RRC Adopts New Pipeline Permit Rule

Pipeline Operators Must Verify Common Carrier Status When Applying for T-4 Permit

Texas Railroad Commission (RRC) commissioners have adopted pipeline permit rule amendments designed to clarify how a pipeline operator may be classified by the commission as a common carrier*. Common carrier pipelines in Texas are pipelines which are contracted to carry crude petroleum, gas or carbon dioxide for hire.

The rule amendments require pipeline operators to verify their claim to be a common carrier when applying for a T-4 Permit to operate a pipeline or when renewing, amending or canceling an existing permit.

Commissioner Barry Smitherman said, “The Commission’s T-4 Permit to Operate is a permit to operate a pipeline in Texas. It does not change the rights of a property owner nor does it grant eminent domain powers to a pipeline operator. Our new rules require an attestation from the operator of their knowledge of Texas eminent domain laws and the Texas Landowners’ Bill of Rights.”

The adopted rule amendments take effect on March 1, 2015, and include the following requirements:

  • permit applications must now include additional information including requested classification and purpose of the pipeline or pipeline system as a common carrier, a gas utility or private line operator;
  • permit applications must include a sworn statement from the pipeline applicant providing the operator’s factual basis supporting the classification and purpose being sought for the pipeline;
  • if applicable, the pipeline operator must submit documentation such as a contract or tariff for third-party transportation in the case of a common carrier, along with any other information requested by the Commission;
  • the pipeline T-4 permit, if granted, shall be revocable at any time after a hearing if the Commission finds that the pipeline is not being operated in accordance with state laws and Commission rules and regulations.
  • the applicant must acknowledge the eminent domain provisions in the Texas Landowner’s Bill of Rights.

Common carrier – a common carrier offers its services to the general public under license or authority provided by a regulatory body.

Read more at rrc.state.tx.us

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Kenneth E. DuBose

Kenneth E. DuBose

Kenneth DuBose is the past President of Cheyenne Minerals Inc., an independent oil and gas operator. He began his energy industry career with ARCO Oil & Gas. Mr. DuBose then directed development of natural gas storage projects with Tejas Power Corp. He was a founding member of U.S. Minerals, (acquired by Torch Energy in 1999) a provider of internet based education for America’s mineral owners. Mr. DuBose holds a BS in Petroleum Engineering from Mississippi State University. He has served on various industry steering committees, non-profit boards, and is an active member of the Society of Petroleum Engineers, the National Association of Royalty Owners, the American Association of Professional Landmen, as well as being a Registered Investment Advisor. He writes on topics of oil and gas investing, wealth management and personal finance, having appeared in the Wall Street Journal, Kiplinger’s, Kiplinger’s Personal Finance, Houston Business Journal, Financial Advisor and various radio and TV outlets.

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