Good contracts: landowner explains pipelines problems
Torrington – Glendo area rancher Rocky Foy spoke on his experiences working with oil and gas companies during the Goshen County Oil and Gas Development Workshop in Torrington on March 11.
“My grandpa homesteaded our place in 1910, and a mere 13 years later, in 1923, the Sinclair Pipeline Company wanted to put a pipeline across us,” said Foy, who has 11 pipelines and two power lines running across his operation today.
“I’m going to share what’s happened to us. We’ve been dealing with pipelines a long time. I’m going to talk about more of the negative things, just so you’re aware of what can happen, and prepare yourselves to deal with these things,” explained Foy.
He said most rights-of-way for the pipelines are three-and-a-half miles long, and he figures he has between 275 and 300 acres of rights-of-way on his ranch, not including the phone and electric lines, or actual roads.
“There’s the trash. When they’re constructing a pipeline and have so many workers strung out for two or three miles, inevitably there will be trash – that’s just part of it. We’ve also had the gates left open and our cattle have been mixed. People come in when it’s muddy, without notice, then don’t want to fix roads and those types of things. We’ve even had a helicopter fly over when we were trying to trail a bunch of cows one day,” said Foy.
He added that one thing he’s done to mitigate some of those issues is to have companies give at least 24-hour notice prior to coming in. This allows him to schedule activities, like moving cattle, around incidents such as helicopters flying overhead.
“In the mid-1960s we had a couple welders welding and they caught the place on fire. It was in the fall, and it burned all our meadows, all the hay stacks and fences. It burned the back off the corral and almost burned the house down. It was over three days before they got it out. Those kinds of things are devastating,” commented Foy, adding another fire was set with a grinder in later years.
“They’ve also taken the first pipeline out, and at that time all the workers on the pipeline drove their own vehicles on the rights-of-way, and they all had a camper on the back. That fall we ended up short quite a few calves, and I imagine that’s about where they had to go.
“Since then we’ve put in new contracts that we have the right to search any vehicle, at any time, that’s on our place,” noted Foy.
“They’ve taken more work space than they said they would. We’ve been condemned, and they let weeds take over, despite it being in the contract that they would control them,” continued Foy. “By the time they decided to control the weeds, they were off the right-of-way and in the creek, and were so bad we ended up buying 150 head of goats. We ran those goats for four years trying to get the weeds out of our creek.”
However, he said the biggest problem, which is also an ongoing issue, is having 10 pipelines going across him in one corridor, which ranges from a half mile to 100 yards wide.
“We have a road down the middle of that, and we said they could use the road, but we want 24-hour notice, and don’t come out in the mud, shut the gates and help maintain it. ‘If you do that you can use it,’” said Foy of the road, adding he considers that a fair deal.
“If they all wanted to use their right-of-way, you can imagine what it would be like. With 10 pipelines running side by side, we would have 10 roads, 10 gates at every fence, side by side, and so on. It’s ridiculous, so we let them use that road, and I ask that when they get off in the grass I get compensated because I sell my grass through pounds of beef, and I want to be compensated when they ruin it.
“Every time a worker or sub-contractor causes damage, it’s up to us as the landowner to go out and see what kind of damage they’ve caused. Then we go call the landman, set up a meeting with him, go back out with him to assess damages, and they see what we think is fair. Then we start haggling, and we never agree,” explained Foy.
“It’s just a constant battle, because our contract isn’t good enough. We have good contracts, but not good enough,” he added.
“I want to tell you to protect yourself with the contract. That’s your only protection, and it’s really frustrating for us because we’re trying to ranch, and it seems like we’re on the phone and all we’re getting done is haggling with these guys. It doesn’t have to be that way – when you make your contract, do it right, don’t do what we’ve done. I shouldn’t have to give up how I make my living so they can make theirs,” said Foy.
“Each pipeline is different and each landman has his own policy and personality, and usually the less they pay for damages, the better they look and the faster they get promoted,” noted Foy. “If there’s one we get along with it seems he only lasts about a year, then there’s another one.”
He said the company a landowner signs with today might be different tomorrow or next year, too.
“I don’t know how many times lines have been bought and sold that are on our place. Sometimes it’s so rapid we can’t even keep track of company names. We’ve had companies come in and build a new pipeline, and trade that with another company, and it goes from having crude run through it to a gas line,” explained Foy.
“With the 11 pipelines and two power lines it seems like all we’re doing is dealing with someone on our place. They don’t want to compensate us for damages or our time. All we ever asked was for the negotiations and compensations for damages to be fair. Divide and conquer, condemnation and scare tactics have been the very norm. It’s my sincerest hope that by sticking together, and using the landowner guidelines, that you won’t have to endure these hardships,” explained Foy.
He suggested working with neighbors to develop a collective bargaining strategy, hiring an attorney and splitting the cost, and trying to get an annual or set payment for damages, so landowners aren’t constantly spending time checking for damages and haggling with companies, as a few ideas to seriously consider as a community.
“If you have a fair payment, and a solid contract that will hold up in court, and they reclaim your ranch back to what you deem satisfactory, that’s a good deal,” concluded Foy.