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Ask the Candidates: Should Railroad Commission Do More to Protect Property Rights?

Jefferson County Court at Law Judge Tom Rugg listens to arguments in the property rights case earlier this month.

Photo by Dave Fehling/StateImpact Texas

Jefferson County Court at Law Judge Tom Rugg listens to arguments in the property rights case.

Eminent domain. It’s been a political hot potato at the Railroad Commission of Texas for years. As regulators of the state’s oil and gas industry, commissioners give pipeline companies the right to take private property for their projects. That pits one of Texas most important industries — oil and gas — against one of Texas’ most cherished political ideals — private property rights.

Under the current system, pipelines get the power to take property from an unwilling Texas landowner simply by checking a box and submitting a form to the commission. That form amounts to a promise that the pipeline will be a “common carrier,” that it will make itself available for hire to whoever wants to use it. But the commission does nothing to verify that the pipeline will act accordingly. Once it grants “common carrier” status to the pipeline, the company can go ahead and use eminent domain to take land for its project (after paying a price determined by the courts), whether the landowner likes it or not.

In a 2012 ruling, the Supreme Court of Texas said that system was not enough.

Since that ruling (coinciding as it did with the current oil and gas boom) more and more landowners have been challenging this system and the pipeline companies that rely on it. Farmers have brought legal action against pipelines like the Keystone XL pipeline,  and the CrossTex NGL pipeline, to name just a couple. And state lawmakers have tried (and failed) to create a different process for pipelines to claim the right to take land. Pipeline companies appear eager for a solution that will free them from the threat of litigation. So what do the candidates for Railroad Commission think? In the fourth installment of our series asking the candidates where they stand on the issue, we put the question of property rights to each of them:

Do you think the commission should institute a more thorough review of companies before it grants them common carrier status? If so, what new process would you propose?

We received responses from six candidates. Malachi Boyuls, Wayne Christian and Ryan Sitton - all running in the Republican primary, did not respond.

Here’s what the candidates who did respond had to say:

Becky Berger (Republican): “We know the legal departments at these companies have the backup documentation to justify the (common carrier) status. I feel it would be wise to have it presented at the time of application and returned to the company, so that our tax dollars are not used to store the data.”

Steve Brown (Democrat): “Yes. We need to explore a variety of policy options that would set a higher standard for the application of eminent domain.”

Dale Henry (Democrat): ”Yes, the Railroad Commission should institute a more thorough review of companies before it grants them a common carrier status. The review in the past, by in large has been a rubber STAMP approval. New landowner/company financial rules should be soundly determined to include: property damage, a royalty payment (a type of return to the landowner by the company for continual long term use of the property), and finally regular quarterly maintenance of all fences, gates, crossings and surfaces used by the company through out the life of the project.”

Jason Kute (Libertarian): “I do not believe that a more stringent review process would necessarily curtail abuse. I think it more appropriate to focus on punishment of the fraud itself, and to better provide victims an appropriate legal avenue for pursuit of damages.”

Mark Miller (Libertarian): “Though it would appear that additional diligence on common carrier status by the Railroad Commission would be wise, perhaps the most important thing that could be done would be to harshly penalize companies that falsely claim common carrier status to seize property. I would hesitate to have the Railroad Commission too deeply involved in legal matters that are most appropriately handled by the court system.”

Martina Salinas (Green): ”I think the citizens of Texas would be better served by implementing stricter guidelines before a permit claiming common carrier status is awarded by the Railroad  Commission.”

This is the fourth in a series of questions for the candidates for Railroad Commissioner. Part 1 asked if the name of the commission should be changed to better reflect its mission; Part 2 asked the candidates for their positions on a variety of reforms for the commission. Part 3 asked the candidates what the Railroad Commission should do about manmade earthquakes linked to oil and gas drilling activity. You can read more about the Railroad Commission here
Participants: Becky Berger, RepublicanSteve Brown, DemocratDale Henry, DemocratJason Kute, LibertarianMark Miller, LibertarianMartina Salinas, Green PartyRepublican candidates Malachi BoyulsWayne Christian and Ryan Sitton did not respond.

Comments

  • Thure Cannon

    In general, many people seldom think about the fact that crude oil, natural gas
    and natural gas liquids are the key ingredients necessary to make the gears of
    our lives turn so effortlessly. And the transportation of these fuels which we rely on daily depend, in large part, on the Texas pipeline system – a fundamental, essential component of our modern infrastructure.

    Pipelines, like roads, are for public use – a means to move goods to market. They are a safe and reliable transportation mechanism that provides consumers with dependable, low cost sources of energy and industry with the raw material used in the production of a myriad of common household products such as plastics, fertilizers, paints and detergents.

    Furthermore, there is a common misunderstanding regarding the pipeline industry’s use of eminent domain. Pipeline companies always strive to obtain rights-of-way through fair and market driven negotiations with landowners. As a general rule, the TPA estimates, on average, a 95 percent success rate negotiating with landowners, taking into account some
    projects may condemn very little and some may condemn less that 10 percent,
    depending on the specific project and where it is located. Eminent domain is always a last resort and actually delays projects, which increases time and costs for pipeline companies and negatively impacts consumers.

    TPA members are committed to conducting business with integrity, honest communication, fair right-of-way acquisition, respectful construction and the safest of operations.

    Thure Cannon
    President, Texas Pipeline Association

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