Easements, Eminent Domain, and Landowner Rights
Easements are a recurring issue for landowners and I regularly receive calls with a number of common questions. As oil and gas gathering infrastructure catch up with the boom, landowners in the region will continue to receive requests for easements.
If you receive an easement proposal, it is an important preliminary question whether the developer has the right to come on your property without your permission. There are three common situations: 1) The developer has eminent domain authority; 2) The developer has an implied easement because it owns the minerals; or 3) The developer does not have the right to enter without permission.
Eminent domain authority allows the developer to obtain access over the land without the landowner’s consent, after satisfying certain statutory requirements. Eminent domain can be used if it is a common carrier pipeline, which is specifically defined at N.D.C.C. § 49-19-01. Generally, a large pipeline that will be open to general use by mineral developers is considered a common carrier. Additionally, public electric utilities often receive eminent domain authority for electric transmission lines. The key aspect of these projects is that there is a “public use” component. In order to exercise eminent domain authority, the developers typically have to participate in proceedings before the North Dakota Public Service Commission or the Federal Energy Regulatory Commission. This is another place where landowners should be involved and also provides a significant clue as to whether a project will be able to use eminent domain authority to obtain easements.
Even if a mineral developer does not have eminent domain authority, it is possible that ownership of the minerals themselves will give that mineral owner the right to enter the surface estate. The basic test for determining whether the mineral developer has the right to put in a pipeline without obtaining an easement can be summed up in a question: Is the pipeline reasonably necessary in order to develop the minerals underneath the surface?
For example, if you own the surface of Section 19, and someone else owns the minerals, the mineral owner has the right to use the surface of Section 19 as is reasonably necessary to produce the minerals underneath Section 19. There are some important additional points and distinctions to this general rule and what counts as “reasonable necessary” may be arguable so it is important to talk to an attorney if you think this situation may apply to you. .
If a developer has neither eminent domain authority nor an implied easement as the mineral owner, then it may be a situation in which the developer does not have a right to build a pipeline without your permission. This is frequently the case where there is a gathering pipeline that is not connected to wells on your property. Unless your property is part of a unit and the gathering lines are connecting the wells in that unit, it is likely that the mineral developer does not have the right to run the gathering line across your property.
It is crucial for landowners to be aware of their rights, specifically when they have the right to deny access or refuse to sign an easement. This is not to say that landowners are better off denying access or easements, particularly with the need for gathering infrastructure in North Dakota. Landowners should not be afraid to demand provisions in an easement that protect them and their land, however, and having the right to say no often provides the leverage needed to obtain these provisions.
(Posted by Derrick Braaten)