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Einhorn Express Following Matterhorn Express Easement

5,574 Views | 48 Replies | Last: 2 mo ago by O.G.
Dirty-8-thirty Ag
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Looks like Whitewater plans to follow the Matterhorn Express and lay another 42" high pressure gas line called the Einhorn Express beginning in 2028. Has anybody else seen anything about this?

https://www.prnewswire.com/news-releases/eiger-express-pipeline-reaches-final-investment-decision-to-transport-growing-natural-gas-production-from-the-permian-basin-to-the-gulf-coast-region-302537206.html
redaszag99
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Pipeline Work!
AggieMPH2005
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Pretty sure Finkle is Einhorn my dude
Dirty-8-thirty Ag
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Ragoo
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Residue gas to be clear
Doc Hayworth
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Construction will probably start sometime next year if they are planning for it to be in operation by 2028.
The Matterhorn cut my ranch in half last year. Talking to another Rancher that went thru this also, he told me he was contacted by someone claiming to be from Matterhorn and they told him they plan on paying landowners the same $/ft for this new 42" line as they did for the first one.
Which leads me to believe they are going to want an additional 50' permanent easement. The 75' TWE went away last summer when they completed the pipeline on my place.. so, they'll most likely clear more oaks to get another.
OnlyForNow
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Did you ask that they pay per tree?
Dirty-8-thirty Ag
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We are about 5 minutes west of the live oak country, don't have any nice big trees, we are just a rock hill with mesquite and cactus on it. Some mature hackberry trees on the south end of the place, but not where the easement went through us. That sucks to lose big mature oak trees and I hope they compensate you well for any that are in the line.
Doc Hayworth
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The compensation wasn't worth losing 25-30 100+ year old oak trees. Some were probably close to 200.
halfastros81
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By that I presume you mean gas that has had the heavy ends processed out in a gas plant. 97% + methane.
Ragoo
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halfastros81 said:

By that I presume you mean gas that has had the heavy ends processed out in a gas plant. 97% + methane.
yes. Ch4 + N2. Probably 98+ CH4 and sub 2% N2. Headed to LNG.
halfastros81
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Ask for more in the future. I get that those old trees can't be replaced and it sucks but make the most of it . Make the argument that you made here, these trees can't be replaced in my lifetime, my children's lifetime and probably not even my grandchildren's lifetime

Ask it to be paid for as "damages" as opposed to pipeline easement . Damage payments aren't taxable. Lease payments are.

Question for you, did your original pipeline easement allow for multiple pipelines? If it did then they probably will put the pipeline within the original 50 ft easement and will just pay you to get the temporary construction easement portion back . Additional clearing may be pretty limited in that case
HTownAg98
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Most newer easements are restricted to a single line, at the insistence of the landowners. So either the new easement abuts the existing easement, or the owner of the current easement has to go back and acquire additional line rights to place another line within the easement (they aren't going to do that, unless it's for their own additional line).
And it sucks to lose trees, but in eminent domain cases, the value of trees is tied to the value of the land as land. Put another way, if your property has trees that cover 30% of the land, and the comparable sales of similar tree coverage land point to the land being worth $10,000/acre, then the value of the property being condemned is worth $10,000/acre, all things being equal. Nothing says you can't negotiate for more, but that's what the case law says.
halfastros81
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No doubt it's all subject to what the original lease agreement says but I always asked my Landmen to ask for multi line rights if they can get them. I dunno who the operator is but they probably had an idea that another pipeline was possible given that LNG export is the driver. I suspect the new pipeline operator is the same as the original pipeline operator.

Also in this case it might be advantageous to the landowner if multi line rights were originally included because it could very well mean less clearing required for the 2nd pipe.

If it was my land I'd negotiate a pipeline easement price + damages for the reason I mentioned because damages are meant to make you whole and therefore aren't taxable
HTownAg98
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They tend to get less money if they have additional line rights. You're just looking at a temporary construction easement, paid at 10% of the fee simple land value, and surface damages. But it can also be less disruptive. If it's a new easement, they get to make another round of damages arguments because they now have two pipelines instead of one.
Damages can't make you whole; they can only compensate you for what you've lost.
Doc Hayworth
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My attty negotiated the language that only one pipeline could be installed within the 50' easement. And that any additional pipeline would be an additional negotiated price
halfastros81
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Agree. Make you whole in the sense you were compensated for the damages.
HTownAg98
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No worries, it's just a term of art used in this industry. You can't make people whole, because in order to do that, you'd remove the easement. So they get compensated for what they've lost.
halfastros81
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Yeah, sometimes the original easement includes the multi line rights and even prescribes a price for the future pipeline in the original easement but since that's not the case never mind. If the operator of pipeline 2 is the same as pipeline 1 you might want to tell them you want the 2 pipelines as close to each other as possible so as to minimize damages and easement width - eg they may not need a full additional 50 ft wide permanent easement for the 2nd pipeline. They might not need any beyond the temporary construction easement

If it's 2 different entities then they'll likely need another 50 ft + temp construction easement
Jussayin
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Interested to hear damages are not taxable. Have a railroad coming through my property and my accountant said damages would be taxed at 35%. I would appreciate your insight
HTownAg98
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First off, I am not a tax attorney, nor am I a tax accountant, and this is not any kind of legal or tax advice, so take this for what it's worth. That being said, I was always taught that compensation for the part acquired is taxable, while damages to the remaining land are not taxable. So in the case of a railroad, and assuming they're buying the right of way in fee simple, the compensation for the right of way is taxable, damages to the remainder are not, and compensation for a temporary construction easement are taxable. BUT, you should consult a tax accountant that specializes in this to make sure you don't run afoul of the IRS. People think they can get cute and classify everything as damages and not pay tax on it, and end up getting a nastygram from the IRS years later. They then end up spending more money on attorneys, accountants, and appraisers when they would have been better off just paying the tax.
Doc Hayworth
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Damages are taxable. I found that out last year.
halfastros81
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How did you find that out?

