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Amy Dalrymple, Forum News Service, Published November 04 2012

Expansion critical, but landowners getting weary

WILLISTON, N.D. – Williams County farmer Blaine Jorgenson doesn’t need pipeline markers to show him where the oil and gas gathering lines are below his property.

Jorgenson can see trenches where pipelines have settled as he scans his fields, and he knows to use caution when driving over them with certain equipment.

“In places, they’re pretty sharp,” said the lifelong Williams County resident.

Jorgenson has four gathering lines on his property and additional pipelines on farmland he rents. Cases of pipeline companies that didn’t follow through on their promises or promptly repair areas that caved in have left Jorgenson reluctant to negotiate future easements.

“I shouldn’t have to call them five times to get something fixed,” Jorgenson said.

But while some landowners are getting weary after dealing with multiple pipeline companies, industry officials say building more pipelines is the only way to get trucks off the road.

“Pipelines are the safest, most efficient way of moving those products around the region and around the U.S.,” said Justin Kringstad, director of the North Dakota Pipeline Authority.

In North Dakota, 74 percent of crude oil is gathered by truck and 26 percent gathered by pipeline, according to Kringstad. For Williams County, the ratio is 95 percent truck and 5 percent pipeline.

“That’s not sustainable,” said Lynn Helms, director of the Department of Mineral Resources. “That’s not a paradigm that we can live with long-term.”

But the process to obtain easements for pipeline projects is taking longer and becoming more expensive, Helms said.

Some companies are starting to talk about developing corridors of pipelines so landowners deal with one easement, one payment and one negotiation at the coffee table, Helms said.

“The landowners are experiencing exhaustion,” Helms said.

Daryl Dukart, a Dunn County rancher and county commissioner, said he notices more coordination now with pipeline projects, whereas two years ago the pipelines seemed to be going “every direction but up and down.”

In some parts of the county, landowners have been inundated with easement negotiations, he said. The process is particularly frustrating for farmers and ranchers who own the surface land but not the minerals, which is the case for most in Dunn County landowners, Dukart said.

“You have all these impacts, and you receive no royalties from the gas or the oil,” Dukart said.

From a landowner’s perspective, a pipeline that is properly installed takes about five to seven years to heal, and a poorly installed pipeline can take 10 to 15 years or even longer, Dukart said.

Dukart, who has four pipelines on his land, said all have been installed according to his wishes.

The price to obtain an easement used to be about $25 per rod, or 16½ feet, but now the price can be as high as $135 per rod, Dukart said.

The prices have risen similarly in Williams County, with landowners typically not accepting less than $100 a rod, Jorgenson said.

“We were giving them away too cheap,” Jorgenson said.

In some cases, that payment is the only compensation that landowners receive for loss of crop production, Jorgenson said. And on land that Jorgenson farms but doesn’t own, the payment goes to the landowner.

Enbridge Pipelines has a formula for compensating landowners for loss of crop production, which Jorgenson said he thinks is fair. The formula assumes 100 percent loss during the year of construction and the compensation gradually reduces over a specified period of time.

Enbridge, which has operated in North Dakota for 50 years and is expanding its capacity, considers relationships between right-of-way agents and landowners to be critical, said Katie Haarsager, community relations adviser.

“We want to make sure our landowners feel like they’re being heard, and also that they understand our right-of-way agents and the information we’re giving to them,” Haarsager said.

Right-of-way agents aim to talk to landowners early on in the development stage to get valuable information about the land, she said.

“When we can actually work with those people early on and get that information from them, then we can build that into our plans, we can work with them closer, and it makes the process move much more smoothly,” Haarsager said.

Seeing the benefits

The attitude toward pipelines is generally positive because landowners do want to see reduced truck traffic, Dukart said. But there are areas that should be improved, he said.

The negotiations can get off on the wrong foot when a surveyor enters private property without notifying the landowner orally or by certified mail, Dukart said.

“It’s just a procedure that aggravates you or gets underneath your collar, and it’s hard to shake off,” Dukart said.

Dunn County landowners are meeting in November to discuss possible ideas related to pipelines to bring to the next legislative session that would better protect landowners, Dukart said.

“I think our differences are very small, they just need to be visited and talked about,” Dukart said.

Dalrymple is a Forum Communications reporter stationed in the Oil Patch. She can be reached at adalrymple@forumcomm.com or (701) 580-6890.