Articles Posted in Pipelines

Published on:

Landowners in Texas challenged the right of pipelines to condemn easements for intrastate lines in Texas in Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas, LLC, decided in 2011. The Texas Supreme Court held that a pipeline seeking to exercise the power of eminent domain must prove that the pipeline will be put to a “public use.” The case caused a stir among pipeline companies and their counsel, and resulted in new regulations at the Texas Railroad Commission, which approves intrastate pipeline projects, and efforts to bolster pipeline eminent domain authority by legislation.

A group of landowners has now filed suit challenging the Federal Energy Regulatory Commission’s grant of eminent domain authority for interstate pipeline projects. In Bold Alliance et al. v. FERC et al., No. 1:17-cv-01822 (Bold Alliance v. FERC), in the U.S. District Court for the District of Columbia, the plaintiffs allege that FERC does not require pipeline companies to demonstrate that their projects serve a “public use.”   The plaintiffs seek to enjoin FERC from issuing certificates of need to Mountain Valley Pipeline for its proposed 301-mile 42-inch gas line in West Virginia and Virginia,  and to Atlantic Coast Pipeline for its 564-mile 42-inch line in West Virginia, Virginia and North Carolina.

After all of the concern created by the Texas Supreme Court’s 2011 decision in Denbury, the Court this year finally held that Denbury did in fact have the power to condemn Texas Rice Land Partners’ property. The Court held that “the evidence adduced by Denbury Green on remand established as a matter of law that there was a reasonable probability that, at some point after construction, the Green Line would serve the public by transporting CO2 for one or more customers who will either retain ownership of their gas or sell it to parties other than the carrier.” This is not a high hurdle to overcome. It will be interesting to see what test the DC Court applies to determine whether the projects there challenged will serve a public use.

Published on:

Denbury Green Pipeline and Texas Rice Land Partners have now fought for ten years over Denbury’s right to condemn an easement across Texas Rice’s land for a CO2 pipeline. The fight is once again, for the third time, back before the Texas Supreme Court.

The fight began in 2007, when Texas Rice challenged Denbury’s right to condemn an easement for its pipeline. That case went to the Supreme Court, which issued a controversial decision holding that Denbury had not proven its right to condemn the easement.  Texas Rice Land Partners, Ltd. v. Denbury Green Pipeline-Texas, LLC, 363 S.W.3d 192 (Tex. 2012). The case went back to the trial court and through the Beaumont Court of Appeals, and in January of this year, the Supreme Court issued its second opinion, Denbury Green Pipeline-Texas, LLC v. Texas Rice Land Partners, Ltd., 510 S.W.3d 909 (Tex. 2017), this time ruling that Denbury had proven its right to condemn as a matter of law.  See my discussion of these cases here. The case was remanded for trial on the amount of compensation to be awarded for the easement.

The most recent dispute began when Denbury sought access to its pipeline for inspection and Texas Rice refused. Texas Rice argued that Denbury had no right of access because it had been enjoined from taking the compensation funds deposited by Denbury into the court registry eight years earlier. Denbury then asked the trial court to allow it access to the pipeline, but the trial court sided with Texas Rice, agreeing that it had not complied with the requirements of condemnation statutes because Texas Rice was enjoined from withdrawing the condemnation award. Denbury then sought mandamus relief in the Beaumont Court of Appeals, which ruled that it did not have jurisdiction. Now Denbury has sought mandamus relief in the Texas Supreme Court, Case No. 17-0556.

 

 

Published on:

Southwest Research Institute in San Antonio is developing smart technology to improve the industry’s ability to detect pipeline and industry facility emissions of hydrocarbons into the atmosphere. The system uses smart computer algorithms that learn to distinguish emissions from natural atmospheric conditions and report them to be repaired. Watch the story here. Great idea. Let’s hope the industry embraces it.

Published on:

The protest movement over the Dakota Access pipeline in North Dakota has moved to West Texas. According to the Houston Chronicle, three camps are taking shape – two camps to protest the proposed Trans Pecos pipeline, near Alpine, and one camp in Toyahvale, home to the famous spring and pool at Balmorhea State Park, to protest Apache’s plan to develop its Alpine High discovery. Energy Transfer Partners, the owner of the Dakota Access line, is also the developer and owner of the Trans Pecos line. Some of the protesters who camped out in North Dakota are moving down to the camps in Reeves County. The segment of the Dakota Access line being protested in North Dakota has been at least temporarily halted by the Corps of Engineers, but efforts to block construction of the Trans Pecos line have so far been unsuccessful.

