Skip to main content
HomeRecent News

Recent News

 

Supreme Court of Texas sides with pipeline company in Denbury Green v. Texas Rice Land Partners - January 2017

In a disappointing decision for landowners, the Supreme Court of Texas today published its decision in a case for which TLMA filed an amicus brief supporting the landowners - Denbury Green v. Texas Rice Land Partners. The Court addressed the question of whether or not Denbury Green was entitled to exercise eminent-domain authority as a common carrier when it condemned land to build a pipeline to transport its CO2 to Texas for tertiary oil recovery operations. 

This is the second time the Court has heard this case. In 2012, the Court found that Denbury did not merit common-carrier status simply by checking the common carrier box on a T-4 application from the Railroad Commission. It remanded the case back to the trial court to determine whether there was a reasonably probability that Denbury's pipeline would serve the public. The trial court granted Denbury summary judgement, but the Court of Appeals overturned the decision, focusing on Denbury's intended use for the pipeline at the time it began planning to build. Denbury appealed to the Supreme Court.

 

The Supreme Court rejected the appellate court’s notion that it should consider Denbury’s intent at the time it began planning to construct the pipeline. Instead, the Court found Denbury’s contracts to transport CO2 entered into after the pipeline was built (and in the case of the only contract that is truly independent of Denbury, entered into after the Court issued its first Denbury opinion in 2012) evidenced a “reasonable probability” that the pipeline would serve the public. It also found that the pipeline’s route in proximity to other CO2 shippers supported a probability of future public use.

 

In addition, the Court stated that the court of appeals got it wrong by requiring a common-carrier pipeline serve a substantial public interest. The Supreme Court held that “evidence establishing a reasonable probability that the pipeline will, at some point after construction, serve even one customer unaffiliated with the pipeline owner is substantial enough to satisfy public use.”

You can read the Court's opinion written by Justice Green here, and you can read the amicus curiae briefs filed by TLMA here and here.

TLMA Files Letter of Support in BMT O&G v. Clayton Williams Energy - November 2016

 
TLMA filed an amicus curiae letter in support of royalty owners in a dispute with Clayton Williams Energy and Chesapeake. BMT, et al, leased minerals to Chesapeake Exploration, and in the lease specifically stated that no operator other than the lessee, Chesapeake, could conduct operations on the leased premises. Very shortly before the lease was set to expire, Chesapeake farmed out the operations to Clayton Williams Energy, without notifying the royalty owners or getting consent from the royalty owners, to drill the first well on the lease. It was only when the royalty owners asked Chesapeake for an executed release of the lease that they were informed that Clayton Williams Energy was drilling a well on the leased land in violation of the lease terms. The trial court found in favor of BMT, et al, terminated the lease, and awarded damages to the royalty owners for Chesapeake's and Clayton Williams Energy's breach of the lease. The 8th Court of Appeals reversed the trial court, seemingly failing to find a distinction between "Lessee" and "Operator" in the lease terms.
 
The Texas Supreme Court declined to hear the royalty owners' appeal. In November, BMT, et al, filed a motion for rehearing, and TLMA filed its letter in support of the royalty owners. Citing the importance of understanding TLMA believes that the Court of Appeals’ opinion evidences a basic lack of understanding of the nature and role of the operator of an oil and gas lease, and the importance of respecting the meaning and intent of negotiated contract terms. You can find a link to all of the filings in this care here, and read TLMA's letter here.

TLMA and TSCRA File Amicus Brief in Exxon v. Lazy R Ranch - November 2016
 
TLMA, together with the Texas and Southwestern Cattle Raisers Association, filed an amicus curiae brief in a Texas Supreme Court case that may have strong repercussions for landowners and their ability to seek relief from ongoing damage by oil and gas operations. Exxon caused groundwater contamination on the Lazy R Ranch that the landowners did not discover for some time. When Exxon refused to clean up the site, the Lazy R filed for an injunction asking for Exxon to take immediate measures to prevent further groundwater contamination. Exxon claims the lawsuit is barred by the statute of limitations because the surface contamination occurred more than two years ago. However, the statute of limitations applies only when seeking legal damages; Lazy R is not seeking money but an injunction to halt an ongoing nuisance. You can read the full brief here.
 
TLMA Files Comments in Railroad Commission Proposed Rulemaking - September 2016
 
On September 26, TLMA filed formal comments on a proposed rulemaking by the Railraod Commission to amend Statewide Rule 3.15. TLMA's comments recommended against the relaxation of the regulations, which also have potential to affect the terms of certain leases. We also took the opportunity to highlight a related, existing problem - the inability to audit production reports to ensure oil or gas production attributed to a well in fact came from that well. You can read the full comments and all of the other comments filed on the rulemaking by visiting the Railroad Commission website here.
 
TLMA Testifies at Sunset Advisory Commission Hearing on the Railroad Commission - August 2016
 
On August 22, TLMA attended the public hearing of the Sunset Advisory Commission to testify on the sunset review of the Railroad Commission.The proposed changes to the rules would reduce the volume of oil or gas that must be produced from a well in order for the well to be deemed "active" under Commission rules. TLMA commented against the relaxing of the rules, but also took the opportunity to highlight the existing problem of a lack of auditing of production reports to ensure that production attributed to a particular well did indeed come from that well. You can read the complete comments here.
 
TLMA Invited to Testify at Texas Senate Committee on Agriculture, Water, and Rural Affairs - July 2016.
 
On July 25, the Senate Committeeon Agriculture, Water, and Rural Affairs held a hearing on issues related to groundwater in Texas. The TLMA was invited to testify on the application of oil and gas law to groundwater. You can watch the video of the hearing by clicking here. The hearing lasted 4 hours and 48 minutes, and included extensive testimony regarding the regulation of groundwater. To watch the final panel of witnesses, including TLMA Executive Director Laura Buchanan, skip to the 4:13:00 mark in the video.
 
The Supreme Court of Texas Issues Decision in Coyote Lake Ranch v. Lubbock - May 2016.
 
The Supreme Court of Texas handed down its decision in a much-watched case regarding groundwater in Texas. In a landmark holding, the Court held that, like the mineral estate, the groundwater estate in Texas is the dominant estate. This means simply that the owner of the groundwater has an implied right to use the surface to produce its water. As such, the Court also held that the Accommodation Doctrine applies to groundwater like it does to oil and gas. You can read the Court's full opinion here.
 
TLMA Files Comments on the Sunset Advisory Commission's review of the Railroad Commission - May 2016

TLMA filed public comments on the Sunset Advisory Commission staff's report on its review of the Railroad Commission of Texas. You can read our letter by clicking here. To see all of the public comments filed for the report, click here.