High Pressure Gas Uitlity Easement

[Tim Hicks (Texas)]

This is a new one for me. I was just furnished with the survey of a property I appraised. It seems there is a high pressure gas utility easement that intersects the lot of the subject property. It is a corner property in a $150-200,000 neighborhood. This is a sale for $180,000. I was barely able to justify the sales price with its numerous upgrades. Then they popped the survey on me and asked me to address the utility easements affect on the value of the property. This is not your typical utility easement around the border of the lot (5-20 feet). This is a 50 foot easement that cuts across the front part of the property diagonally. It travels under the approach sidewalk, up against the sidewalk leading from the side drive way to the front of the home and goes partially under the drive way. As close as I can figure it gets within 20 feet of the residence and reduces the one acre lot to a useable .75 acres (approx.). Now, I would not buy this property, but this is the second owner in two years, so there is a market for it. Of course, I have no sales of properties with similar easements. Your comments and suggestions are welcomed. Lets just say they are going to be unhappy if I lower my value, which I am inclined to do since getting a current survey. But, shouldn't that be expected from such a conservative appraiser?

 

[David S. Roberson]

Seems like marketability would be somewhat affected, as this property wouldn't qualify for HUD financing. I don't know about VA (I'm not cool enough for VA). Maybe the previous owners were not fully aware of the potential problems this could pose.

 

[Jo Ann Meyer Stratton]

I am surprised that there is any construction of any kind across that easement! My 300 ' long rear lot line is the main high pressure gas line from the CA coast where Alaska gas is unloaded to the pipeline and then on to refineries in TX. So the back 100' of my lot is an easement that absolutely nothing (not even fences) can be constructed on. One of the main residential streets in town is the same gas line with this 100' wide graveled area between concrete curbs going down the middle of the street, the street has a 50' lane on each side of the graveled bed. The gas company would not allow the subdivider to pave the middle 100' and so the entire subdivision had to be completely redesigned with a main road 200' wide, instead of a 100'. Is the pipeline still in use or has it been abandoned? The gas line company patrols my rear lot line quite frequently and gets upset if any obstructions are in the way.

 

[Larry Lyke]

Tim --

You can probably make any objection (yours?) to the pipeline easement go away by noting such on the appraisal (addendum?) and politely instructing the UW to order a letter from the pipeline company stating how well maintained and safe it is, etc. They are used to this.

The perception of a high pressure easement as a problem is greater than the reality and need not be deleterious. The latter is in the eye of the beholder.

Some "beholders" have spoken -- You said the property has been sold a couple of times before.

Does the buyer know -- yet?

 

[xmrdfghap]

<span style='color:brown'>There are several things about this you haven't mentioned. What is the diameter of the pipeline, what is the pressure, what is the age, etc. These will all bear some impact on the stigma, if any, that is attached to the property.

One way of measuring any real stigma can be ascertained by comparing lot sizes with selling prices. If you graph them out, you will find that lots with a pipeline are frequently close to 10% bigger than other lots in the neighborhood...and they sell for the same price, not at a premium. This should not influence the current valuation as this size differential is "built-in" to the current prices. Under different circumstances a larger sized lot would normally sell for a somewhat higher price. If this is a larger lot than it's neighbors that do not have the pipeline and it sells for the same price as its neighbor, then the stigma, such as it is, has already been incorporated.

Another concern deals with the easement itself and its proximity to the home. If this is a 30" pipeline, 20' is nowhere near enough distance from the house....such esements are 75'-150' wide. If the pipeline went in after the home was built, the entire property should have been taken. If it was built after the pipline was put in, then the home is non-conforming and any disaster (fire, tornado, etc) will require removal of that portion of the house. If the pipeline is an 8" or 6" line at less than 150 psi, then the 20' might be enough. Either way, I remember the Carlsbad explosion a few years ago and would not willingly live within the explosion zone, ever.

Other considerations is anode replacement, stray voltage (static electric energy developed by the anodic reaction of the soil to the pipe.....the reason you need zincs or some other anodic discharge medium.) potential.......it has not been proven, but stray voltage can also be created by high power lines crossing over the pipeline (the University of Wisconsin in Milwaukee is doing research now on the subject of stray voltage and the reduction in milk production it causes), a clear run for aircraft patrol of the pipeline, ground water depth (pipes filled with a light gas or petroleum can "float" to the surface over time, requiring re-excavation about a quarter to half a mile past each end of the floated pipe (depending on it's depth) to allow it to "sag" back into place.

