Gas pipeline easement help needed (MISSISSIPPI)

Landman Discussion
1

My question involves an easement in the state of Mississippi. A power company wants to run a 16 inch carbon dioxide pipeline from a coal powerplant across land (two separate tracts)that we purchased for a timber plantation. They made a initial low ball offer and I rejected it. I’m military and am finishing a career and looking forward to retiring on the land around my family.

We bought the land approx 200 acres 3 years ago at a bargin because the timber had already been cut and not replanted. We are not wealthy, and have a large monthly note. We cleared the land and replanted loblolly pines hoping to harvest in 20 years at retirement, then replant for our children. The power company already had a 125 foot easement across the entire property with high tension power transmission lines. Now, they want another 50 feet for the pipeline along side the powerlines. They hired a realestate company to deal with all of the landowners in the pipeline path. They claim that they will only use a total of 3.5 acres and have offered about $7500 (the land value only).

They invited me to counter offer their lowball offer (state law gives them the right to the easement, but they must pay fairly). I am not skilled at figuring how much to ask for, but am not interested in just breaking even on what I do not want to begin with. My trees on a part of what they will destroy are only 2 years old, and I’ve spent thousands clearing some of what they will use now. They say the timber (saplings) have very little value, but what about in the future? Also, I already pay taxes on about 8 acres they use and now it will be 3.5 more…I’ll pay taxes on this land that I cannot use…forever. It doesn’t seem fair.

Also, now, they want to appraise the tracts and get a per acre price, however some is swamp and not worth what the prime dry land that they want.

We wanted to eventually build a subdivision on the front highway frontage, or sell house lots. Will the pipeline decrease value? Is it dangerous or just a turn-off? (there are only 4000 miles of new technology carbon dioxide pipeline in the entire US).

Can anyone please tell us what we need to consider? I’m afraid that I’ll hate my decision later. Could we ask for yearly pay from their profit? Free electricity from the powerlines? They pay the tax on acres they use? And what is good $compensation just from the fact of they are putting a pipeline across the middle of my land? I’m well aware that they want it as cheap and permanent as possible as soon as possible. We honestly planned to suryey and either sell parcels for homes or build and sell homes. I told the pipeline / power company that we intended to do exactly that and they askes twice for our plans…I had to state that we did not have any yet, but planned to begin in December. They are having an appraisal done right now. Should we proceed with a survey and development plans or would it look fake?

After reading a Mississippi case law, I think that they cannot use the existing easement because it is for a different product (power and now gas). At least they have to pay again. I’ll check as to whether they can use the existing easement.

Also, their proposed contract wants the easement given to sucessors (I’m taking this to mean any other company who buys them out can use the easement without re-negoitating). Can we non-assign the easement only for the original power company? Can we lease or place terms on the easement?

Thanks.

2

I will take a short stab.

First, find out what the original easement covers.

Second, find out if the CO2 line has rights of condemnation,

Third, get a really good ROW agreement.

Fourth, get a really good Real Estate Attorney based on your research on 1-3 above.

Can you grant term easements with CPI renegotiation? Sure.

3

Find out from some of the major timber companies in your area what they get Per Acre for a pipeline easement. Don't sell is by the rod or foot. It is the amount of acreage that matters on the price.

About 3 years ago I had a company wanting to build a gathering line through my property. They offered $3,000 per acre. I saw the line was going through a large timber company property just north of mine. I called the company and they told me that the get between $10,000 to $13,000 per acre for the right of ways. I asked the company that is they were going to pay that to the timber company then that's what I wanted. They agreed and payed me. If you don't ask they are not going to give it to you.

Local realtor's are most times payed to testify in the pipeline company's favor on disputes in East Texas. It is a crooked process.

4

Re: ROW agreement - why not cross out everything you do not agree to and amend to your liking. They will counter if not acceptable.

The following are a few additional issues you might want to consider:

  • Ask for a copy of their field Health, Safety, Enviromental (HSE) procedures for pipe ruptures
  • Ask to include a clause stating that they will be responsible to seek out and warn your family of potential dangerous conditions when the foreseeability of harm is present
  • Compensate you for all damages for each entry
  • Remediate your land to its original condition upon each entry
  • Re: Settlement and Release: request a Mutual Release of all claims, up to the date of settlement, with no possibility of separate and distinct procedural tracks now or in the future
  • Ask for compensation for nuisance and inconveniece
  • Request a clause that they will eliminate ALL unreasonable entries, i.e., a restriction of usage to other points in the line from your lands
  • Request that they pay for any new roads or road usage (off the ROW)
  • Counter a smaller size easement
  • Request 3 appraisals from 3 different appraisers or tell them you want to select the appraiser (but they pay)

I have enclosed some interesting Mississippi reading:

Challenging the Mississippi Referendums Posted on September 19, 2011 by Alan Ackerman In November,

Mississippi voters will decide whether to amend the state’s constitution to restrict the use of eminent domain for private economic development, as so many other states have done since the U.S. Supreme Court’s 2005 decision, Kelo v. City of New London. Opponents challenged the eminent domain amendment as unconstitutional, because it would “alter the state’s Bill of Rights.” The Mississippi Supreme Court has decided to defer its decision on the matter until after the people vote on the proposal. Realistically, a bill of rights is designed to protect citizens.

Restricting the use of eminent domain would only enhance these protections, especially because property is one of the fundamental rights protected in the U.S. and state constitutions. It is surprising that the Mississippi Supreme Court did not immediately dispense with the weak argument that augmenting the Bill of Rights “unconstitutionally changes” the Bill of Rights. Most likely, this amendment will pass in November. Hopefully, the Court does the right thing when it considers the issue after the election.

The Scott County Times :

The justices did not decide on the constitutional merit of the argument made by opponents. Instead they deferred the question until after voters express their preferences in November, saying the argument will be moot if voters reject the initiatives. Gov. Haley Barbour and his economic development chief, Leland Speed, have claimed that existing state laws and procedures sufficiently protect private landowners from unwarranted use of eminent domain and that the amendment could cripple major job-creating projects in the future. They are not carrying the day, however, in the court of public opinion.

Mississippi is determined to become the 44th state to restrict eminent domain since a controversial U.S. Supreme Court decision in 2005 gave local and state governments essentially the right to decide the best use of private property. Thus, after the Nov. 8 vote, the same constitutional question that opponents of each initiative have separately raised will be tossed back to the state justices: Are the initiatives illegal because they alter the state’s Bill of Rights? The justice are eventually going to have to answer that one. They have merely decided not to answer it yet.

Good luck.

Pat

5

Very helpful information! thanks all. For now, an attorney told me to get busy now with my future plans to get a development plan for the highway frontage tract. He thinks that having plots for homes surveyed will be helpful, vs just saying that we planed to sell acerage on the hwy frontage tract. I'm about to get a basic survey with some 2 to 5 acre lots.

Also, I noticed that the company wants to have the right to use the easement for transmission of about anything that they may want to in the future instead of just the present product, and they want any companies that they sell out to, to have the same rights.