Recent T-4 Permit Rule Amendments and Pipeline Permitting Activity in Texas

By July 10, 2015Insights

Pipelines are an integral part of the United States economy and provide the most safe and efficient way to transport oil, gas and other refined petroleum products. More than half of all oil and petroleum products transported annually are moved through pipelines. Not only are pipelines the most efficient way of transporting oil and gas, they are the most feasible form of transporting the large amounts of petroleum that Texas and the entire United States require to keep up with the day to day demand for these products.

There are many other reasons why pipelines are such an integral part of petroleum transportation. Once installed, they are low cost and easier to maintain, and they are more environmentally friendly. By using pipelines it reduces trucks on the road, which would also need to be loaded and unloaded 24 hours a day. Pipelines also reduce the number of trains hauling and unloading crude. The reduction of these two alternatives to pipelines help to reduce air pollution.

Since the boom of the shale plays in Texas, most notably the Barnett shale and now the Eagle Ford shale, Texas has seen a growing need for more pipelines in order to keep up with the amount of production these two areas are providing. Intrastate pipelines in Texas account for 45,000 of the 58,600 miles of natural gas pipelines in the State. The two largest operators of intrastate pipelines in Texas are Enterprise Texas Pipeline Company and Energy Transfer Partners LP., which combined, provide 17,550 miles of pipeline.

Recently the Railroad Commission of Texas adopted an amendment to its pipeline permit rule, 16 TAC Sec. 3.70. These newly adopted versions to the Form T-4 will require operators to provide supporting documents showing that they will operate the line as a common carrier or gas utility, as well as amending, renewing and or canceling any existing permits. Common carrier pipelines in Texas are pipelines which are contracted to carry crude petroleum, gas or carbon dioxide for hire.

The new versions of the Form T-4 permit are as follows;

  • Form T-4, is the application for Permit to operate a Pipeline in Texas
  • Form T-4B, is for Pipeline Transfer Certification
  • Form T-4C, is no longer a valid Form as the Form T-4 has taken its place to submit renewals

The new amendments were effective as of March 1, 2015, and have a multitude of new requirements which include:

  • A valid map and a cover letter explaining what the purpose of the pipeline is for
  • Applicant must acknowledge the eminent domain provisions in the Texas landowners Bill of Rights
  • If needed, the operator is required to submit proof of any type contract etc. for third-party transportation in the case of a common carrier as well as any additional information that the RRC requests
  • If any permit is approved it can still be revoked at any time pending a hearing as to whether the operator has followed the state laws and commission rules and regulations

At this time, there are currently around 8600 permits, only half of which are active. In 2014 there were 188 permits filed in Texas. So far in 2015 there have been 65 permits filed in the first quarter – putting the estimated number of permits to be filed at around 260 for the year (assuming an average of 65 permits filed per quarter), which is around 17.5 more permits filed per quarter and a total of 70 more than were filed in 2014.

The company that has filed the most permits during the first quarter of 2015 is EP Energy E&P Company L.P., with 21 of the 65 total first quarter permits filed, all in LaSalle County.

For further reading, we suggest the following resources:

http://eaglefordshale.com/news/rrc-adopts-new-pipeline-permit-rule/

http://www.oilandgaslawyerblog.com/2014/12/new-texas-railroad-commission.html

https://www.txoga.org/industry-sectors/pipelines