More ET Rover Bungling...Or is it a Calculated Decision to Place Speed Over Safety?

by Clark Hill PLC

ET Rover’s pipeline construction activities in Ohio for the same pipeline that is being built in Lenawee and Washtenaw Counties in Michigan result in multiple environmental and other violations, leaving some to believe that paying fines when caught is cheaper than delaying receipt of $10,000,000 per week in income.

I handled multiple ET Rover pipeline acquisitions that I was able to settle with increased just compensation paid for easements that were restricted in scope compared to what Rover originally requested.  I also handled one matter in the federal condemnation filing by Rover.  I also posted about Rover spilling drilling fluid in wetlands in Ohio.

Now, Bloomberg has published an article discussing Rover’s construction problems in greater detail.  According to Bloomberg, in addition to the major drilling fluid spills, Rover has demolished a historic home despite a FERC recommendation against it, dumped water in farm fields resulting in planting interruptions, and been cited by the Ohio EPA “at least 16 times for improperly disposing of sediment-laden water in streams.”  Rover lost 119,000 barrels of drilling fluid.  “119,000 barrels of drilling fluid had disappeared, enough to fill 145 rail cars, in a hole that could only accommodate 7,000 barrels, according to the emails. On April 13, they found about 40 percent of it. It had settled on 500,000 acres of pristine wetland.”

Rover is in line to “lose more than $10 million a week if it misses [a] deadline.”  Perhaps Rover is taking the philosophy that the financial consequences of delaying generating income are less than paying to deal with the problems that they create (assuming that Rover is held accountable for those problems –  it has “rebuffed efforts to settle violations and refused to pay $700,000 in civil penalties the [Ohio EPA] had levied”).

What does this mean for property owners? 

The more the public becomes aware of pipeline problems, the more potential buyers are going to avoid encumbered properties, reducing their values.

The more rights that an easement conveys to a pipeline company, the more likelihood of future problems arising.  For example, many pipeline companies seek easements that allow them to build an unlimited number of pipelines.  If problems can arise during construction that can result in destroying property for decades (as the Ohio EPA believes will happen to wetlands impacted by Rover), allowing future construction of new pipelines increases the likelihood of those problems. 

If easements limit the ability to recover damages or fail to make the pipeline company itself liable for damages, then property owners will be left holding the bag.  For example, unless the easement is negotiated properly, a property owner could be in a position of fighting to establish whether the pipeline company itself or an unknown contractor is liable.  This was an issue that I had to negotiate with multiple pipeline companies.

All of these nightmares were exacerbated if easements that were recently requested by pipeline companies that I opposed had been signed by property owners who did not focus on the “fine print” and instead focused exclusively on the money.

These situations demonstrate exactly why it is necessary to retain a qualified eminent domain specialist to both maximize your just compensation while understanding the technicalities of the easement contracts.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Clark Hill PLC | Attorney Advertising

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