There’s another pipeline spill, this one out in California. The picture below is not from that pipeline, of course.
While we need the pipeline projects that are planned for West Virginia, we also need to be sure that the work is done well so that we don’t end up with leaks and spills. I don’t want to see what a 42-inch gas pipeline would do if it ruptured. There’s going to be one going in not too far from where I live. It’s become personal. The dangers are real, and should be looked at closely.
The Intelligencer has a nice article about the major pipeline projects that are ongoing in the State of West Virginia. It’s short, but worth the read, and a good starting point if you’re not familiar with everything that’s going on.
So far this year, there have been seven pipeline ruptures in West Virginia. The average most years is four. At fault is an abnormally wet spring, according to this article.
Also pointed out in the article, though this is hardly news to anyone in the industry, is that there are not enough pipeline inspectors in West Virginia. We have five, and we have roughly 14,000 miles of pipelines. Each inspector would have to inspect about 7.6 miles of pipeline 365 days a year in order to inspect every pipe once a year. That’s just not happening. We could really use a few more inspectors.
Yesterday evening, FERC held a meeting in Jackson’s Mill, West Virginia, to take comments from the public on the proposed Mountain Valley Pipeline. We were unable to attend, but Roger Adkins from the Intermountain wrote an excellent article.
The Mountain Valley Pipeline is going to have environmental impacts, including water quality, erosion issues, safety, and the beauty of the property that it crosses. Some of the impacts will be short-term, others will be generational. Water and erosion impacts will exist mainly during the construction and reclamation process. Trees will be cut down, trenches dug and refilled, and rights of way maintained so that only grass and small bushes can grow there. All of those things will affect water runoff, surface water quality, and stream water quality. Safety and beauty will be factors for as long as the pipeline is there. A 42-inch pipe represents a huge risk if an explosion occurs. Pipelines don’t explode often, but when they do, it’s catastrophic. I wouldn’t want to be within 1000 feet of one if it exploded, or even if it developed a small leak. The right of way is going to be maintained in a constant state of clear cut, in part to help avoid the risk of leaking and explosion, but it will be an obviously man-made scar on the natural, wild beauty of the West Virginia mountains. The right of way will exist for as long as there is gas to transport, which is likely to be for generations.
On the other hand, the Mountain Valley Pipeline is also going to have economic impacts, and they will be enormous. Right now there is more gas in the Marcellus/Utica region than existing pipelines can handle. Wells are shut-in because producers can’t get a good price for the gas, in part because the transportation cost is so high ($1/MCF) because the demand for transportation service is so high. Demand for gas is growing, and will continue to grow, but our ability to transport it is limited. We really need this and other big pipeline projects for gas development. As pipeline projects are completed, the cost of transportation will go down, and more gas will flow out of the ground, allowing for more royalties to be paid. The money that comes into the state from this pipeline will benefit everyone indirectly.
Indirect benefits don’t get people excited, though. West Virginians would be more excited about this project if more of them could look into the future and expect to be paid royalties. Unfortunately, many West Virginia oil and gas rights are tied up in heirships, and those heirs are scattered around the United States. The huge majority of them have no idea that they own oil and gas rights in West Virginia, and only own a tiny fraction of an oil and gas right. West Virginia needs a Dormant Minerals Act, but that is a subject for a separate post. The point is that not enough West Virginian’s are going to directly benefit from this pipeline project. Surface owners will be compensated for disturbance to their property, but neighbors and communities won’t see direct benefits. They will be able to see the gap in the trees going across hilltops and hollers.
We supporte these big pipeline projects, but we also think it’s important to know what all the consequences and impacts are going to be. Forewarned is forearmed.
The U. S. Forest Service has approved a survey through the Monongahela National Forest for the Atlantic Coast Pipeline. The survey will take a year, and is just one in a large number of steps that the Pipeline will need to take before getting approval.
There’s an interesting article over at Environment & Energy Publishing that puts forth the premise that a lack of pipeline infrastructure is what’s really slowing down the growth of shale fracking. I think they’re right. Of course, once pipelines are in place, consumption will need to increase, but consumption will increase if the pipelines can be put in place. There’s too much demand for cheap, clean energy, and natural gas offers the best balance of clean and cheap right now.
The plot thickens, as they say. Actually, people are just expressing their opinions about the MVP, and getting those opinions in the news. It’s still interesting stuff.
The thing that interests me is that the “expert” was quoted in the article as saying that the traditional price for pipelines was a dollar per foot. I think he was probably misquoted, as the traditional price was a dollar per inch per foot. I think the reporter just missed the “per inch” part. For a 10-inch pipeline, you would get ten dollars per foot. So if the pipeline crossed 100 feet of your property, you’d get $1000.
The traditional price is definitely low these days. I’d say that two dollars per inch per foot is the starting point, and I’ve negotiated upwards of three dollars per inch per foot in the past.
One other very important point that the article makes is that these pipelines are going to be here for decades. A one-time payment is not appropriate for such lengthy agreements. There needs to be an annual or monthly payment of some sort, even if it’s small. A periodic payment will assure the landowner that the pipeline is still in use. If the payment stops coming, the landowner will be able to assume that the pipeline is no longer in use.
One idea that the article doesn’t point out is the possibility of getting wheelage paid. Wheelage is basically a royalty on the gas that passes across your property. Wheelage would work to accomplish the same goals that periodic payments would.
There are a lot of other things that a landowner could negotiate for in a pipeline right of way setting. Get the advice of an attorney who is competent in this area before you sign a pipeline right of way agreement. If you don’t already have one, give my office a call at 304-473-1403.
I’d like to point out that the pipelines in the pictures above are much smaller than the MVP will be. Those are probably 36-inch pipes, and the MVP will be 42 inches.
People are lawyering up over the Mountain Valley Pipeline. A while back, the MVP sent out letters to property owners saying that if the property owners didn’t allow the MVP surveyors onto their property, MVP would sue. A few people took initiative and filed a suit asking that the MVP not be allowed onto their property. Now MVP has filed suit asking to be allowed onto their property, and that of 100 other people who have refused access. It’s an interesting question, whether the MVP can force people to allow surveyors under the eminent domain laws. Certainly, Federal eminent domain won’t apply because the MVP hasn’t been approved by FERC yet. State eminent domain laws might, but the surface owners’ argument is interesting. West Virginia eminent domain allows eminent domain to be exercised for the public good, and since the pipeline is just passing through, there won’t be any good done to the West Virginia public. If you’re interested in more details, the article over at the Register Herald is worth a quick read.