this point, so people can’t assume the group presented an easement with a large price tag, which caused the company to reject it.
“We’re not willing to talk about compensation until we have the rest of the terms in place,” says Wade.
Another concern of the landowners is that Oneok could change the use of the pipeline after its construction.
“When we proposed our easement we wrote that the pipeline would be for one natural gas liquids pipeline. From the beginning Oneok has represented that’s what they wanted to build, but their changes to the easement are written so they could run anything that can be run through a pipeline, and they could switch the use. Once it’s in the ground, the landowners have no ability to weigh in on any of those things. It’s one of those red flag situations,” says Wade.
The original LLC board of Progressive Pathways has been narrowed to a negotiating committee of four members, which had a meeting with Oneok on Oct. 18 in Cheyenne. The Wyoming landowners were joined at the meeting by two representatives from a similar organization for the pipeline in Montana known as the Eastern Montana Landowners Group.
“When we sent our agreement they made the changes they’d like to see, and we’re a long way off from an agreement,” says Wade. “They took out all the language we wrote concerning construction and reclamation. They struck every bit of it, and that’s a huge concern.”
Wade says Progressive Pathways board member Steve Hayes of LaGrange made the point that Oneok has emphasized their consulting with different experts on the phases of the pipeline, and, when it comes to reclamation, the landowners are the experts who understand their places and the implications of the pipeline project, should the land not be properly reclaimed.
“We have several members who have won state and nationwide stewardship awards, and we’ve worked closely with Lisa Shaw and the Niobrara Conservation District for help with the reclamation language,” says Wade.
Darnell says the conservation, reclamation and mitigation portion of the easement includes not only how the company reseeds the land, but also how long the ditch is left open, fire suppression equipment during welding and how to honor and avoid paleontological sites.
Wade says the requests in the easement aren’t unprecedented.
“A whole lot of what we proposed is patterned off an agreement that’s already agreed to, signed and recorded in courthouses between a large landowner group and a large pipeline company,” says Wade. “What we’re doing is not setting a precedent. We’re trying to negotiate something similar, and we’re in hopes that Oneok could do at least as good, if not better.”
“We’ve put a lot of pressure on them, and when we’re not plowing new ground it’s difficult for them to say no, we can’t do that,” says Darnell.
Oneok has chosen a route for their project that avoids federal lands at all costs, because of the red tape and expense that is involved.
“In the end, Oneok appears to have the power to condemn their way through with this, and one of the requirements for condemnation is that the land is needed for the public good. If it’s for the public good, shouldn’t public land be used as much as possible?” asks Wade. “By avoiding federal land there are many permits they don’t have to get. As far as we can find out, the only permit they have to get is a stream-crossing permit through the Army Corps of Engineers, so the whole thing has no regulation or oversight. There’s no comment period, and there’s no opportunity for the landowners to weigh in.”
Wade says that recently Oneok stepped up its public relations campaign, meeting with county commissioners in the affected counties and interviewing with local newspapers.
“They’re representing the whole process considerably differently than the way we view it,” says Wade, noting that’s what prompted a letter to the editor for local papers from Wade and fellow landowner Danny Hanson.
The letter outlines the landowners’ opinions and goals, and also encourages new members to join with Progressive Pathways.
“Right now Oneok is stepping up their process, and they sent out a letter to every landowner that could be interpreted as somewhat threatening, so we’re hoping people will join with us as they receive that letter and see the limited success they’d have in negotiating on their own,” states Wade.