From S&P Global:
During a forum on pipelines and property rights held by the R Street Institute in Washington, there was agreement that more can be done to inform landowners of their rights.
William Murray, energy manager at R Street Institute, said there may be a need for pipelines to pay a higher premium for access, for instance when environmental externalities are taken into account.
“What we’re seeing is that the cost of environmental consciousness in the last half century suggests that there’s probably a higher premium for access than is currently appreciated.” He gave the example of a project needing to cross under the Potomac River that needed access to about 0.1 acre and offered $5,000 to the state of Maryland, which decided to fight in court.
“I’m not sure that $5,000 is a proper offer for a permanent access and easement for 30 to 40 years and hundreds of millions of dollars over time of natural gas,” Murray said.
Asked about the idea of premiums, Santa noted that eminent domain is valued according to the law of the state in question. He emphasized that pipelines generally only fully litigate the exercise of eminent domain only as a last resort because it is expensive to do so, and because it can pit the pipeline company against the landowners with whom it will be dealing for years.
“There are a lot of instances where a pipeline company will agree to pay in excess of what it calculated it would get” if eminent domain were fully litigated, he said.