It's nuanced but if the damage payment is for something that reduces the value of your land for multiple potential reasons it shouldn't be taxable
halfastros81
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I'm not a cpa or tax attorney but I did engineer and manage pipeline projects for almost 2 decades of my career among other things. Damage payments for real damages that reduce your land/property value for any number of reasons have always been considered not taxable in my experience . As HtownAg98 noted , if you try to get cute and call easement payments damages then that's a whole other issue but I think in the case of a railroad running thru your property there's quite a list of things that potentially reduce your property value depending to some degree on how the property is used or could be used . An attorney or cpa that's familiar with right of way law could very likely help optimize that case imo.

To me it's similar to an insurance policy where you make a claim due to property damage . The insurance company is supposed to compensate for said damages per your contract and make payments to you accordingly . If they don't then you hire an attorney to fight them over it but whatever the payments to you end up being they aren't taxable .

I'll give an example I have run across many times. A pipeline including the construction easement requires taking out timber that isn't mature/ ready to be harvested . It may be ready to be harvested in x years . A timber assessor can provide an estimate of what that timber could potentially be worth now and in x yrs and you negotiate a damage payment from there . This assumes the trees are wasted at construction (mulched , buried , burned … whatever) . If you were to sell the property to some 3rd party tomorrow that timber may have had a material impact on the sales price of the land.
Jussayin
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Thanks for the information. I will do a 1033 tax free exchange to ease some of the pain
Doc Hayworth
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Thru a tax CPA. They also directed me to several tax sites telling you what is taxed and what is not taxable. Every site I looked up stated damages are taxable.
I also tried to deduct the cost of legal fees. I found that somewhere around 2018, private individuals were no longer allowed to write off those fees. If I had my ranch in an LLC , I could have.
halfastros81
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I dunno how much $ your'e talking about and I'm not saying the advice you got wasn't correct however if it's enough $ to matter to you you might consider a 2nd opinion from a cpa or tax lawyer that has lot's of experience in just this type of thing . I don't think they'd charge anything for a short phone call to discuss the highlights of the matter .
Touchscreen
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We received a phone call Saturday afternoon from a representative of this Whitewater Eiger Express pipeline wanting permission to conduct a route survey for their new pipeline they said they are going to run across our property in Austin County and over to the east toward the Katy area and beyond. We hadn't received anything in writing from them, so the phone call was unexpected.

It was a little confusing at first because a couple of weeks ago we did receive a written request from a Mustang Express Pipeline for a survey, and the thinking was maybe it's somehow the same pipeline. Nope, two different new pipelines. Whitewater Eiger is taking another easement alongside the Whitewater Matterhorn easement they took a couple of years ago, and Mustang Express is taking a different new easement.

That will make a total of five pipelines running across what used to be the most desirable parts of the property from the standpoint of possibly building on someday.
Artesia0102
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Touchscreen,

Would you mind sharing who at Whitewater reached out to you? I am also an Austin County land owner. Our place is near Nelsonville. Whitewater came through our place too but since that time, the entity that owns the ranch has a new number and new address due to some health issues with the manager. I just want to stay on top of this. Crying shame they are coming through again as our pasture finally looks normal again. Email is in profile.

Thanks.
Mas89
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Make them send or deliver the request in writing. You will know for sure who you're dealing with.

Then request their insurance policy covering you and your land in case their contractor has an accident or does damage.

Mas89
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Doc Hayworth said:

Damages are taxable. I found that out last year.

Get another cpa with pipeline experience and re file possibly if it's significant.

damages can Usually be taken off the basis of your property and no federal income taxes due for the damage amount.
Touchscreen
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Mas89 said:

Make them send or deliver the request in writing. You will know for sure who you're dealing with.

Then request their insurance policy covering you and your land in case their contractor has an accident or does damage.



Yes, the representative who called was referred to our attorney we had used for Whitewater Matterhorn and who we recently engaged with again (just last week) to deal with this new Mustang Express pipeline. So now Whitewater Eiger will be another project added to the list of things for him to deal with.
Touchscreen
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Artesia0102 said:

Touchscreen,

Would you mind sharing who at Whitewater reached out to you? I am also an Austin County land owner. Our place is near Nelsonville. Whitewater came through our place too but since that time, the entity that owns the ranch has a new number and new address due to some health issues with the manager. I just want to stay on top of this. Crying shame they are coming through again as our pasture finally looks normal again. Email is in profile.

Thanks.

It was my brother who actually talked to him. Let me check and see if he remembers the name. He should still have at least the phone number the call came from.
ItsA&InotA&M
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I haven't dealt with easements in some time, but if I recall, for tax purposes, on a permanent easement, it's taxed as a sale of the property and subject to capital gains if price exceeds the land basis. Damages for temporary easements are not taxed up to the value of the land. But don't take my word, take the advice of an o&g tax CPA.
Doc Hayworth
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the way is was explained to me is I would have two options.

1) Don't pay tax on the damages and make sure to send a letter with the 1099 tax form explaining why the $$ are not included and that it is being applied against the original value of the land when I first possessed it. This avenue will increase the capital gains tax if I were to sell the property.

2) Go ahead and pay tax on all of it, and if the time comes that I have to sell, I would only have to pay tax on the sale minus the original land value.

It just sounds like it's a I'll get you now or get you later, your choice.
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