If Your Property is Affected/Impact to Homeowners

 

Access to property for surveys-

Kinder Morgan/Tennessee Gas Pipeline representatives have been requesting permission to ‘survey’ private, conservation and municipal properties across Massachusetts and into New Hampshire since January.

The survey request is one of the steps to determine a route for a high-pressure natural gas transmission pipeline as part of the proposed ‘Northeast Direct’ Project (formerly the ‘Northeast Expansion Project’) (source).

  • The survey requests follow an earlier preliminary mapping of the route: ‘The first step is for maps and aerial photography to be used to identify possible corridors for the pipeline. Next, the names and addresses of landowners along the preferred corridor are identified. Once the landowners in a county are known, each landowner will be contacted by a land agent.’ (source)
  • This land survey is NOT a traditional metes and bounds property survey to determine lot lines, easements, etc. This survey could involve heavy machinery digging up your land as well as clear-cutting areas that the pipeline could pass through.
  • Part of this survey involves the landowner signing a waiver to allow Kinder Morgan/Tennessee Gas to access their property. By signing this survey you allow Kinder Morgan/TGP full access to your property. This survey is also designed to protect Kinder Morgan.
  • Kinder Morgan will ultimately try to secure a permanent Right of Way (ROW).’Rights-of-ways and easements provide a permanent, limited interest in the land that enables the pipeline company to install, operate, test, inspect, repair, maintain, replace, and protect one or more pipelines within the designated easement.’ (source)

If you have signed the survey, you may rescind it. You can print an example of a rescind letter here: Letter to Rescind.

Should Kinder Morgan not have the required signatures for starting the surveys, they may next try going through the Massachusetts Department of Utilities (DPU) to gain access to land. For more information on this process, please visit our Eminent Domain/MA DPU and FERC page.

Pipeline Construction – Pipeline Construction

‘In addition to the permanent easement required to operate and maintain a pipeline after it is constructed, the company also will require a temporary easement during construction.  A permanent easement typically is about 50 feet wide and a temporary easement typically will range between 50 to 75 additional feet depending on the size of pipeline; larger pipelines require the use of bigger equipment and more room to operate.  The amount of workspace required is also dependent on the type of terrain that will be crossed and any special construction requirements.’ (source)

  • The first step of construction involves marking the limits of the approved work area (i.e., construction ROW boundaries, additional temporary workspace areas) and flagging the locations of approved access roads and foreign utility lines. Wetland boundaries and other environmentally sensitive areas also are marked or fenced for protection at this time. Before the pipeline trench is excavated, a survey crew stakes the centerline of the proposed trench.
  • Before clearing and grading activities are conducted, the landowners’ fences (if any) are braced and cut, and temporary gates and fences are installed to contain livestock, if present. A clearing crew follows the fence crew and clears the work area of vegetation and obstacles (e.g., trees, logs, brush, rocks).
  • When rock or rocky formations are encountered, tractor-mounted mechanical rippers or rock trenchers are used to fracture the rock prior to excavation. In areas where mechanical equipment could not break up or loosen the bedrock, blasting is required.
  • Prior to or following trenching, sections of externally coated pipe up to 80 feet long (also referred to as “joints”) are transported to the ROW by truck over public road networks and along authorized private access roads and placed, or “strung,” along the trench in a continuous line. (source)

Setbacks –

  • The primary goal of pipeline easement setbacks is to protect pipelines from third party damage, thus lessening the likelihood of pipeline ruptures, with resulting injuries and property damage. (source).
  • In the meeting of the Pepperell BOS in April, Kinder Morgan stated that they would consider coming within 25 feet of a home.

