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Continuing Question of Eminent Domain and Property Rights When it Comes to Texas Pipelines

A few weeks ago we blogged about how Texas landowners basically have no choice when the huge oil and gas companies come to seize their property to install pipelines. The saga in this tale continues to be battled in Texas courthouses – and is likely to be picked up by state lawmakers when the legislative session starts.

How did it all start?

Well, it started with a one-page form created by the Texas state government. By checking a box on a T-4 form a company can suddenly claim the rights of eminent domain. Chair of the House Land and Resource Committee, State Representative Rene Oliveira (D-Brownsville) noted that basically all you have to do is become a common carrier, check a box and “you could build pipelines all across the state of Texas.”

That’s it. Well, at least that was it until the Texas Supreme Court released their landmark ruling in what is known as the Denbury Green case. Now it’s kind of up in the air.

The Supreme Court’s decision, released in August 2011, found that the Denbury Green pipeline company was not furthering public interest by building a private pipeline that would only be used by the company, and therefore the eminent domain did not stand. The ruling was a win for a rice farmer in Beaumont. (Although, perhaps really more of a loss since the case took years to make it to the state’s highest court and the pipeline was built on the farmer’s land in the meantime).

While the Denbury Green ruling is significant, it still leaves a lot of questions as to when private property rights end and when a company has a right to take the property. When it comes to T-4s, the Denbury opinion did say that pipeline companies have to prove that they are common carriers, and absent that, they cannot take the land. But in most cases, it takes these matters so long to go to court that the pipeline companies could’ve already seized the land and built the pipeline (like they did on the rice farmer’s property in Beaumont).

So what is most likely to happen? Well, that is still very much up in the air. Representatives from the oil and gas companies have stated that they “might” agree to take further action in proving they have a right to the land – but only if the extra steps needed would provide more legal certainty.

Regardless, it will be interesting (to say the least) about how this continues to play out in the courtroom and possibly in the legislature. What will it take to ensure that the rights of Texas property owners are properly being protected?

Source: The Texas Tribune, “Pipeline Case Still Hanging in Texas Courts,” 9/28/12.

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