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Opinion: Texas landowners subsidize pipelines and powerlines

by | Sep 20, 2018 | Opinion

There is no question, pipeline and transmission line projects are necessary to supply our rapidly growing state. The electric transmission capacity ensures our lights stay on and our homes stay cool during the hottest months of the year. Pipelines carrying oil and gas supply our fuel and a wide array of petroleum-based products, helping feed a booming Texas economy.

There is, however, a darker side to this pipeline and transmission line development. Every year more Texas landowners find themselves in the path of pipeline and transmission line projects.

Most of these companies have the power of eminent domain and can condemn by force the land they want. They are common carriers, meaning their pipeline or transmission lines are available for use by other companies, even though they profit from the projects.

Unfortunately, landowners facing the threat of eminent domain stand little chance of being treated justly or being paid a fair price for what is taken from them.

Some pipeline and transmission line companies are better than others, but profits often outweigh the rights of landowners who must sacrifice their property for the public good. Lax oversight and little transparency in the process also create fertile ground for abuse.

For instance, it is common for companies to hire right of way agents to secure the easements necessary for their project. Frequently, the agents are given a set budget and then allowed to keep a portion of the leftover money if they come in under budget. It’s hard to expect a fair offer from someone when they stand to pocket the difference.

We know condemnors hold a powerful tool to keep land costs low. Intimidation. The threat of being sued, having to hire an attorney and go to court are strong incentives for landowners to take less than they’re owed and accept inadequate terms and conditions.

We also know the energy sector has teams of attorneys ready on retainer to counter any efforts by landowners to seek a better deal.

Something must change. As landowner organizations, the Texas and Southwestern Cattle Raisers Association, Texas Farm Bureau and Texas Wildlife Association have joined forces to campaign for reforms that create a better and more equitable eminent domain process.

We started the reform process during the 2017 Texas Legislative Session but encountered overwhelming opposition from condemnors who enjoy operating under the current law that stacks the deck in their favor. Ultimately, we were not successful, but we learned hard lessons, the kinds that stick with you.

The 2019 session of the Texas Legislature begins in a few months, and we fully intend to fight once again to reform eminent domain laws in Texas. The lessons learned from 2017 have galvanized our resolve and made us rethink how we approach the issues and those who seek to block progress.

One fundamental component is to require that common carriers make an adequate offer to the landowner at the outset of negotiations. If a landowner is presented with a fair offer, he or she is more likely to be a willing seller, thus sparing both parties from time-consuming and expensive litigation.

Millions of barrels of oil and gas flow through the common carrier pipelines that exist today, but production far exceeds the capacity of these existing pipelines, especially in the Permian Basin. As an attorney based in San Angelo, I have had clients tell me of initial offers that are a pittance compared to the value of the millions of dollars’ worth of product that will flow through the pipelines.

It’s time that companies with the power of eminent domain begin treating landowners more like a partner and less like a commodity. We need to ask why the pipeline and transmission line industries are being carried on the backs of private property owners.

To create the kind of change that is necessary to protect landowners from abusive eminent domain processes, we must educate our elected officials on the realities we face when that right-of-way agent comes knocking.

Lawmakers will face intense pressure to keep the eminent domain laws as they are. We need to show how the eminent domain process works and where the abuses lie.

If you have had an experience with a pipeline or electric company in a condemnation process, we want to hear from you. Your experiences can help show the public and the legislature how dire the situation is for their constituents, Texas landowners.

By Brian McLaughlin, Texas and Southwestern Cattle Raisers Association director. Texas & Southwestern Cattle Raisers Association, 1005 Congress Avenue, Suite 1050, Austin, TX 78701.

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