a pipeline company gets down the road with engineering and survey- ing, the less likely they are going to change the route.”
Among pipeline companies, who has the power of eminent domain and who doesn’t? Entities that have power of emi-
nent domain are common carrier pipeline companies and gas utili- ties, Zabel said. These can be gath- ering or transmission pipelines. He provided a little history to
explain why certain types of pipe- line companies have the power of eminent domain in Texas. “The reason that all came about was Rockefeller and Standard Oil back in the 1900s. He had a monopoly on the crude oil pipelines and no one in Texas could get their crude into a pipeline. He was basically freezing the producers out of getting their product in.” So, Texas’ policy makers of the time said, “Every-
Tom Zabel, Zabel Freeman, and Zach Brady, Brady & Hamilton, LLP, were the panel- ists for the eminent domain discussion at the Private Property Rights Town Hall.
nent domain. That really is something I think needs to be part of the conversation on common carrier. We need to have that same level of proof for all products.” Zabel referred to the case of Texas Rice Land Partners,
body who engages in the business of transporting crude in Texas is a common carrier because we want open-access pipelines,” he said. Over time, additional products were added to this category – CO2, hydrogen, coal slurry – which has never happened – and natural gas liquids.” Brady summarized, “If thou art a crude pipeline,
thou art a common carrier – period, paragraph the end, no matter whose product goes in it or who uses it at the other end. That’s what the Natural Resources code says and [Tom] has successfully convinced a court to follow what the law is.” If a pipeline company has the power of eminent
domain, Zabel said, then they can ultimately route the pipeline where they want, although there are some checks and balances in the process. “But, it’s very hard to beat the routing of a condemnor,” he said. Brady agreed, saying, “The process is not predictable
and in current law, not transparent. And, it’s different for 2 projects that impact landowners exactly the same way,” whether the pipeline will carry natural gas or crude. He added, “But on the crude side, even if it was a completely private line, or a segment of a line that wasn’t going to have a common carrier status in terms of other people’s products, it still has the power of emi-
tscra.org
Ltd. v. Denbury Green Pipeline-Texas, LLC, settled by the Texas Supreme Court in 2011. This case required Denbury to provide external proof that its CO2 pipeline was a common carrier. Zabel said, “Even though the Supreme Court said
that case was limited to CO2 lines, in actual practice we haven’t seen that across the board. Whether a crude line, natural gas liquid line or refi ned products line, most sophisticated landowner attorneys are applying the Denbury Texas Rice test of third-party shippers to every kind of pipeline. I think what we’re hearing from Zach is that he’d like to see it all uniform and have the same standards apply across the board to all pipeline.” Brady agreed, “I have been able to apply that to a
crude line at least once, and that was because even though it was a crude line and was promoted as a crude line, the pipeline company had the word natural gas in their easement because they wanted to have all the fl exibility they could. That’s very common when we’re negotiating these easements. It fi rst lists every petroleum product known to man and anything man thinks of later. When negotiating, we limit the number of products that can be transported.”
Transmission lines – consider every route Malewitz turned the discussion to the big issues facing landowners on potential routes for new power
July 2014 The Cattleman 61
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