... Managing Land the Right Way for Pipeline Rights of Way

Managing Land the Right Way for Pipeline Rights of Way

The rise of political opposition to oil and gas pipelines in North America has expanded the role of those responsible for securing land rights for these large-scale projects. Land managers, legal professionals and other stakeholders have been enlisted as soldiers in the fight against misinformation spread by activist groups that seek to disrupt the progress of new pipeline development.

TransCanada’s Keystone XL project reigns as the poster child for the rampant politicizing of pipeline construction. Stemming from the hyper-scrutiny these projects receive in today’s hyper-connected world, public education has become a top priority for pipeline stakeholders to ensure success.

In addition to working with property owners, land managers must also engage with the community at large to provide education and assurances about a pipeline. Keystone XL represents the first time such opposition went “viral,” as activist groups waged a well-organized social media campaign to stop the project. As a result, Keystone XL endured study after study to ensure its safety, but all to no avail.

The U.S. State Department received the first permit application for Keystone XL in September 2008. As the project went through the regulatory approval process, third-party opposition grew to a fever pitch until the pipeline became a political football that the Obama administration tried on more than one occasion to punt away before rejecting it altogether in November 2015.

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TransCanada and project stakeholders remain committed to building the proposed 1,179-mile, 36-in. diameter pipeline, and the company is seeking legal action to reverse the decision. Meanwhile, the project may supply the industry with a different kind of valuable resource.

In those seven years of development, Keystone XL became something more than just another pipeline: It became a real-time example of how such projects must be developed amid heightened public attention and increased political opposition.

Land managers, whose primary duty was to negotiate easements from owners to secure rights of way across tens, hundreds or even thousands of miles, now are tasked with educating stakeholders and the public about the scope and — perhaps most importantly — the safety of proposed pipelines. This became a critical function of TransCanada’s land management group when Keystone XL became a political talking point, says Andrew Craig, land manager for the company’s U.S. projects.

“We as an organization pride ourselves in educating not only our directly affected landowners but the surrounding communities as well,” Craig says. “Building trust within the communities we work in by addressing concerns quickly and accurately is very important to us as an organization and to our land agents working on the front lines every day.”

Craig views the role of TransCanada’s land management group as “the landowner advocacy group.” It’s his job to make sure the property owners understand the scope of the project and address their concerns.
“We work with landowners to identify how their property will be affected during the construction and operation of our pipelines and develop plans to minimize or mitigate impacts as possible,” Craig says. “Acting as advocates for landowners ensures all concerns a landowner has are communicated to the company and addressed to the best extent possible.”

Looking back, it seems obvious why the Keystone XL project attracted such scrutiny. Development of the pipeline occurred amid what seems like a perfect storm of bad press for the oil and
gas industry.

Just a year and seven months after TransCanada filed for a cross-border permit for Keystone XL, an explosion on the Deepwater Horizon drilling rig killed 11 crewmen in the Gulf of Mexico and caused the largest oil spill to date in U.S. waters. Three months later Enbridge’s Line 6B ruptured in Marshall, Michigan, and spilled more than 800,000 gallons of crude into a tributary of the Kalamazoo River. Finally, two months after that was the deadly explosion in San Bruno, California, when a natural gas pipeline owned by Pacific Gas & Electric ruptured and led to the deaths of eight people.

This unholy trinity of high-profile incidents led to monumental regulatory changes in the industry and spurred unprecedented public scrutiny of nearly every large-scale pipeline project since.

But the added attention isn’t necessarily all a bad thing, says Ralph Cantafio, president and managing partner of Denver-based firm Cantafio Hammond, which emphasizes oil and gas law and contract negotiation.

The increased attention has resulted in some benefits, Cantafio says. Now, the oil and gas pipeline industry is focusing more on public relations and educational outreach, creating more transparency. Still more can be done, however, to ease the public’s worries about new pipeline projects.

“These are often well-meaning people,” he says. “They’re not bad people because they voice concerns.”
It’s the industry’s job to allay those fears, Cantafio says, stressing the importance of public outreach.

“Many people are still very dim in understanding the role oil and gas plays in the grand scheme of economics and geopolitical issues involving international politics and the benefits of the nation,” he adds. “The media overplays perceived environmental threats and not the role energy plays in overall national security. The industry doesn’t do a good enough job of showing that once the pipeline is in the ground there’s very little impact to the surrounding area.”

