Previously I have discussed the revised Texas Railroad Commission (RRC) Rule 3.70 regarding permits for pipelines. You can access my previous blogs here and here. The RRC approved that new rule on December 3. 2014, and it went into effect on March 1, 2015. You can access the text of the new rule here.
There were many comments and suggestions made during the Public Comment period required by Texas law for any new administrative rule. The RRC included a few of these suggestions in the revised rule. However, there were a number of important comments and requests that were neither significantly addressed nor included in the revised rule. These include:
1. The Texas Land and Mineral Owners Association, along with other landowner groups, commented that the new rule does not address the shortcomings highlighted by the Texas Supreme Court in the recent Denbury Green case and that even with the changes, Rule 3.70 still amounts to “registration, not adjudication” and includes no meaningful review of the eminent domain authority. The TLMA suggested adding language for the pipeline company as follows: “Applicant understands and agrees that this registration is not determinative of Applicant’s authority to utilize the power of eminent domain to acquire right of way for the pipeline referenced herein.” They also suggested that the permit should include language stating that: “The RRC is not, by granting this registration, making any determination regarding Applicant’s authority to utilize the power of eminent domain to acquire right of way for the pipeline referenced herein.”
2. Several public comments suggested that the pipeline permit process should include a full investigation of whether the factual assertions in the permit by the pipeline company are correct.
3. A number of public comments indicated that there should be public notice given for a permit as well as a public evidentiary hearing so that affected landowners could have a chance to be heard and so the factual assertions in the permit by the pipeline company could be examined.
The RRC has stated that a pipeline permit is not an authorization to exercise eminent domain for pipeline easements and that the RRC classification of pipelines is used only to determine which RRC regulations apply to specific pipelines. However, when a landowner challenges a pipeline’s common carrier status in court, it is likely that a pipeline company will produce their RRC pipeline permit as evidence of their “common carrier” status. Perhaps the RRC comments to the new rule will eliminate that possibility.
The new RRC pipeline permit rule appears to have significant flaws. In the coming year, we may be able to get an idea of how the new rule functions and whether those flaws will create new problems for landowners.
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