Texas pipeline law needs reform | Opinion
If two common carrier pipelines reach any shared points, Texas law explicitly requires them to interconnect, Joe Barton writes, but some producers say anti-competitive behavior is preventing this.Texas should reform its pipeline policy to ensure fair competition, lower fuel prices, and a thriving energy sector.
Under Texas law, energy midstream companies are empowered with eminent domain to more efficiently construct pipelines to transport oil and natural gas from where it’s developed to where it’s refined, exported or otherwise needed. However, in exchange for that power, “common carriers” are required to allow other — often competing — companies’ pipelines to interconnect with their infrastructure. This ensures that fewer pipelines are ultimately needed.
If two common carrier pipelines reach any shared points, the law explicitly requires them to interconnect. Where there is no connection at such a point, the Texas Railroad Commission may compel a company to allow an interconnection.
Until something is done, some companies will be faced taking the massive financial risk of building a project that may ultimately sit idle while they wrestle with monopolistic incumbents or pursue antitrust litigation.Recently, Converge Midstream, which owns and operates an underground salt dome cavern storage facility, filed such a suit against Magellan Midstream, owner of the Houston Crude Oil Distribution System .
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