Questions to Ask Before Signing a Pipeline Right-Of-Way Agreement
Some landowners prefer to request a right-of-entry order from the Surface Rights Board rather than signing a right-of-way agreement with a company, even though they have reached agreement on all issues and on the amount of compensation. The reasons landowners prefer this are explained in Right-of-entry orders when landowner and company agree.
Before you decide whether to sign a pipeline right-of-way agreement with a company, it may be helpful to seek answers to the following questions:
- Have you read the AER brochure Proposed Oil and Gas Development
- A Landowner’s Guide (AER-07) and other relevant AER FAQs that the company’s land agent will have given or offered?
- The company’s land agent will have given or offered you these documents, together with the company’s information package, and outlined the right-of-way agreement.
- Have you read Pipelines in Alberta — What Farmers Need to Know?
- This publication from the Farmers’ Advocate office is available online or by calling their office.
- Does the agreement allow for additional pipelines to be constructed along the right-of-way in the future?
- If you wish to prevent this, you should ask for a clause limiting the right-of-way agreement to one pipeline.
- Will the pipe be left in the ground after abandonment? Does the agreement provide for the eventual clean up and abandonment of the pipeline and reclamation of the land when the pipeline is no longer in use?
- If you want the pipeline removed, you should inquire if this can be included in the initial agreement. (Alberta Environment does not recommend line removal where it causes significant additional disturbances.) You should also ensure that all liens that the company may have registered are removed when the pipeline is abandoned.
- Have you agreed how you want to settle any future issues such as poor vegetation establishment and reduced crop yield due to soil compaction, a sinking trench or damage to surface drainage?
- You may want to stipulate that the alternative dispute resolution process should be used as a first step, before escalating this through a legal process. The agreement should contain an arbitration clause that enables disputes to be settled under the Alberta Arbitration Act, without going to court.
- Have you read about compensation in Compensation and Surface Rights Access of this guide?
- It is important to negotiate and agree on compensation before signing the lease agreement.
- Do you want to request a right-of-entry order from the Surface Rights Board rather than signing a lease?
- Some landowners prefer to request a right-of-entry order from the Surface Rights Board, rather than sign a lease agreement, even if they have reached agreement with the company on all issues. See Right-of-entry orders when landowner and company agree.
- Is everything you have negotiated with the company included in the written agreement?
- The Office of the Farmers’ Advocate can provide advice on wording, if you need an addendum.
- Do you need to check with a lawyer or other consultant before signing the right-of-way agreement to ensure it is satisfactory?
- A lawyer or consultant knowledgeable about surface rights issues can help with negotiations.
- Is the pipeline in the best location, given the surface water drainage, water wells and other environmental considerations?
- You also need to consider whether the location of the line will affect future plans for farm expansion or the creation of a subdivision.
- What is intended to be transported through the pipeline (oil, diluted bitumen, natural gas, condensate, other)?
- Depending on the material to be transported, there may be other construction materials or operational requirements that reduce the risk of leakages or other accidents.
- How deep will the pipe be buried?
- Determine if you need to specify a minimum depth for the pipeline to prevent interference with farm operations, such as deep ploughing.
- If the pipeline will contain sour gas, has the company worked with other companies in the area to minimize the amount of sour gas infrastructure in your area?
- The AER has increased their proliferation requirements to limit additional sour gas developments in areas of development is already concentrated. Before a company applies to construct a new pipeline or processing facility, it must contact other operators in the area to investigate whether it is feasible to upgrade a facility or form a partnership with existing operators instead of constructing a new facility.
- Is the pipeline close to a water well?
- If so, ask the company to test the well before they start construction.
- How will the topsoil be protected?
- The agreement with the company should state how the topsoil will be removed, how it will be conserved to prevent erosion, and how the land will be reclaimed to the same condition that existed prior to the company’s operations. You should find out what the company will do to minimize soil compaction along the right-of-way and where heavy vehicles will be moving during construction.
- How will weeds be controlled?
- Decide if you want the equipment to be steam-cleaned to remove weed seeds before entering your property. Cleaning also prevents establishment and further spreading of soil-borne diseases such as clubroot, especially for canola crops. Take note of cleaning stations that may be closely situated to your lands.
