Published December 15th, 2020 by Budd-Falen Law Offices, L.L.C.
Easements for transmission lines and oil and gas pipelines help grow and sustain portions of Wyoming’s economy. However, when purchasing a property for ranching or farming, a primary concern is whether there are these types of encumbrances on the property that could interfere with your operations. Typically, these right-of-way easements are permanent property interests in the real property, regardless of whether any infrastructure was ever built or if it was built but has not been used for many years. These old easements have the potential to cause a lot of headaches and expense in dealing with the easement holder if and when they decide to utilize the easement. The Wyoming legislature should adopt legislation to provide for the termination of old, unused easements for transmission lines and oil and gas pipelines.
Prior to the 1980s, it was not uncommon for easements in Wyoming to grant a right-of-way over an entire section of land, or a number of sections of land, with no exact alignment for the right-of-way being identified. These easements granted the right to install one or more pipelines or telephone lines at any location to be identified by the Grantee at any time. This is exemplified by this language from an easement for an oil and gas pipeline in Niobrara County in the 1950s:
“The right to lay, construct, operate, inspect, maintain, repair, renew, change the size of and remove a pipe line and all appurtenances thereto for transportation of oil, petroleum, gas, the products of each of the same, water, other liquids and gases, and mixtures of any of the foregoing, at a location and on a route to be selected by Grantee.”
“The right, at any time, to lay, construct, operate, inspect, maintain, repair, renew, change the size of and remove additional pipe lines on, in, over, and through the above described land, upon payment of the consideration above recited for each additional line so laid; provided, that each such additional line shall be subject to the same rights and conditions as the original line.”
“The right of ingress and egress in, on, over, across and through said above described land, and any adjoining lands owned by GRANTOR, for any and all purposes necessary or convenient to the exercise by GRANTEE of the rights and easements herein granted.”
The Wyoming legislature has already acknowledged such broad grants, with no location identified or limitation on the time-period for identification of the location , are problematic. Pursuant to Wyo. Stat. § 34-1-141, easements that do not specifically describe the location of the easement are null and void and of no force and effect unless the agreement provides for the location of the easement to be identified within one year of the effective date of the easement. However, this statute only applies to easements created after the effective date of the statute, May 20, 1981. See Edgcomb v. Lower Valley Power and Light, Inc., 922 P.2d 850 (1996); Mueller v. Hoblyn, 887 P.2d 500 (1994); Wyo. Stat. § 34-1-141.
Wyo. Stat. § 34-1-141 applies broadly to all easements created after May 20, 1981, regardless of the purpose of the easement. However, under current Wyoming law, permanent easements with indefinite location terms created before that date are valid until terminated. There are very limited ways an easement can be terminated such as by operation of law when the dominant and servient estates merge, by an express agreement between the easement holder and the property owner to terminate or release the easement, or by abandonment. Unfortunately, these are not likely to be viable options for a property owner seeking to terminate an old easement on their property. Even if the current owner of an old, unused easement can be located, reaching an agreement to terminate an easement can be complicated. Additionally, simple nonuse of the easement, no matter for how long that nonuse continues is not sufficient for the abandonment of an easement under common law principles in Wyoming. Mueller, 887 P.2d at 505 (citingRestatement of Property, § 504 (1944). For an easement to be terminated by abandonment, there must be conduct illustrating an intentional relinquishment by the easement owner. Id.
The Wyoming legislature should consider adopting legislation to provide a remedy to property owners to terminate old, unused easements for transmission lines and oil and gas pipelines encumbering their property. Wyoming would not be the first state to adopt legislation to terminate unused easements. For example, North Carolina recently adopted a statute to terminate unused easements owned by a utility company. Under N.C.G.S.A. § 62-193, a property owner, whose land is encumbered by a utility easement for which construction has not been commenced by the utility company within 20 years of the date of the easement, can seek an order from the Public Utilities Commission to terminate the easement. Under this North Caroline statute, the utility company can prevent termination of the easement if it can prove that the easement is necessary or advisable for the utility company’s long-range needs. Id. Additionally, if the property owner is successful in having the Public Utilities Commission determine that the easement should be terminated, the property owner must pay the utility company the current fair market value of the easement.
In a slightly different context, South Dakota has adopted legislation placing the burden on the owner of a severed mineral interest to prevent abandonment. See S.D.C.L. § 43-30A, et seq. (Abandoned Mineral Interests). Although the South Dakota statue broadly defines “mineral interest,” it encompasses mineral interests that are real property interests which is akin to easements. Additionally, similar to an easement, when a mineral interest is severed from the surface dominant and servient estates are created. Under the South Dakota Abandoned Mineral Interests statute, a “mineral interest is abandoned if it has not been used for a period of twenty-three years or more. Title to an abandoned mineral interest vests in the owner of the surface estate in the land in, or under, which the mineral interest is located on the date of abandonment.” S.D.C.L. § 43-30A-2.
The statute defines a variety of actions constituting “use of interest,” including recording a statement of claim. S.D.C.L. § 43-30A-3. Recording a statement of claim within the twenty-three-year period is sufficient to prevent abandonment of the mineral interest even if no other actions or use occurs. S.D.C.L. § 43-30A-3, 4. If the surface owner seeks to succeed in ownership for an abandoned mineral interest, they must give notice of the lapse in the mineral interest both by mail to the last known address of the mineral interest owner and by publication. S.D.C.L. § 43-30A-6. To prevent abandonment after the notice and publication are completed, the mineral owner must record a statement of claim within sixty days. S.D.C.L. § 43-30A-5.
The statutes discussed in this article illustrate that there are numerous ways the Wyoming legislature could address the issue of old, unused transmission line and oil and gas pipeline easements. For example, the legislature could amend Wyo. Stat. § 34-1-141 to apply retroactively to transmission and pipeline easements created prior to May 20, 1981 that provide for future construction of facilities with no location identified and which were never built. This could be accompanied by a grace period of one year to allow easement holders to comply with location requirements. Alternatively, for facilities constructed and then later abandoned, the legislature could impose a burden on the easement holder to assert their interest in an easement not being used to ensure that property owners are aware of current interest holders and to potentially provide greater use of the property by terminating easements no one is actively utilizing. Finally, for old, unused transmission line or oil and gas pipeline easements, the legislature can create a process whereby easements that are not being used and which are not necessary for a transmission line or oil and gas pipelines long-term needs can be terminated, with compensation if appropriate.
Although there is no one answer on how to address terminating unnecessary and unused encumbrances, there are many options that the legislature can and should consider.
Teresa L. Slattery
Falen Law Offices, LLC
 Teresa L. Slattery is an Attorney with Falen Law Offices, LLC with a primary focus on property rights, environmental, and natural resources law. Falen Law Offices, LLC, has attorneys licensed to practice law in Colorado, Idaho, Illinois, Montana, Nebraska, New Mexico, North Dakota, South Dakota, and Wyoming. This article should not be understood to state or imply that any lawyers of this law firm are certified as specialists in a particular field of law. Colorado does not certify lawyers as specialists in any field. The Wyoming State Bar does not certify any lawyer as a specialist or expert. Anyone considering a lawyer should independently investigate the lawyer’s credentials and ability, and not rely upon advertisements or self-proclaimed expertise. This article is informational and is not legal advice. Use of this article or contact with this law firm does not create an attorney-client relationship.
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