The Texas Railroad Commission’s (RRC) new pipeline permitting rules that require oil companies to verify their common-carrier status went into effect last week, marking a significant move away from the previous rules that simply required companies to check a box to claim common-carrier status.

The RRC has maintained that its T-4 permit only allows a company to operate a pipeline and does not automatically entrust the company with the power of eminent domain. The limit of this power, the RRC says, remains with the court as it always has.

The new rules will require up-front proof of common-carrier status. Pipeline companies previously only offered proof that they carried unaffiliated third-party product if and when its common-carrier status was challenged.

This rule change comes after the landmark 2012 case in which the Texas Supreme Court ruled that a pipeline company must do more than show its T-4 permit as proof of its common-carrier status. (Texas Rice Land Partners, Ltd. v. Denbury Green-Texas, LLC, 363 S.W.3d 192 (Tex. 2012)).

If you have any questions about the new rules or anything related to eminent domain, please feel free to contact Justin Hodge (jhodge@jmehlaw.com).

Coauthored by Justin Hodge and Ayla Syed.