Who Owns Abandoned Pipelines?

1. Amount of compensation.
2. Description of the right-of-way or the description of the land the pipeline traverses. An example of a description from an agreement written in Texas in 1927 states, “………through the following described lands situate in Crane County and State of Texas, to-wit: across Sections 7-8-13-12-11 & 20 in Block B-21 Public School Lands and across Sections 19-20-28 & 29 in Block B-26 Public School Lands.”
3. Rights of the grantee. In this same 1927 Texas agreement, the boilerplate language that was used (and which is still the mainstay language of right-of-way agreements today) would state that the landowner hereby grants the pipeline company “… the right-of-way to lay, maintain, operate and remove a pipe line for the transportation of oil and gas, and to erect, maintain, operate and remove a telegraph or telephone line, together with the right of ingress and egress, on, over and through the following described lands situate……”
4. Term of the contract. This is a more recent addition to right-of-way agreements and is usually “ten years,” “upon cessation of usage,” or “within twenty four months after cessation of usage.” In the case of the 1927 Texas agreement, the absence of a specified term gives the grantee/pipeline owner the rights to the easement and pipe line in perpetuity. Many old right-of-way agreements were unintentionally written in perpetuity without a termination date.

A pipeline right-of-way is really no different than any other kind of easement, and therein lies some interesting comparisons and--in some cases precedent--for extinguishing or canceling agreements, even ones that were written to have a perpetual term.

Abandoning Pipelines
Why the language of abandonment in the regulations? The simple explanation: the pipeline company is no longer responsible for taking care of the pipeline according to regulations as if it were an active viable pipeline. That means pipeline companies no longer have to worry about regulatory fly bys to verify if the right-of-way can be seen from the air.

The Texas Railroad Commission is responsible for fly-bys in Texas and ceases fly-by activity when a pipeline is designated as abandoned. Once a pipeline is designated as abandoned, pipeline owners and operators no longer incur the expense of maintaining easements with expensive mowing and caretaking. And, they no longer have to paint posts and put up new signs to mark the pipeline. All of these responsibilities are expensive and time consuming.

Another huge bonus for abandoning a pipeline is reduction of taxes or total elimination of ad valorem, school, county and other jurisdictional levies. Generally speaking, taxes are almost non existent for abandoned pipelines. But still, if a landowner wants to claim the pipeline on his or her property, the pipeline company will likely claim it is their property and explain that the pipeline is only “idled” as opposed to a “given up entirely” type of abandonment.

In the case of our friend in Central Texas, he can have the easement returned, but not the pipeline fixture. He must pay the price of a pipeline company approved contractor with environmental supervision standing by in order to make his own land usable. This was not the way it was supposed to be. So, abandonment of pipelines can mean many things to many people.