Also you will need to verify that there are no trees or shrubs growing on the easement. A homeowner who violates the easement and allows permanent trees or shrubs to grow on an easement can be required to remove them at the homeowners expense....same thing includes fences.

All in all, pipleines are a problem and are not addressed properly in most reports I have seen....but then it takes more than a driveby and an opinion to develop a supportable value for the stigma.</span>

 

[xmrdfghap]

I went ahead and looked up the Carlsbad fire.

http://www.nctimes.com/news/082100/hh.html

CARLSBAD, N.M. (AP) ---- On one side of the Pecos River are three charred pickup trucks, remnants of a weekend camping trip. Beyond the other bank are clusters of blackened trees.

An explosion of a natural gas pipeline just before dawn Saturday swept flames down the river's banks and through the tents of two families, killing 10 people and leaving two critically burned.

And

"They were consumed by a huge ball of fire," said state police Lt. Larry Rogers. Officials described the ruptured line as a massive flame-thrower that showered burning fuel on the victims.

And

A nearby bridge carries the 30-inch natural gas pipeline across the river, then the pipeline goes underground, said Norma Dunn, spokeswoman for El Paso Natural Gas Co.

The pipeline was 5 to 6 feet underground at the rupture point, Dunn said.

The force of its explosion carved out a crater that authorities said measured about 86 feet long, 46 feet wide and 20 feet deep.

The fire burned 40 minutes to an hour and was visible from Carlsbad, 20 miles to the north, Balderston said.

and from
http://ens.lycos.com/ens/aug2000/2000L-08-21-06.html

Company officials said the pipeline had been inspected earlier this month, and had had a full corrosion inspection earlier this year.

The first warning that their was a problem with the pipeline apparently came when an automated computer reading of gas pressure in the pipeline showed a drop from 673.5 pounds per square inch to 377.19 pounds per square inch, between 5:26 am and 5:30 am. The Carlsbad Fire Department arrived on the scene of the accident by 6:12 am. El Paso Natural Gas workers shut off gas flow to the ruptured pipeline using manual valves at 6:21 am.

Seismic data, photos, and maps of the explosion site can be found at
http://www.ees.nmt.edu/Geop/Pipeline/pipeline.html

It is my belief that if there is no stigma attached to a high pressure pipeline, it is only because no one knows better.

 

[Jo Ann Meyer Stratton]

Egad! Greg, that's my pipeline as it continues to Texas 300 miles east of me! I didn't remember hearing about that explosion. When did it happen---and no wonder El Paso wouldn't let the developer pave the street over the pipeline and patrols my back lot line very, very frequently!

 

[Larry Lyke]

We had a bad incident here in the suburbs a decade or so ago wherein several homeowners were burned to death from a rupture, but the pipeline was repaired and the houses replaced.

It hasn't changed the basic idea of underground pipelines, though.

I think some of us would be pretty scared if we really knew much about the underground transportation system in our country. It's vast.

And I'm not talking underground storm sewers, sanitary water supply and sanitary sewers.

A simple concept to think about is the natural gas pipelines flowing to most parts of the country. Well, we don't have gas wells in Minnesota! So these piplines all originate someplace else.

 

[xmrdfghap]

The explosion in Carlsbad was on August 21, 2000.

Remember the manufacturing process.....out of the thousands of pipe produced, how many are actually tested for strength and thickness? How many have bits of carbon or slag or some sort of impurity that may cause it to fail? Think the pipeline contractor buys pipe from the lowest bidder? Think maybe that because time is money, the occasional crew chief hurries his crew to meet a schedule? If you have a better chance of being hit by lightning than of winning a lottery, then maybe you have a better chance of being burnt alive by a pipeline explosion than of winning a lottery, too.......do you buy lottery tickets? It is a matter of perspective, I guess, but like I said, 20 feet from the house is pretty damn close to a bomb that may never go off.......but then again, it might.