‘……there are no federal laws or regulations to ensure that houses and commercial buildings are constructed a safe distance away from pipelines. This lack of a so-called “setback” regulation raises particular concerns when it comes to natural gas pipelines, which, if broken, can burst into flames causing huge fireballs.
“There aren’t any regulations at all about setbacks. You can build a house right next to a pipeline,” Carl Weimer (executive director of the Pipeline Safety Trust) says. The only rule regarding setbacks is that a landowner cannot build on the right of way easement used to build the pipeline, Julia Piscitelli, a PHMSA spokesperson says. “Generally, pipeline burial locations are determined by local, county and state ordinances,” she said. (source)

Encroachment –

  • (1) A human activity, structure, facility, or other physical improvement that intrudes onto a transmission pipeline right‐of‐way.(2) Encroachment refers to the unauthorized use of a right‐of‐way in violation of the easement terms. (source).

Pipeline operators generally will acquire the rights to the minimum amount of easement or right-of-way needed to construct and maintain a transmission pipeline. Operators generally are not bound to consider land use issues beyond that operational boundary. If they were, the land cost effect on energy distribution would likely be significant….

‘It seems that, long after the initial developer/builder is gone, that extra land in the back yard (which is, in reality, a hazardous pipeline easement) becomes a good location for a pool, shed or other use, sometimes without any regard for risk.’ (source)

Personal safety concerns –

  • Accidental pipeline releases can result from a variety of causes, including natural disasters, excavation and other outside force damage, internal and external corrosion, mechanical failure, and operator error. And, although transmission pipeline incidents are infrequent, they do have potential serious consequences that may significantly impact the general public. (source)
  •  ‘A 2002 law mandates the inspection of pipes in “high consequence areas” — regions near natural resources like rivers, or populated areas like towns or cities. But because only portions of pipeline in the high consequence areas must undergo safety inspections, companies are under no federal regulatory obligation to adequately or consistently inspect thousands of miles of pipeline outside of those areas.’ (source)
  • Many easements are only 50 feet wide. That’s not enough to ensure safety…. For example, a 30-inch pipeline operating at 1,000 pounds per square inch of pressure — a common pipe — would have an “impact radius” of about 660 feet on each side of the pipeline….(source)

See also: The Pipeline Safety Improvement Act of 2002

Pipeline and Right-of-Way Maintenance –

  • At the Hollis BOS meeting with Kinder Morgan in April 2014, they were asked about the use of odorants in the transmission lines to alert residents if there was a leak at any point. They said that they did not add odorant to the transmission lines, but did at the ‘city gate’. (From AGA.org) “When the natural gas in a transmission pipeline reaches a local gas utility, it normally passes through a gate station…Then an odorant, the distinctive sour scent associated with natural gas, is added, so that consumers can smell even small quantities of gas.”

At the Pepperell BOS meeting of May12, they said that they did add an odorant to the line. We are looking into this further to determine which is correct.

  • If a pipeline is put in place, some of the maintenance used on pipeline rights-of-way include the use of herbicides/pesticides. At the Pepperell Board of Selectman’s meeting on May 12, Kinder Morgan reps stated that  they use spot spraying in some locations and mow in others. They did not discuss how they maintain boggy or marshy areas that are not accessible by mower.
  • According to Kinder Morgan, the Tennessee Gas ‘5 year vegetation management plan’ document found on the mass.gov site predated Kinder Morgan’s acquisition of Tennessee Gas from El Paso Corp., which was finalized in May of 2012. In the two years since Kinder Morgan have bought TGP, this is still the only and most current data available on the mass.gov site outlining TGP’s right-of-way management plan. (You may also find this information in the mass.gov EEA section Vegetation Management & Yearly Operation Plans  – scroll down to Tennessee Gas Pipeline – Vegetation Management Plan (2011-2015). This plan does allow the use of chemicals in maintaining the right-of-ways (ROWs).)
  • Aircraft (helicopters/planes) are used to monitor the pipelines from the air as well.
  • ‘Smart Pigs’ (source) are used in the transmission lines.  According to the site smartpigs.net, (listed as a ‘fun fact’) they are called PIGs because “it is an acronym for Pipeline Inspection Gauge”, but “it is said that it is also because of the squealing sound they make when running through a pipe. This is especially true of the cleaning pigs used to clean pipelines.

