Read this before signing easement

October 16, 2013 

Landowners contacted by Bluegrass Pipeline Partners LLC or the Williams Company about selling an easement across their property for the construction of a 24-inch pressurized natural gas liquids pipeline have questions about whether granting an easement is in their interest.

The products that will be transported are natural gas liquids, not the natural gas used to heat our homes. The liquids are a mixture of hydrocarbons that are flammable and combustible, can contaminate land and groundwater, and pose an asphyxiation risk if the pipeline leaks.

Landowners are wise to consult an attorney, insurance agent, mortgage holder, and tax preparer, because granting an easement may affect the value and insurability of property, tax liability for payments received, and mortgage holder's interests.

The easement language you may be asked to sign was written to benefit the pipeline company, and will likely not contain conditions that strictly limit the rights granted. Here are some provisions to consider:

■ Limiting the number, size, and pressure of pipelines that can be constructed and the product that may be transported.

■ Limiting other uses of the easement.

■ Requiring landowner approval of any assignment of the easement.

■ Limiting the duration of the easement, defining clearly when it will be deemed "abandoned," and whether the pipeline will be removed and the easement reclaimed.

■ Defining how the company will access the easement, and whether notification is required before it comes on the property for maintenance and repair.

■ Limiting the above-ground facilities, such as valves and pump stations.

■ Setting the frequency and manner of inspections for leaks.

■ Maintaining sufficient insurance against personal or property damage and injury to third-parties from installation, operation, and removal of the pipeline, including damages from leakage or catastrophic incidents.

■ Setting the depth of cover over the pipeline, and requiring that depth be maintained.

■ Requiring, before construction, independent testing of the quality and quantity of all streams and groundwater resources, and pre-blast surveys of all structures.

■ Establishing the precise location and dimensions of temporary and permanent easements.

■ Requiring the easement agreement be co-signed by the parent companies of the Bluegrass Pipeline Partners (Williams Co. and Boardwalk Pipeline Partners), since the parent companies should stand behind any agreement to assure sufficient assets are available to address and resolve any problem that arises.

■ Requiring that the landowner be indemnified and the company provide representation if there is a third-party claim made relating to the pipeline, including any accidents or leakage.

No landowner should sign an easement because of a direct or implied threat of eminent domain (condemnation). The Kentucky Attorney General, Energy and Environment Cabinet Secretary, and others do not believe that eminent domain powers exist for this pipeline project.

We encourage you not to rush into a decision to grant an easement. Once an easement is granted, it is unlikely you will be able to change or add terms or conditions.

An information sheet landowners may want to discuss with an attorney in negotiating an easement agreement can be found at www.kyrc.org.

Terry Geoghegan is Commonwealth Attorney for Nelson, Hart, and Larue Counties. Tom FitzGerald is director of the Kentucky Resources Council.

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