The Pipeline Company Landman Says the Company Will Not Offer More Money Because They Want to Be “Fair” to Other Landowners Who have Already Signed Pipeline Agreements.

There are many tactics that pipeline companies use to try to persuade landowners to sign company friendly Pipeline Agreements for low compensation. Although many of these techniques cause me to pull my hair out, one particular technique drives me especially batty.

I go crazy when a Pipeline Company Landman tells a landowner that the company will not offer more money for a Pipeline Agreement because:

LANDMAN STATES: “The Pipeline Company wants to be fair to your neighbors and other landowners who have already signed Pipeline Agreements at $15 or $20 per foot. You see [Mr. Landowner], your neighbors have already signed at this $15 or $20 per foot rate and we are a Pipeline Company dedicated to be fair to the landowners in your area.”

To put it extremely politely, these statements are self-serving hogwash.

What really occurs in this scenario is that the Pipeline Company was able to get some generally uninformed landowners to sign bad Pipeline Right-of-Way Agreements at very low compensation rates and now the company wants to pass on these same bad Pipeline Agreements to you and other landowners in the area.

Yes, the Pipeline Company wants to be “fair”. They want to be “fair” by giving all landowners the same bad Pipeline Agreements at very low compensation. The “fairness” the company seeks is for all landowners to sign the same bad Pipeline Agreements at low compensation. Seriously, that is the Pipeline Company’s definition of “fairness”???

I tell the company Landmen that their obvious mistake was not to sign the first few landowners at $2 per foot so they could go around telling all future landowners that they are only offering $2 per foot for all Pipeline Agreements in order to be “fair” to other Landowners who signed at $2 per foot. My definition of “fairness” is not to sign initial landowners to bad Pipeline Agreements for low compensation and then push those identical terms on other landowners.

Just because some landowners in your area signed bad Pipeline Agreements for low compensation does not mean that you should do the same! Imagine if a car dealership was able to sell a new car at the full sticker price to the first buyer and then the dealership tells all other buyers that they needs to be “fair” to the first buyer so all future buyers must also pay full sticker price. This concept is ridiculous, but it is a leading technique employed by Pipeline Companies in order to influence and persuade landowners to sign bad Pipeline Agreements at low compensation rates. Do not fall for this classic pipeline ploy.

If you want to have some fun, ask the Landman if the gas company who paid some landowners $100 per acre and 12.5% royalty, and other neighboring landowners $6,000 per acre and 21% royalty, were treating everyone “fairly”. I represent many landowners with new lease offers today that are significantly lower than the higher lease offers of the past. When you ask the company to be “fair” and give the landowner the same lease terms that their neighbor signed, the company laughs.
Gas and Pipeline Companies always act in their best interest. As they should. Of course, each and every landowner must also act in their own personal best interest.

  • Every single landowner is in a unique situation when considering a Pipeline Agreement;
  • Any landowner considering a Pipeline Agreement should at least have a telephone consultation with an experienced lawyer who can explain their rights to decline a Pipeline Agreement offer and explain their negotiation leverage;
  • Just because some uninformed landowners are willing to sign a bad Pipeline Agreements with no true property protections and insufficient compensation, does not mean you should; and
  • Treating everyone poorly is not “fairness”!

Douglas A. Clark, Esq. – Protecting Pennsylvania Landowners