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Eminent domain negotiations require transparency with landowners

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Adam C. Hall is a Crowe & Dunlevy Director attorney and member of the firm’s Energy, Environment and Natural Resources, Real Estate and Construction Practice Groups.

Adam C. Hall is a Crowe & Dunlevy Director attorney and member of the firm’s Energy, Environment and Natural Resources, Real Estate and Construction Practice Groups.

Eminent domain negotiations with landowners require transparency

Q: There is an increasing trend of companies utilizing eminent domain to acquire land relating to oil, gas and renewable energy projects and, with this, landowners are becoming increasingly sophisticated in the process. What should energy and renewable energy companies know in advance of negotiating deals with landowners?

A: Most believe that the increase in sophistication of landowners as to eminent domain and the legal process associated with the use of eminent domain results from a significant increase in the amount of oil, gas and renewable energy projects under construction within the state of Oklahoma. The past half-decade or more has seen a significant increase in the exploration, production and transportation of oil and gas in and from certain geological formations in the state, so landowners have become more accustomed to the means by which common carrier pipelines are often constructed, i.e. those common carrier pipelines typically have no other viable option but to revert to the use of eminent domain to acquire contiguous right of way to construct pipelines.

Q: What due diligence actions can be taken to make the process as smooth as possible for both the company and landowner?

A: From the standpoint of a common-carrier pipeline, which may or may not have to resort to utilizing eminent domain to acquire right of way, it is always important to be as transparent as possible with the landowner — that is, provide as much information to the landowner from whom right of way must be acquired, describing the eminent domain laws in Oklahoma and the legal process by which a company such as a common-carrier pipeline may utilize eminent domain to acquire right of way across a landowner's tract. Often the landowner's frustration with the acquisition of right of way is the result of a lack of understanding of the eminent domain process itself, so the more information that can be provided to the landowner early in the negotiations may lead to a more favorable result for all parties involved.

Q: What legal considerations should be thought about in advance?

A: A company that intends to preserve its right to utilize eminent domain should do everything possible in advance of negotiating with landowners to ensure that it has established its right to acquire right of way by eminent domain, such as registering with the Oklahoma Secretary of State to demonstrate that it is authorized to do business in Oklahoma, as well as filing an Acceptance with the Oklahoma Corporation Commission, describing in detail the project to be constructed.

PAULA BURKES, BUSINESS WRITER

Paula Burkes

A 1981 journalism graduate of Oklahoma State University, Paula Burkes has more than 30 years experience writing and editing award-winning material for newspapers and healthcare, educational and... Read more ›

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