This kind of education and outreach will likely remain a major component of developing oil and gas pipelines, says Craig, adding, “I believe we will see the energy industry as a whole increase focus educating consumers on the future of energy in North America and the role pipelines will continue to play in the delivery of that energy.”

TransCanada’s land management group

TransCanada’s land management group works with landowners to identify how their property will be affected during the construction and operation of its pipelines and to act as advocates to ensure the landowner’s concerns are addressed, says Andrew Craig, the company’s land manager for U.S. projects.

Political Opposition

The increase in political activism surrounding oil and gas pipelines is one of the biggest developments over the last five years to impact the industry, Craig says. These groups present a major challenge to the development of new pipelines.

“There has been a significant and well organized opposition to eliminate fossil fuel consumption in North America,” he says. “We recognize the need to be more efficient in our effort to reduce greenhouse gases and believe that we can help be part of the solution to climate change. However, what those ideologically opposed to the use of fossil fuels don’t seem to acknowledge is that the transition won’t come overnight. Currently, pipelines are the safest and most energy efficient way to transport oil that fuels our cars and trucks, creates consumer goods and all the other things that are derived from the product.”

Well-funded, organized and publicized opposition groups are targeting pipeline projects across North America, Craig says. Responding to and refuting the opposition has become a necessary aspect  of initiating a project.
“A common method employed by opposition groups is to provide misinformation about projects to landowners and stakeholders,” he says. “As a result we find ourselves having to spend considerable time informing people with facts to counter misinformation and inaccuracies.”

The increased politicizing of pipeline projects leads to costly delays in the industry, Craig says. The industry is also seeing “overall eminent domain percentages creep upward as a result.”

In addition to delays, Cantafio adds that some pipeline projects have been reduced in scope while others have been terminated altogether.

“It’s an uncertain oil and gas climate from an economic point of view,” he says. “There have been a lot of projects that were ready to get to the point of turning dirt that have stopped. Generally speaking, most people are fairly bullish on the long-term outlook for oil and gas, but the problem is the next six months of uncertainty and when that will turn.”

Regulatory Outlook

The oil and gas pipeline industry has seen an increase in governmental regulations over the past decade. While the changes have done a measure of good in terms of improving integrity and safety, Cantafio says the rules handed down by the Obama administration and the U.S. Environmental Protection Agency have also made the permitting process more expensive and more time consuming.

“The biggest complication has been indirect in nature and involves the fact that the Obama administration has relied on executive orders and the rulemaking process of the EPA to make the entire permitting process more expensive for oil and gas,” Cantafio says. “The Obama administration favors solar, wind and to a lesser extent geothermal.”

Cantafio adds that complying with federal, state and local governments — as well as the Clean Water and Clean Air acts — has led to more extensive environmental impacted statements (EIS).

On top of navigating the regulatory maze is the scrutiny from what Cantafio calls “non-traditional stakeholders” who closely watch every step of the permitting process.

“There’s nothing wrong with that as transparency is an important part of pipeline operations, but the opportunities for public participation were meant as a way to move the process forward in an open way,” Cantafio says. “Now, there’s scrutiny on every step of the process. We have to be very mindful of public relations during every step of getting a pipeline into the ground. There’s a large amount of information getting out, but it’s not always accurate.”
Aside from managing the basic nuts and bolts of a project, Cantafio argues that stakeholders must pay strict attention to what is being written in newspapers, on social media and on the public record in public comment sessions.

“Projects face the threat of litigation not because we did something wrong, but because project delay is a good result from these groups’ perspective,” Cantafio says. “A project can be well engineered and well thought out from practical aspects, but end up derailed because other influences that are allowed but not used in the way they were intended to be used.”

Despite political opposition to pipelines and the downturn in the industry, Cantafio says pipelines remain vital.
“In the long-term, the oil and gas industry is hugely important to the national economy and national security, and I don’t think anything will fundamentally change about any of those,” he says. “If anything change will come from within the industry … The biggest fact is that the industry will be just fine. There are ups and downs, and there always have been. We’re in a down cycle now, but we don’t really know when that will change. There are so many we factors don’t know of. There will be changes, but they may be from things we don’t even know about today.”

Craig agrees, though one thing seems certain: “The United States continues to import oil,” he says, “and pipelines will need to be constructed to move this oil and more importantly new pipelines are needed to replace aging infrastructure and less safe and less efficient modes of transportation such as rail.”

Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.

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