Efforts to protect the spring at Balmorhea State Park focus more on use of fresh groundwater for hydraulic fracturing than on risk of pollution of the springs. Apache claims it will not tap the spring’s aquifer but will use deeper brackish water for fracking.  But protestors remember Clayton Williams’ use of unrestricted pumping rights from the aquifer that supplied Comanche Springs in Fort Stockton. In 1951, Clayton Williams Sr. drilled 52 irrigation wells into the aquifer that fed the springs, and within hours the spring flow slowed to a trickle, and has never recovered. The Texas Supreme Court held that, under Texas’ “rule of capture,” Williams had the right to pump as much water as he wanted and had no liability for drying up the springs.

More recently, Clayton Williams Jr. has sought to sell water from these same wells for municipal supply to the City of Midland, but so far the Middle Pecos Groundwater Conservation District has blocked his efforts. The case is now pending on appeal in the El Paso Court of Appeals, Cause No. 08-16-00382-CV, Fort Stockton Holdings, L.P. v. Middle Pecos Groundwater Conservation District.

Published on:

The Denbury case that caused such a stir on the Texas Supreme Court’s first review of the case, is back before the Court again. In the first Denbury opinion, the Court held that a pipeline seeking to assert eminent domain authority had to make a showing that it was in fact a “common carrier.” The case went back to the trial court which again granted summary judgment for the pipeline company. But the court of appeals reversed, holding that fact issues existed on whether Denbury is a common carrier.

Our firm represents Texas Rice Land Partners in the appeal, and Bill Christian argued the case. The oral argument can be viewed here.

Published on:

Trans-Pecos Pipeline is pursuing condemnation proceedings to acquire right-of-way for its pipeline, a project of Energy Transfer Partners to build a 143-mile, 42-inch pipeline from Fort Stockton into Mexico. Presidio County landowner John Boerschig is challenging the company’s right to use eminent domain to acquire an easement across his ranch. Last week he sued the company in U.S. District Court in Pecos, contending that Texas laws on eminent domain deny him due process of law in the condemnation process. He argues that pipeline companies asserting the right to use eminent domain should have to prove their right to condemn before they can obtain a judgment awarding an easement. Boerschig’s attorney Renae Hicks said  “It’s a no-strings-attached, standard-less delegation of government power to a private entity. There’s no accountability, they do not have to report to anyone.” He argues that a pipeline’s status as a public utility, which under Texas law entitles it to use eminent domain, can be legally challenged only after the condemnation award of the special commissioners appointed to determine the amount owed for the condemned easement. After the commissioners’ award, the pipeline’s right to condemn can be challenged in court, but in the meantime the pipeline has the right to tender the amount awarded by the commissioners into court and begin laying the pipeline on the easement awarded. So the pipeline can be constructed even while the landowner is challenging the company’s condemnation authority.

That is what happened in the latest condemnation case decided by the Texas Supreme Court, Texas Rice Land Partners v. Denbury, , 363 S.W.3d 192 (Tex. 2012). In that case, Denbury sought to condemn an easement for a pipeline that would carry carbon dioxide across Texas Rice Land’s property. Texas Rice Land challenged Denbury’s right to condemn an easement; the trial court sustained Denbury’s authority, and it built its easement. But the Supreme Court held that Texas Rice Land had the right to challenge Denbury’s use of eminent domain, whether it was a common carrier. It remanded the case to the trial court for trial on that issue. On remand, the trial court again agreed that Denbury had eminent domain powers, but the Beaumont Court of Appeals  reversed and remanded again, 457 S.W.3d 115 (Tex.App.-Beaumont 2015). Denbury has appealed to the Texas Supreme Court, which granted Denbury’s petition for review on April 1. In the meantime, Denbury has constructed its pipeline across Texas Rice Land’s property and is using it to transport carbon dioxide.

For more on the Denbury case, read my posts here and here.

Published on:

Texas Rice Land Partners v. Denbury is back before the Texas Supreme Court. The case that caused such controversy when originally decided by that court in 2012, involves when a pipeline company can exercise the right of eminent domain to condemn pipeline easements.

