TSCRA: New common carrier rule only adds to paperwork

By Leslie Kinsel

Since the Texas and Southwestern Cattle Raisers Association (TSCRA) was established in 1877, one of the association’s top priorities has been to represent landowners by working to preserve and protect private property rights. This goal remains vital today as we monitor issues that could adversely affect the important rights held by ranchers and agricultural producers as stewards of our nation’s land.

TSCRA has recently been monitoring a new rule proposed by the Railroad Commission of Texas, in the wake of the 2013 Denbury case.  This new rule attempts to clarify how oil and gas pipeline companies can obtain “common carrier” status when applying for a permit to operate a new pipeline.

Essentially, a pipeline operator transporting oil (or certain other products) “to or for the public” is a common carrier, and is thereby granted the right and power of eminent domain. This critical power carries with it the authority to seize private land for the pipeline right-of-way.

Currently, pipeline companies seeking the eminent domain rights of a common carrier merely register with the Railroad Commission by checking a few boxes on a T-4 permit application. Under the new proposed rule, pipeline companies would be required to submit documentation supporting their claim to be a common carrier, and the commission would have 45 days to review applications.

While the proposal may sound like a step in the right direction, TSCRA doesn’t believe it addresses many of the key issues landowners face when pipeline companies decide to lay pipe across private land. In fact, the new rule only adds paperwork to the current common carrier registration process.

TSCRA submitted comments to the Railroad Commission regarding the rule proposal. TSCRA stated that the revised T-4 application should include an acknowledgement from the applicant pipeline that they understand and agree the permit to operate a pipeline does not give a company the authority to utilize the power of eminent domain to acquire private property for its pipeline.

In other words, the Railroad Commission, in granting a permit, would not make a determination whether the pipeline is or is not in fact a common carrier. That question is far too important for a routine application review. Landowners need to retain their crucial right to contest in a court whether or not a planned pipeline is truly for a public use.

However, the right to make a court challenge is only meaningful if the landowner has timely notice of a pipeline project. TSCRA’s comments stressed that pipeline companies seeking a T-4 permit should be required to give potentially affected landowners actual notice by first class mail within 10 days of the application. The notice should describe exactly how the pipeline could affect the landowner’s property. Additionally, the commission should adopt objective routing standards, similar to those used by power lines.

Lastly, it should be clear that an individual T-4 permit can apply to only one distinct pipeline or gathering system. If a company receives common carrier status for one pipeline project, it does not automatically give them the power of eminent domain for another project.

It is TSCRA’s hope that the Railroad Commission of Texas will seriously consider our comments before adopting the new rule proposal. Ranchers and agricultural producers have always been stewards of the land as they work to provide an affordable, safe and abundant supply of food worldwide. We must make certain their private property rights are respected so they can continue doing what they do best. TSCRA will continue monitoring the Railroad Commission’s rule proposal and strive to keep our members informed.

Leslie Kinsel is the TSCRA Legislative and Tax Committee chair.