Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is.    The Honorable Governor of Texas, George W. Bush

I hate quotations. Tell me what you know.    Ralph Waldo Emerson

Tuesday, June 28, 2005

Has Anybody Seen My Ethics?

There's nothing quite so refreshing as an utter breakdown of ethics. Case in point.

I'm giving an estimate to very nice lady on a Saturday morning. We measure up her yard and talk a little about materials and styles and I ask if she has a survey plat handy so I can verify some dimensions. "Sure, come on in," she says, and off we go to take a look at it.

Slashing diagonally across the back yard of the home she closed on a week previously was a fifty foot easement. There was no other description of this easement, just the word "easement". Having done a job quite close by I realized immediately that underneath this easement was a 30" diameter high pressure natural gas transmission pipeline. "How interesting that the surveyor didn't further describe this," I thought to myself, "I'll just bet..."

"Did you know that there was a gas pipeline, a big one that runs to Madison, WI, in your backyard?" I ask.


"The realtor didn't mention this?"


"Your lawyer didn't say anything?"


"Well, apparently your surveyor wasn't very interested in making it clear to you either, because the type of an easement is included on the plat 99.99% of the time."

Now, If you read my curriculum vitae above, you might remember that I was briefly a RealtorĀ® and, though laws certainly vary from state to state, I'm pretty sure that one is to disclose such things that may materially effect the value of a property to the buyer. It seemed to me that this would certainly affect the desirability of the property, but I decided to try to find out if this was actually true.

The first thing I wanted to find out was, are these things safe? Here's the dope:

About 81 transmission pipeline incidents occurred and caused more $24 million in property damage in 2002 while 102 distribution incidents happened and costs $23 million, according to the Department of Transportation's Office of Pipeline Safety. Those combined accidents resulted in10 deaths and 50 injuries.

Utilipoint International

Most of the pipeline accidents are attributable to stress corrosion cracking, many of these happening within 20 miles of a compression station, which I gather is like an intermediate pumping station. The gas is hotter from being compressed and there are apparently some other chemical things going on just down system from these stations that aid the corrosion process. So, these things do get old. Some are abandoned, but quite often that means a new line running down the same route, which certainly affects homeowners significantly when they cross a populated area. They are tested with hydraulic pressure, and more recently robotic probes. Some do blow up, not many. A 30" one will light a candle 150' thick. This line runs 30' from my customer's house.

So who owns this pipe and how long has it been there? Are there any additional lines proposed for this route? Does the company who owns this line have safety issues? I tried to find some of this out. All I did was probably add a few paragraphs to my dossier with Homeland Security, as this is fairly well guarded information. I'm pretty sure a terrorist could easily figure out where pipelines are anyway, but there is no public map on the internet I can find. I did find one of Illinois for $395.00. I didn't buy it.

So that's none of my business, fine, so let's see if anyone has discussed the effect on residential property value a 50' easement and/or pipeline might have.

There is one and only one study of such a thing, done shortly after a residential park blew up in Bellingham, Washington on a nice, otherwise quiet day, killing three people. Values averaged 5% lower in general, spiking to 20% in the aftermath of a reasonably local accident, then settling again to the 5%. There is also a critique of this study by a scholar well connected the real estate industry questioning its methodology. That's it, near as I can tell.

What does the industry say about it? This question comes up in every "We're building a pipeline through your area" web site Q & A, every time with an answer similar to, "There is no historical evidence that the existence of a pipeline affects property values."

It's a non-answer, but the tone of it certainly suggests "no effect". This belief would necessitate your believing that no potential buyer would list the existence of a pipeline and/or 50' easement in a backyard on the negative side of the argument for execution or negotiating more aggressively the purchase of a home. No one might want to build an addition or swimming pool on the easement, no one is concerned about their landscaping or fencing being subject to removal in the case of repairs or the quite common reuse of the easement for another pipeline. No potential buyer will be concerned that the damn thing might just blow up some day.

Of course, if you don't tell any potential buyers about the pipeline, it quite likely won't have an effect!

But then suppose my customer, instead of buying a fence, wanted to plant a row of mature arbor vitae off of the standard utility easement. The contractor can tell where the standard utility lines are, and he's willing to wing it without a permit (people ask us to do this all the time). In go the claws of the hydraulic digger and BOOM!

Someone really should have told her, I figure. Although all these people will point out that the property's value is not affected by the pipeline, not one saw fit to mention it's existence, even though there are many ways a homeowner might endanger themselves and others in the normal course of improving their property. That they didn't means to me that we have a RealtorĀ®, a lawyer or two, a surveyor, and a bunch of corporations compromising their ethics and, in the process, endangering numerous lives.

What an endearing little snapshot of our greedy little society!


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