November 30, 2013 § Leave a comment
The Beaumont Court of Appeals recently affirmed the Denbury decision in Crosstex NGL Pipeline, LP v. Reins Road Farms-1, Ltd. Again, the common carrier status of a pipeline was placed under scrutiny. Crosstex’s pipeline at issue was to transport natural gas liquids (NGLs). The Natural Resources Code provides common carrier status for crude petroleum pipelines. The court distinguished between a substance in its natural state and NGLs, which can only be derived by processes above the wellhead. Therefore, NGLs did not fall within the meaning of crude petroleum and common carrier status under this statute was not attained. The Beaumont Court of Appeals then analyzed whether the pipeline met the public use requirement under the Texas Business Organizations Code to be a common carrier. Using the Denbury analysis, the Beaumont Court of Appeals agreed the trial court could properly find the pipeline lacked sufficient public use to qualify as a common carrier. The important point to highlight is that Denbury’s guidelines for proving common carrier status appears applicable to more than just pipelines that transport carbon dioxide.  Crosstex NGL Pipeline, L.P. v. Reins Road Farms-1, Ltd., No. 09-12-00563-CV, 2013 WL 2250747, at *5 (Tex. App.—Beaumont May 23, 2013, no pet. h.).  Id. at *1.  Id. at *3-4.  Id. at *4.  Id.  Id. at *6 (noting, like Denbury, that Crosstex’s website was inconsistent with the evidence presented on common carrier status).