Negotiating Pipeline Contracts | Video

Jennifer Joas | 6/15/2012

Pipelines are a safer and more reliable way to transport oil than by truck, so the state is pushing for more pipelines to go in. But with the haste of construction, landowners are sometimes unhappy with the results.

We sat down with a law firm to provide a how-to to negotiating pipeline contracts.

"They say a lot of things but the reality is it`s a nightmare out there for the landowner," said Steve Davis who owns land near White Earth.

Davis is just one of many landowners who negotiated a contract with companies to lay pipe across their land. He claims the pipe was relocated and the company did not properly restore his land.

"There was a drawing that said exactly where everything was supposed to go. And then you sign it. And then of course if you`re naive enough not to read the fine print, the fine print says everything in the contract is null and void if we don`t want to do it that way."

Davis` disconnect happened with the contractor.

"Pipeline contractors are interested in getting production done. Getting the pipe in the ground as fast as they can because that`s how they get paid. And so often times they`re not as courteous or don`t have have as much respect as they could for landowners and that`s usually where the problems start," said Kadrmas, Lee & Jackson CEO Niles Hushka.

Hushka`s company does a lot of negotiations on behalf of the oil companies. He says communication is key at all stages of the pipeline process.

"I think the landowners just need to take their time and explain exactly what`s important to them. And to be more involved in the preliminary stages of where the pipeline should be placed, and the conditions for restoration. And noting any special circumstances or anything they think are very important for the pipeline companies to understand."

When it comes to negotiating the reclamation of the land, he says to make sure the contractors salvage the top soil, re-apply it and and re-seed it.

Also make note in the contract to have a one-year inspection of the land to make sure it`s to the landowner`s standard.

Larger pipeline companies are starting to have landowner liaisons to be the on-scene mediator between the landowners and construction crews.

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