It’s no shocker that oil and gas are major industries here in Texas. To accommodate this massive industry, we must have pipelines running throughout the state. While most oil and gas companies try their best to avoid disrupting private property, it’s not always the case.
When a pipeline must run through a landowner’s property, it’s known as an oil pipeline right-of-way or a pipeline easement.
This post will cover top FAQs and everything you need to know about building oil pipelines on private property.
What is right-of-way pipeline construction?
A right-of-way (or easement) is an agreement that allows someone to use another person’s property. For example, two neighbors could draw up an easement allowing one neighbor to build a driveway on the other’s property. It’s important to note that the easement holder doesn’t own the land—it simply allows them to use it for the intended purpose.
With that in mind, it makes sense that a pipeline right-of-way allows a company to run an oil or gas pipeline under a landowner’s private property. Though easements typically don’t have termination dates, that can vary depending on the oil company’s needs. Since there’s no end date, oil companies are responsible for performing all necessary maintenance and repairs on the pipeline throughout its existence on the land.
What about eminent domain?
Whether they’re with a neighbor or a giant corporation, all easements should be agreed upon and signed legal documents should be filed with the local or state government—but both parties don’t always see eye to eye when it comes to an oil pipeline right-of-way.
Eminent domain can come into play when the landowner and oil company can’t come to an agreement, and the government can force the property owner to allow the construction of the pipeline.
Laws regarding eminent domain vary from state to state, but for eminent domain to play out in a company’s favor in Texas, the corporation essentially has to prove that there’s no other feasible way for the pipeline to be built and that it’s absolutely vital to build the pipeline.
Texas courts have ruled in favor of both private citizens and large companies, but high-powered lawyers often win cases for large corporations.
How does a pipeline affect property value?
Eminent domain laws state that companies must pay landowners fair market value for right-of-way pipeline construction; however, that’s often not enough to be worth it for private citizens to agree to the easement. It’s estimated that an oil pipeline easement can reduce a property’s value by up to 40 percent!
What happens if the property is bought and sold?
As with any easement, the pipeline easement holder retains the easement after the property changes hands. Because of this, all land buyers should hire a surveyor to locate any pipelines on the property.
Do you need an oil pipeline survey?
If you’re purchasing land with an oil pipeline easement or you represent a company interested in right-of-way pipeline construction, then talk to our team at D.G. Smyth & Co., Inc. Thanks to decades of experience, you can trust that we’ll provide accurate surveying results.