Denbury decided to build a pipeline to carry carbon dioxide from Mississippi to the Hastings Field in South Texas, to inject in the field for tertiary recovery. Denbury sought an easement across land owned by Texas Rice Land Partners, but Texas Rice refused. Denbury sought to condemn an easement across the property, but Texas Rice claimed that Denbury did not have authority to condemn an easement. In its first decision in the case, 363 S.W.3d 192 (Tex. 2012), the Texas Supreme Court held that Texas Rice had raised a fact issue as to whether Denbury had authority to condemn, and it remanded the case to the trial court for further proceedings.

Prior to the Denbury decision, pipeline companies routinely asserted the right to condemn by filing a form with the Texas Railroad Commission, form T-4, checking a box to say that the owner of the pipeline to be constructed elected to be a “common carrier” pipeline. A “common carrier” is a pipeline that holds itself out to transport oil, gas, or in Denbury’s case CO2, for others for hire. In the Denbury decision, the Court said that filing this form was not enough to grant condemnation powers:

Published on:

Google has teamed up with the Environmental Defense Fund to detect leaks in gas lines in the Los Angeles Area, Boston, Indianapolis, Staten Island, Syracuse, and Burlington, Vermont. Google attached methane detectors to the cars it uses to create its street map images and has mapped the locations where it found levels of methane high enough to indicate pipeline methane leaks. A great use of new technology for a public purpose. View Google’s maps here.  EDF has teamed up with industry and scientists to attack methane emissions, part of EDF’s efforts to combat global warming.

Published on:

The Texas Railroad Commission has adopted amendments to its pipeline permits rule, 16 TAC Sec. 3.70. The amendments require pipeline companies to submit documentation to support their claim that they will operate the line as a common carrier or gas utility.

In Texas, pipelines have the right to condemn pipeline easements for lines that are common-carrier or gas-utility lines. Until the Supreme Court’s decision in Texas Rice Land Partners v. Denbury in 2011, pipelines assumed that all they had to do in order to exercise the right of eminent domain was file a form at the RRC – a Form T-4 – stating that the proposed line would act as a common carrier or gas utility. In Denbury, the court said that filing the form is not enough.

The court in Denbury first held that a pipeline does not acquire condemnation authority merely by obtaining a permit from the Railroad Commission and subjecting itself to that agency’s jurisdiction as a common carrier. The court then held that in order for a pipeline to have condemnation power it must serve a public purpose, and to serve a public purpose, “a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than the carrier.” Once a landowner challenges its right to exercise eminent domain, “the burden falls upon the pipeline company to establish its common-carrier bona fides if it wishes to exercise the power of eminent domain.”  The court said that the question of whether the pipeline is dedicated to a “public use” is ultimately a judicial question.

Published on:

The Texas Railroad Commission has published a proposed rule that will change how pipelines are classified as “common carriers” and “gas utilities.” That classification determines whether pipelines can exercise the power of eminent domain — the power to condemn rights-of-way for pipelines.

In 2011, the Texas Supreme Court held in Texas Rice Land Partners v. Denbury Green Pipeline-Texas, LLC that the Railroad Commission’s method of classifying pipelines as common carriers and gas utilities was not sufficient to grant them eminent domain authority. The court held that, in order for a pipeline to have condemnation powers, it must serve a “public purpose,” and that in order for a pipeline to serve a public purpose, “a reasonable probability must exist, at or before the time common-carrier status is challenged, that the pipeline will serve the public by transporting gas for customers who will either retain ownership of their gas or sell it to parties other than the carrier.” Once a landowner challenges its status as a common carrier, “the burden falls upon the pipeline company to establish its common-carrier bona fides if it wishes to exercise the power of eminent domain.” The court held that the RRC’s policy of classifying pipelines as common carriers or gas utilities based solely on the pipelines’ checking of a box on a form filed with the RRC was not sufficient to establish the public purpose of the line. 

Since Denbury, the pipeline industry has struggled to find a way to efficiently establish pipelines’ common-carrier status without having to litigate the issue with every landowner it wants to cross over. Initially the industry sought legislation authorizing the RRC to have one hearing to establish that a proposed new line will in fact qualify for common-carrier status. Under the bill, that determination would then be binding on all landowners whose property will be crossed by the pipeline. Those landowners would be given the opportunity to participate in the hearings; notice of the hearings would be given by publication in local newspapers. The Texas Farm Bureau, the forestry industry, and other landowner groups opposed the bill. Most major oil and gas associations favored the bill. The bill never made it out of committee.

Contact Information