Sunday, March 2, 2008

Howdy Neighbor!

What would happen to your property value if this were next door? They sound like a jet engine and can be heard for over a 1000 yards.

When drilling is complete, wells supply gas to pipelines. Pipelines need to be at high pressure to move the gas cost effectively so compressors are required on the pipelines.

Nothing in the typical mineral lease specifies where these can be placed. In fact gas pipelines are treated like utilities in state law. They can place their capital equipment on property they control ... where it is needed without the consent of nearby surface estate owners.

It's like street repair. Work is done when scheduled without nearby owners consent. Even if it causes severe hardship or business failures, the public entities (utilities, cities, counties, states, etc.) that do the work do not have to get permission since their work is considered to be "in the public interest."

This compressor pictured above (owned by EOG) is in Mansfield. Property owners nearby are very upset but quite helpless.

Other compressors can be seen north of DFW Airport across Highway 121 from Bass Pro. Since drilling has only begun not many compressors have been installed ... yet. But the number will increase with time. How many are required and where they will be located is never discussed while operators and landmen are gathering lease commitments. Owners beware! You must be proactive with city and county government to get zoning and ordinances to control pipeline facilities.

Far more common will be valving and well head "Christmas trees." There will eventually be about 30 of these per square mile. Of course they will likely be enclosed in fences and may have landscaping planted to hide them. But who will maintain the fence and landscaping?

And what hazard does this equipment represent in an urban setting? What happens if it is struck by a high speed car full of teens? What happens to the neighborhood nearby if the well head is smashed by debris from a tornado? Is lightening a hazard?

In rural areas, current industry practice and state regulations are probably adequate. But in a city, such controls have not been well tested. Do insurance rates currently reflect such new risks?

I hate to be a worry wart but I know that I would look elsewhere if I were shopping for a new home and saw one of these installations next door to an open house. What would you do?


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