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Workers prepare the site of a multibillion dollar petrochemical complex that Shell is building in Potter and Center townships, Beaver County on November 14, 2016.
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Building a pipeline, one landowner at a time

Andrew Rush/Post-Gazette

Building a pipeline, one landowner at a time

More than once, Greg Williams rose from his dining room table and declared he was done.

“To heck with it, they can take their pipeline and keep it,” he told his lawyer.

It had been months of buildup and letdown, months of thinking that he and his wife were about to sign a deal with Shell Pipeline Co. that would allow an ethane pipeline to run through their 37 acres in Beaver County on the way to the ethane cracker plant being built on the Ohio River. The money would be enough to pay off their mortgage — enough money that the couple didn’t want their real names used for this story, as they wanted to avoid disrupting the relationship.

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There were weeks when they were told not to travel because a contract could arrive at any moment. When Mr. Williams’ wife took their two young kids on vacation last summer, he hustled to secure a power of attorney for her just in case.

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All the while, the couple were watching another company, EQT, replace an old natural gas line on their property — not to their satisfaction. They were witnessing how pipeline construction schedules can slip when the ground freezes or when heavy rains turn dirt into mud.

Their marriage was feeling the strain, too. When he fielded calls about the pipeline contract, his wife suspected he wasn’t telling her the whole story or wasn’t saying it verbatim. They were both trying to read the tea leaves. What if they were missing something?

It got to the point where the couple would only discuss the pipeline on speakerphone.

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They knew that while Shell was negotiating with them, the company also was courting their neighbors to try to get a better price on a slightly different route. The tension of wanting to be picked but not being taken advantage of nearly gave them heart attacks, Mr. Williams said.

“This cracker plant’s gonna be huge,” he said. “So I want to get what I feel is fair, but I don’t want to make it so hard for them [that] they don’t come back and build a second, third, fourth pipeline.”

He doesn’t want to rock Shell’s boat, but even months after the couple signed the easement, he is feeling somewhat shell-shocked.

“It truly is big business vs. the little guy, and neighbor vs. neighbor,” he said. “They will make money for the next 40 years on this pipeline. The landowner makes it once.”

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Behind the scenes

By the time Shell filed its permit application with the state Department of Environmental Protection for the Pennsylvania portion of the 97-mile Falcon ethane pipeline, most of the easements along the route had already been signed. On Jan. 20, the DEP launched a 30-day public comment on the voluminous application, although several environmental groups and the Pittsburgh nonprofit FracTracker Alliance are asking the agency to extend that deadline.

Shell had two years to piece this project together, they argue, and the public should have more than 30 days to digest all that work.

View Map Fullscreen | How FracTracker Maps Work

The pipeline company started surveying its route even before its sister company, Shell Chemical Co., announced it was pulling the trigger on a $6 billion petrochemical facility that will slurp the ethane flowing out of Appalachian shale wells and turn it into plastic pellets.

From the start of the surveying, it would be years before Shell Pipeline would (or could) disclose to the public that the pipeline will traverse hundreds of streams and wetlands, and require boring dozens of tunnels under highways, creeks and the Ohio River.

The landowners who permitted their land to be surveyed in 2015 and those who began signing easements the following year knew what might be happening on their slice of land but didn’t have the full picture. They couldn’t have, because how the pipeline looked depended on whether they would sign the easements.

In a rare look at how a project like this comes together, the FracTracker Alliance and the Pittsburgh Post-Gazette were able to track the evolution of the Falcon pipeline from its early days to its now official route.

Documents available online through Shell’s contractor Aecom revealed how the route was adjusted to account for environmental impediments and reticent landowners. Shell surveyed twice the number of miles that would eventually end up in its pipeline route.

And for every landowner, there was a record.

Demands and fears

“Do not leave any stakes or flagging. Cows may eat them,” one land agent wrote about a property in Washington County.

“Unpredictable bull in pasture,” another warned.

A husband cautioned that his wife was nervous about people on the property, so any pipeline contractors coming by need to call her well in advance.

“Wear as much orange as possible,” one landowner advised pipeline contractors during hunting season.

In one case, a landowner had recently died and the survey company, Percheron, had to go through the mortgage company for permission.

Some landowners offered the use of their driveways — for an extra fee. Others wanted a say in where the pipeline is laid.

Through short notes recorded by land agents visiting nearly 2,000 properties over the past two years, the database of Falcon easements and survey documents available online through Aecom tells the story of landowners’ experiences, demands and fears.

These are people who, for the most part, want the pipeline to go through their land.

But Shell isn’t the first company to come calling in recent years, and the residue of the shale natural gas boom is all over these documents.

One Ohio landowner “had nothing good to say about his experience with Chesapeake” and promised that he would “deny any and all attempts to get any permission to do anything oil and gas related on their properties.”

Another landowner, “fighting with Kinder Morgan now, will not allow Shell to survey,” an agent wrote, referring to another pipeline company.

In the end, only a small number of people declined Shell’s advances, according to the data.

