Easements

What is an Easement

An easement is an acquired privilege or right, such as a right-of-way, afforded a person or company to make limited use of another person’s or company’s real property. For example, the municipal water company may have an easement across your property for the purpose of installing and maintaining a water line. Similarly, oil and natural gas pipeline companies acquire easements from property owners to establish rights-ofway for construction and operation of their pipelines.

Why would the company approach me about an easement before the project is approved? 

Because of planning and lead time, the company may try to obtain easement agreements in advance. Also, a company must conduct environmental studies before it files an application with the Commission. For these studies to be as complete as possible, the company will try to obtain access to all of the proposed right-of-way. If Commission approval is ultimately denied, or the route changes, the initial easement agreement with the landowner is usually void (depending on the wording of the right-of-way or access contract). Further, disputes over the wording of an easement agreement are subject to state law.

Am I required to sign an easement? 

A FERC certificate is not required in order for a company to negotiate the acquisition of a storage lease or easement. However, if FERC has issued a certificate approving the creation of a new storage field (or expansion of an existing field), that indicates that the agency has concluded that the storage field is needed and is in the public interest. In accordance with the Natural Gas Act (a law passed by the United States Congress in 1938), the FERC certificate gives the company the right to ask a state or federal court to award the needed property rights to the company where voluntary good faith negotiation has failed. If the owner of the property/mineral rights and the company do not reach an agreement, the company can go to court to obtain the necessary rights through eminent domain. 

In such cases, the court will determine the amount that the company must pay to the owner of these rights. Similarly, if the storage field operations affect the surface property through construction of facilities or by reserving access rights, the company must also reach an agreement with the owner of the surface rights or go to court to obtain any necessary property rights through eminent domain. The court will determine the amount that the company must pay the owner of the surface rights. The state or federal court procedure is known as condemnation (or the exercise of eminent domain).

What authorization allows the pipeline company to use eminent domain? 

If the Commission authorizes the project and the necessary easements cannot be negotiated, an applicant is granted the right of eminent domain under section 7(h) of the Natural Gas Act and the procedures set forth under the Federal Rules of Civil Procedure (Rule 71A). Under these conditions, the landowner could receive compensation as determined by the courts.

Can the pipeline and the easement be used for anything other than natural gas? 

If the company wishes to install another natural gas pipeline under Commission jurisdiction, it must obtain additional approval from the Commission. Other utilities may wish to use an adjacent or overlapping easement, but they would have to obtain approval from you or from another permitting authority that can grant eminent domain (usually the state). Of course, you may agree to other uses.