Generally, yes, although they have to provide you with just compensation. In Texas, energy companies have the power of eminent domain when building or operating public projects. In New Mexico, oil and gas pipelines have clear eminent domain authority, and renewables may be catching up.
What is eminent domain? It is the government’s sovereign power to use land as it sees fit, as long as any landowners who are harmed receives fair, full compensation for the value of their properties. It is also referred to as “condemnation” or “government takings.” In both Texas and New Mexico, the government has delegated that power to energy companies for the purpose of a public project.
Do landowners have no choice but to sell? You do have rights. First, you can challenge whether the company that wants to take your land has actually been given eminent domain authority. Second, you can challenge whether the project is truly public in nature. In New Mexico, you may be able to challenge the scope of the project and whether it meets the legal requirement to do the least damage to private or public property that is consistent with proper use and economical construction.
In addition, you can negotiate with the energy company to limit the amount of your land they use. For example, you could agree to grant an easement or right of way to your property, which leaves ownership in your hands, rather than selling the property altogether.
If we have to sell, what should we do? What are our rights?
If you have exhausted your challenges to the company’s authority and the project’s nature and scope, or if your lawyer has advised you to give up those challenges, your next step is to negotiate a good deal for your land. Again, this could involve negotiating to grant an easement or right of way, rather than a full sale.
In both Texas and New Mexico, the landowner has the right to full, fair and just compensation for their land. The initial offer from the energy company may not be any of those things.
In most cases, full, fair and just compensation is the value of the land in an open market. In other words, it’s the amount a willing buyer would pay a willing seller for the highest and best use of the land.
That number can be hard to determine, but it will almost certainly be more than the energy company’s first offer. To protect your financial interests and, if possible, limit the taking of your land, you should hire an experienced attorney who knows how land is valued in west Texas and eastern New Mexico.
Before you sign an agreement with an energy company, learn your rights. You may not have to give up all of your land. You may be able to continue to use some of your land concurrently with the energy company’s project – or you may not. Find out for sure.