- You may want to ask the company to obtain consent before using any chemical, pesticides or herbicides. This is especially important for certified organic farms, or if you use organic production practices.
- Do you require the company to construct any fences or gates to prevent livestock from straying?
- Ensure that the company is required to maintain and immediately repair any fences to your satisfaction. Include compensation requirements. You may also ask to be compensated for managing fences yourself, and for moving and feeding livestock at a separate location.
- Do any trees have to be felled?
- Tell the company what they should do with any trees that have to be felled and if you want merchantable timber, logs and firewood. Typical options for wood disposal are burning, mulching or a combination of both. Excessive mulch depth on the right-of-way may impact vegetation re-establishment. You may also want to include a penalty for trees that are cut or damaged without your permission.
- Does the company need any temporary workspace outside the right-of way while the pipeline is being constructed?
- If so, include this in the agreement, or sign a separate agreement for workspace use. Compensation for workspace should be valued similar to right-of-way.
- Do you want to specify that all travel and movement of personnel, equipment, vehicles, etc. occurs along the surveyed right-of way?
- You might want to include a penalty if the company’s activities extend outside the right-of-way without your prior approval.
- Will the company clean up quickly after the pipeline is constructed?
- The right-of-way agreement should require the company to quickly clean up the right-of-way, including removal of all stumps, rocks, roots and other debris. Also, clarify with the company how to dispose of waste (e.g. hauling or burning).
- Do you have any special requirements with respect to reclamation?
- You may want to specify how the land is reclaimed and whether you want the company to reseed the land using a specific seed type. You may want to indicate the date by which this is to be completed. The company should redistribute and level the topsoil, cultivate (to remediate compaction), prepare an adequate seedbed, and reseed the land where required. Any special requests cannot breach regulation(s).
- Does the agreement require the company to immediately notify you about any leak or spill?
- This is an AER regulatory requirement. In addition to this specific requirement, you will also want to be told how any leak or spill will be contained and cleaned up.
- Is any above-ground installation required on the right-of way?
- If so, you should ensure that it will be located in an area that causes the minimum inconvenience and will be clearly marked and that a surface lease is negotiated.
- Is the proposed compensation adequate to cover the crop loss, adverse effect, nuisance and inconvenience that will occur while the pipeline is being constructed?
- If there is any above-ground installation on the pipeline, you should arrange for annual compensation for loss of use and adverse effect, with the rental being reviewed every five years.
- Does the company agree to cover costs for any accidental damage that may arise due to the location of the pipeline or above-ground installations?
- It is a good idea to check that you are not liable for any accidental damage.
As explained above, should you be unable to resolve issues with the pipeline and company, as a result of asking the above questions or otherwise, the company must file a non-routine application as explained in Route selection.
If there are any outstanding problems once a pipeline has been constructed, such as
inadequate clean up of the right-of-way, drainage problems, or trench sinking, you
should first try to resolve the difficulties directly with the company. If this is not
successful you can contact the Farmers’ Advocate Office (see Farmers’ Advocate Office) or the regional
conservation and reclamation inspectors of the AER (see Reclamation and remediation certificates, and environmental assessments). Any leak should be
reported to the AER (see What the Alberta Energy Regulator does).
- ↑ This material is from the Pembina Institute publication 'Landowners' Guide to Oil and Gas Development, 3rd edition (2016)'
- ↑ AER, EnerFAQs: Proposed Oil and Gas Wells, Pipelines, and Facilities: A Landowner’s Guide
(2015), 9. https://www.aer.ca/providing-information/news-and-resources/enerfaqs-and-fact-sheets/enerfaqs-landowner.html. This link has been updated since the 2016 publication; the updated link may no longer contain the original information.
- ↑ Pipelines in Alberta: What Farmers Need to Know.
- ↑ AER, Directive 056, section 5.9.3.
- ↑ AER, Directive 056, section 5.9.3.
- ↑ “Clubroot is a serious soil-borne disease of canola, mustard and other crops in the cabbage family.” Alberta Agriculture and Forestry, Alberta Clubroot Management Plan (2015), 1.