Texas Railroad Commission proposes changes to 'common carrier' designation

Texas Railroad Commission

Regulates state’s network of pipelines

New rules proposed for clarification of “common carriers,” a status indicating the pipeline is available for public use and therefore allowing the company to seize private land using eminent domain.

 

The proposal July 25, would require pipeline companies to submit a sworn statement supporting its common carrier claim. The commission would have 45 days to review. But landowners would not get a hearing with the commission and the commission would not accept public comments.

Currently companies only have to mark common carrier on a permit application using the honor system.

Common carrier pipelines provide access to their line to other companies for a market-rate fee, and thus are said to be for the public good and have the authority to take private property.

 

Landowners would still be able to challenge in court.

Pipeline operators say tighter regulations will slow the transport of resources and landowners want more protection from companies invoking eminent domain.

Today the only process is legal battles in court.

2011 Texas Supreme Court decision

David Holland case

As the Record has reported …

June 2008, the case involves Southeast Texas landowners, known as the Texas Rice Land Partners Ltd., and plans by Denbury Green Pipeline Texas LLC to construct a pipeline for transporting carbon dioxide.

 

The pipeline company tried to take the farmers’ land under the doctrine of eminent domain, stating it had been given status as a common carrier by the Texas Railroad Commission.

In Jefferson County, Judge Floyd ruled Denbury Green was a common carrier with the power of eminent domain. The case has been appealed all the way to the Texas Supreme Court and then sent back to Floyd’s court.

 

Upheld landowner’s right to challenge the pipeline company’s eminent domain claim

"Merely registering as a common carrier does not conclusively convey the extraordinary power of eminent domain or bar landowners from contesting in court whether a planned pipeline meets the statutory common carrier requirements," the court saidThe proposed rule would give the Commission the ability to revoke a permit if a company violates the law, giving the Commission enforcement powers that it currently doesn’t have. It would also mandate permits must be renewed on an annual basis.

 

It quickly became an issue with the Keystone Pipeline, which TransCanada claimed to be a Texas common carrier and used eminent domain for its private international pipeline.

 

 

Steve Brown, Democratic nominee for Railroad Commissioner, is calling on the Texas Railroad Commission to include more transparency and notification procedures in its “common carrier” rule changes.

 

Steve Brown released the following statement:

“First, it says a lot about this broken agency that it took the Texas Supreme Court to highlight the need to do more to protect Texas’ landowner rights. The process for granting common carrier status should always be rigorous, open and transparent. That includes notifying affected landowners and municipalities via mail of a pending application. Notices should also be placed in the local paper and other periodicals to ensure that the public is made aware, and the Commission should post a link to applications on the front page of its website. These changes would ensure that key stakeholders are kept informed early in the process.

“In addition, any rule change must allow for sufficient opportunities for public comment prior to determining the final status of a case. During that period, affected parties should be able to learn more about the specifics of a proposed pipeline, and whether it should be classified as a common carrier.

“Finally, the Commission’s decision should not be the final word. The new rule should not preclude landowners from utilizing the Texas courts to challenge a pipeline’s authority to condemn privately owned land.”
The proposed rule appears in the Texas Register today and public comments will be accepted through 12 noon on August 25 on the Commission’s web site here. Select the rule to amend the T4 pipeline permit procedures and comments should refer to Gas Utilities Docket No. 10366.