Virginia Sanchez, a spokeswoman for Shell Pipeline Co., said the response was similar across state lines — the Falcon pipeline will stretch through Ohio, West Virginia and Pennsylvania.

“Landowners declined the project on their land for various reasons,” she said, “including lack of interest, experience with other pipeline companies, inability to locate the line in a specific location due to environmental sensitivities and/​or contours of the property.”

Most requested only to be notified 24 hours to 48 hours before pipeline contractors arrive.

First came Bilik

Before Shell went knocking on doors to ask for easements, first came Ed Bilik, founder of Greensburg-based Western Pennsylvania Gas Leasing Consultants, “a consulting group created by oil and gas lawyers.” He’s a lawyer but he’s not his clients’ oil and gas lawyer, Mr. Bilik stressed. He’s “the landowner’s expert.”

The distinction, he claims, allows him to think more broadly than a single easement.

When he came to Beaver County in 2015, he came to build a market, Mr. Bilik said.

First, he called on his network of friendly farmers across southwestern Pennsylvania and asked if anyone from Shell had come around to survey their property.

Then he charted the likely route of the pipeline and set out to accumulate as many clients as he could along the path so he could gain some leverage over Shell.

“We just followed the surveyors,” he said.

The Falcon pipeline does not have the power to use eminent domain to take property for the project. So Shell had to secure the consent of each landowner along the way.

Mr. Bilik went door to door. If homeowners told him they were not interested in a pipeline, he could take that information to their neighbor as an advantage.

He showed up at the negotiating table with 41 properties under his belt. In Aecom’s database, he had his own section.

The story was the same as with any other pipeline, Mr. Bilik said. A charming young man or woman comes to the house with a conspicuously displayed checkbook and gives the company’s low-ball offer and standard agreement. Shell started out offering $40 per foot for the right to lay two pipelines, Mr. Bilik said.

He urged his clients to hike up the price and grant an easement for only one pipeline — the second could be negotiated separately. He paid attention to the size of the workspaces that Shell was proposing on each property; larger space might mean a starting-off point for a horizontal directional drilling operation, a much more involved operation than a straight cut.

“A bore pad — that’s a big dollar amount,” Mr. Bilik said. “They’re going to be there for six months.”

Shell was a tough negotiator, he said. It was hard to get the company to budge financially. But the company was “very receptive to taking landowner recommendations,” he said, like what kind of grass and fertilizer they would like.

“There are some companies who don’t want to be bothered with it,” he added.

Ms. Sanchez said Shell’s land agents often heard the refrain: “Shell does it different.”

Mr. Bilik wouldn’t disclose how much his clients received from the company, but assured that it was far above Shell’s initial offer.

“We exceeded that multiple times,” he said.

Leverage

The Shell Falcon pipeline may be the 10th pipeline to go through Tom Kotyk’s 350-acre property in Houston, Washington County. There have been so many, he can’t recall offhand.

Mr. Kotyk was one of the last landowners to sign an easement with Shell — not because he was hesitant, but because he knew he had leverage.

His uninhabited parcel of land — bought 20 years ago in hopes of building a hunting cabin there one day — is across the street from MarkWest Energy Partner’s massive natural gas processing complex. When the complex was built nearly a decade years ago, Mr. Kotyk’s hunting plans changed. Instead of a retirement parcel, the land turned into a money-making machine.

He has made enough through leases and easements to buy another property, in Buffalo Township, to host his future hunting cabin dream.

When Shell first approached him, Mr. Kotyk was in the middle of negotiations with Sunoco on another pipeline, a land agent wrote.

“I’ve dealt with so many different pipeline companies, I have my own standard agreement,” Mr. Kotyk said.

From an emotional standpoint, he represents the opposite side of the spectrum from Mr. Williams.

Mr. Kotyk’s “financial freedom” — the term that Mr. Williams uses to describe his Shell easement — doesn’t depend on this.

His family won’t be living 800 feet away from the pipeline. He wasn’t staying up nights wondering if Shell would call. He knew it would. His land is the first stop for the ethane as it leaves MarkWest’s plant and heads 34 miles to the Shell petrochemical complex in Potter Township, Beaver County.

When he talks to neighboring landowners about the project, Mr. Kotyk said the conversation is generic. Maybe they discuss certain terms in their easements, but they never talk about the money.

“Years ago when this first started, we talked money,” he said. “But now we don’t because it’s kind of like every man for himself.”

Anya Litvak: alitvak@post-gazette.com or 412-263-1455.

First Published: January 29, 2018, 11:45 a.m.

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Workers prepare the site of a multibillion dollar petrochemical complex that Shell is building in Potter and Center townships, Beaver County on November 14, 2016.  (Andrew Rush/Post-Gazette)
Workers prepare the site of a multibillion dollar petrochemical complex that Shell is building on the Ohio River in Potter and Center townships, Beaver County on November 14, 2016.  (Andrew Rush/Post-Gazette)
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