Property Value Concerns –

According to a June 18 article in the Daily Hampshire Gazette’s ‘Gazettenet.com’ —-
‘Local experts who are investigating the legal ramifications of the Tennessee Gas Pipeline proposal for its Northeast Expansion project say allowing a gas pipeline on your property could put you at risk of technically violating your mortgage agreement.
A provision in the Fannie Mae and Freddie Mac mortgage agreements include sections that prohibit properties from storage or release of “hazardous substances” on the property in question, or to transfer part of a property “or a beneficial interest” without prior permission of the lender.
Many residential mortgages are sold to Fannie Mae or Freddie Mac on the secondary market, so their terms apply, said Mark Burton, a Conway banker who has worked at Fannie Mae for more than a decade and a half…’ (source)

  • The effect of the pipeline easement is measured by the market.  Depending on the size of the pipeline, size of the easement, how it is located on the property, the size of the property, property use, etc., the impact range could be nominal to substantial.  To put this in numbers, it could be as little as 50% of the easement land value, or up to 30% or more of the whole property value.  The more intrusive the easement on the land (ex. – runs diagonal across the whole property vs. just down the fence line), the more impact it will have.” (source)
  • Valuing a property with an easement  —“VALUATION OF THE REMAINDER —The remainder is appraised in the after scenario because it is now burdened with the easement. The remainder consists of all property outside of the acquisition area and the underlying fee simple interest. Paired sales analysis is the proper way to measure the impact of the easement. By comparing properties similar to the subject with an easement to similar properties without an easement, an estimate of the differences can be abstracted.” (source)
  • ‘The market value of easements does not relate to the value to the user. The “use” of highest and best use is the economic use of the property without regard to the benefits to the condemnor…’ (source)

The Federal Income Tax Code treats proceeds received for granting the easement (the sale of an interest in the property) as long-term capital gains if the Landowner owned the property for more than one (1) year before granting the easement. These proceeds are subject to Federal income tax in the year received. But, proceeds received as compensation for the damage done to the property by the pipeline’s presence lower the Landowner’s basis in the property (the amount the Landowner paid for the property). Federal income taxes are not due on the damages portion of the proceeds until the Landowner sells the property. (source)

The property owner is still responsible for property taxes on the Right of Way.

See also: IRS publications – Involuntary Conversions
Insurance Journal

Read about Current Exxon Mobil’ s CEO’s objection to a proposal for a fracking water tower installation here – Exxon Mobil CEO: No fracking near my backyard

Right of way: future use –

‘Most of this pipeline construction is performed by subcontractors, not by the pipeline company with whom the landowner reached an agreement or the pipeline company who took the easement by condemnation. This often means that the landowner’s agreement with the pipeline company may or may not be honored in the actual construction process, leaving the post-construction easement in less-than-satisfactory condition.’ (source)

In a standard Easement Agreement, the Pipelines Company’s Employees can enter the property at any time to conduct operations. Many Landowners want to limit when the Pipeline Company’s representatives, employees, or contractors (collectively “Employees”) can enter their property….Landowners can also ask for notice of upcoming accesses. (source)

Unless the easement states differently, the company can place facilities wherever they want. Therefore, landowners should restrict the existence, number and location of surface facilities as much as possible. (source)

For Additional Information, see:
Pipeline Easements-Things To Consider Before Signing
Pipeline Engineering and Safety Division – MA Department of Energy and Environmental Affairs
Negotiating Pipeline Rights-of-Way in PA
Texas Landownders Win Judgement Over Lower Property Values

Read more about the Federal Energy Regulatory Commission here – What FERC Does and FERC: Natural Gas

Kentucky fights back —
Note:  This is regarding a pipeline that would carry natural gas liquids (LNG) through Kentucky, so they could say it didn’t fall within in the federal (or state) natural gas law provisions. However, the pressure of the protesters led to a successful stoppage of the pipeline.
Judge Issues Ruling Stating Pipeline Company Can’t Use Eminent Domain
Pipeline Builders Halting Kentucky Project

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