Energy & Water

Briefing is underway for a controversial groundwater case before the Texas Supreme Court. A pecan farmer was denied permits to water his pecan trees by the Edwards Aquifer. The pecan farmer argues the denial of the permit was a taking of his property. For all you land use lawyers, yes, the land owner is claiming an inverse condemnation. [Bragg v. Edwards Aquifer Authority]

The Railroad Commission is in the midst of controversial rule making about which entities qualify as common carriers, because of last session’s HB 2748.

Texas needs to move its rich oil and gas resources around the state and country. Moving oil and gas to and fro requires traversing land. Land is owned by private individuals who love their private property rights, which makes getting access to build pipelines complicated. In 2013, a bill tried to address this issue. But,many private property right activists viewed HB 2748 as harming private property rights.  HB 2748 was killed on a very elegant point of order and never re-emerged again. 

The author of HB 2748 has retired from the Legislature, but the issue will be back for round 2 in 2015. Private property rights activists are engaged now more than ever before. Hold onto your hats it will be a bumpy ride.  [HB 2748 (2013)]

In 2013 the Legislature passed SJR 1 and HB 4 which created new funding mechanisms for funding the statewide water plan. Part of this new funding structure included $2 billion from the Texas Rainy Day Fund. [HB 4 (2013)]  [SJR 1(2013)]

The Texas Water Development Board has a plethora of materials on its website about the legislation and the rule making that followed. [TWDB]  There are a number of other resources as well; such as the Texas A&M Water Resources Institute that publishes the Texas Water Journal. 

In August the State Auditor Office issued a report on the Brazos River Authority. The Big Picture:       

• The Authority substantially complied with state requirements and Authority policies and procedures for financial management.
• The Authority has implemented processes to ensure that its compensation decisions and pay actions are supported and authorized.
• The Authority has implemented processes for funding and managing capital projects.
• The Authority had sufficient documentation supporting its decision to shut down and decommission its hydroelectric facility at Possum Kingdom Lake.
• The Authority should strengthen some of its information technology controls.

[SAO]

A Nebraska judge today ruled that it’s too early for the State of Nebraska to challenge the EPA’s new carbon limits for new power plants. When the judge dismissed Nebraska’s challenge, he stated:  ” The state cannot sue in federal court to challenge a rule that the EPA has not yet actually made.” 

Timing is everything, in life and in court. [The Hill]

The State Auditor selected 12 groundwater districts to review. They’re generally doing a really good job. What’s key about this SAO report is that it breaks down the statutes and rules that groundwater districts should be following. It’s a clear and concise primer on groundwater districts. [SAO Groundwater District Audit] 

P.S. California just enacted groundwater statutes for the very first time. California has a big, bad drought too which led to groundwater regulation. [Sacramento Bee] 

TPPF tells us groundwater is the answer to our future water needs. Groundwater is privately owned, minimally regulated, and abundant. Math has the golden ratio, TPPF has white papers with golden conservative nuggets.

October’s TPPF golden white papers include:     
To read Water Rights Amendments: Changing Times, Changing Uses, visit: http://txpo.li/water-rights-amendments
 
To read Groundwater Conservation Districts: Opportunities for Reform, visit: http://txpo.li/groundwater-conservation-reform

 [TPPF]  

Blue Spike is being called a patent troll. Filing 45 patent infringement claims in two weeks raises red flags. Especailly after June US Supreme Court rulings requiring greater specificty in patent infringement claims.

The texas Legislature is looking to state solutions for businesses that were targetted by trolls. Solutions include state legal claims against the trolls. 

[EFF on the US Supreme Court Rulings] [Above the Law] [TX House Committee on Techonology Interim Charge]

Trash has to be sent somewhere. But, no one wants a trash pit in their neck of the woods. Even less popular than trash is drilling waste.  

Where to dispose of drilling waste? Not in Nordheim, TX, population 315. The arguments against it are the same as they would be in Austin or Dallas. The waste facility will affect land use & will negatively impact property values.  

The Railroad Commission apears inclined to approve the permit. The commission looks at the impact on groundwater. The citizens of Nordheim want their concerns heard.  [Texas Tribune] [Learn about Nordheim]

The Delta smelt lives in California waterways. The Endangered Species Act protects it. California has a drought. The fish dies if water is re-routed. The Pacific Legal Foundation is asking the US Supreme Court to protect it.

Why are delta smelts and spotted salamanders getting so much US Supreme Court time? In 1978 the US Supreme Court decided TVA v. Hill which is what allows endangered species to trump everything. [PLF]

Vinsons and Elkins lured an energy deal maker away from Bracewell & Giuliani. The WallStreet Journal wrote  “Mr. (Michael) Telle specializes in energy deals including mergers and acquisitions, initial public offerings and tender offers.”  [WSJ]

It takes a lot of human capital to run oil fields. Those humans need to sleep somewhere. A Houston based company that provides accommodations for oil field works discovered the tax implications of booming business. The company considered converting to a REIT, but hot summer days led to a better conclusion- move to Canada. Not only does Canada offer cooler summers but is also offers a lower tax rate for this C-Corp. The 25-26% tax rate in Canada is roughly 4% lower than the US tax rate on the C-corp’s income.  [Financial Post]

NM Supreme Court ruled that parties cannot contractually eliminate interest on royalties held in a suspense account. Preventing the accural of interest on these royalty payments amounted to a violation of a clear public policy and was thus unenforceable. 

Words matter. Words matter in contracts. Words matter in bills. Words matter in statutes. 

Mexico recently de-regulated its energy market, creating a plethora of opportunities for enterprising companies. It’s a energy business’ dream to enter the nascent and booming markets south of the border. Businessman will find themselves with some new challenges such as illegal pipeline taps. The cartels are also enterprising businesses. Cartels discovered they can tap Mexico’s existing oil pipeline system and have been syphoning off what could amount to billions. Figures show that nearly 2500 illegal oil taps have been drilled in 2014 alone. [Houston Chronicle] 

New Mexico farmers have the right to pump underground water during time of drought. they got this right through an agreement and a desire to not be litigated out of business. Its a compact that has worked for more than 100 years, but an aspiring politician wants to stop these farmers from accessing water. [NM Politics.net]

Tempers have flared. A Well owner claims contamination. A drilling company claims defamation. No one is happy. 

The water well owner claims 2011 tort reform protects his free speech to claim contamination.  Lawyers wants to clarification. Courts around Texas have not been applying the 2011 SLAPP reforms uniformly. Everyone wants to know the rules fo the game. [NYT]                     

A Pipeline “ticked off” a cattleman. Said cattleman is President of the Texas & Southwestern Cattle Raisers Association.  Messing with Texans isn’t wise, messing with Texas cattlemen far less than wise.    [TSCRA] [Star Telegram]

A landowner seeking to route a pipeline around his property has contributed more than $235,000 to certain water board members. A handful of related lawsuits ensued.  [Ft. Worth Star Telegram]

Naturally, everyone should look to Texas when trying to solve problems.  Aljazeera did while forecasting how Pennsylvania will handle pipeline common carrier use of eminent domain. In the last few years, the Texas Supreme Court has been rolling back the power of eminent domain in favor of stronger private property rights. The effects of the Tea Party are pervasive, and private property rights are de rigueur.  [Aljazeera America]

Houston Business Journal names land rights, a top legal issue in energy.  

Drought is Gaelic for “Must move water to needed areas.” Tea Party is modern English for “We love private property. We detest eminent domain.” What happens when drought and Tea Party meet? Is it love at first sight? No. Its a water infrastructure quagmire. [National Eminent Domain Blog (Quoting the Ft. Worth Star Telegram)]