Pipeline repair – a new solution for old problems
Energy pipelines are subject to regular inspection and, from time to time, may require maintenance. When a pipeline company wishes to excavate its pipeline, what are the rights of the landowner? Are there restrictions on how a pipeline company may access its pipeline? How can the landowner ensure that he receives appropriate compensation?
Rights and obligations of pipeline companies and landowners are governed by both legislation and agreements registered against the title to the land. Such agreements are called easement or right-of-way agreements and usually grant to the pipeline company the right to construct, maintain, inspect, remove, replace and repair its pipelines. However, such agreements also generally contain provision restricting the pipeline company’s right of access to the pipeline to the easement lands. Except in the case of emergency, under such agreements the pipeline company requires the consent of the landowner if the pipeline company wishes to access the pipeline off easement. Both the relevant legislation and these agreements also provide that the company is responsible to the landowner for all damages arising from its operations.
Whether access to a pipeline is gained by the pipeline company on or off easement, landowners are often concerned that they have not been fairly compensated for the company’s inspection and maintenance activities, both for non-easement land use and the crop loss and disturbance damage inflicted on easement and off easement lands. In an effort to address this problem, the Gas Pipeline Landowners of Ontario (GAPLO) has concluded with a pipeline company a form of agreement called an “Integrity Dig Agreement” which requires the pipeline company to enter into a written agreement with a landowner in advance of inspection and repair work establishing minimum levels of compensation.
The Integrity Dig Agreement concluded by GAPLO requires the pipeline company to provide to the landowner in advance of construction a sketch fixing the on and off easement lands to be affected. The Agreement limits the company’s rights with respect to off easement land to access (if consented to by the landowner), specifies time limits for the work; and restricts the equipment which may be used so as to minimize soil damage. Under the Agreement, the company is required to strip the topsoil from all affected easement lands and, at the request of the landowner where the pipe is to be replaced, access lands. The Agreement further imposes remediation obligations on the pipeline company to return the lands to their original grade, compaction and fertility.
GAPLO’s Integrity Dig Agreement requires the company to calculate and commit to minimum levels of compensation for all affected lands prior to repair and maintenance work being undertaken. Landowners are compensated for land rights on all affected off easement lands used for access and topsoil storage. Crop loss for the construction and subsequent five years, as well as disturbance damages, are calculated and paid on all affected easement and off easement lands. To the extent that landowners suffer damages in excess of this minimum compensation, or continuing crop losses in excess of those compensated, landowners are entitled to additional compensation. In addition, if the company is required to carry out the work in wet soil conditions, landowners are entitled to 150% of the crop loss and disturbance damages otherwise payable.
From the perspective of both the landowner and the pipeline company, GAPLO’s Integrity Dig Agreement resolves many of the issues which have risen in the past with respect to repair and maintenance work undertaken by pipeline companies. Landowners are assured of when, how long, in what conditions, with what equipment and on which lands work will be carried out, and have a written commitment in advance of construction establishing their minimum level of compensation. It is to be hoped that all pipeline companies will extend the benefit of similar agreements to their landowners.