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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 provisions
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.
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