An Irreverent Look at Pipelines
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Presentation Transcript

This presentation is made solely for educational purposes and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution. Neither Rodney M Patterson, nor any other contributor to this presentation provides legal advice about oil and gas matters or pipeline issues within the content of this presentation. This information is not intended to create and its receipt does not constitute a lawyer-client relationship. Viewers of this presentation should not act upon this information without seeking professional legal counsel.


Federal and State Regulations and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


Federal Regulations and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

  • 49 United States Code § 60101 et seq

  • Title 49 Code of Federal Regulations

  • Office of Pipeline Safety (OPS)

  • US Department of Transportation

  • Pipeline and Hazardous Materials Administration

  • (PHMA)


Federal Regulations and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

  • Interstate pipelines are regulated by Federal Law

  • regarding safety concerns which specifically includes location.

  • Under the legal theory of "regulatory preemption", regulation

  • on that issue by lower governments (state, county, city, municipal)

  • is prohibited.


Dateline: July 22, 2001 and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

“The OPS is one of the smallest agencies in the federal

government. It has an operating budget of about $23 million

and 107 full-time employees.”

“Yet it is responsible for ensuring the safe and clean

operation of more than 2 million miles of pipeline in the

United States.”


State Regulations and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

  • The Texas Railroad Commission regulates safety, but does

  • not approve location.

  • Texas law is unsettled as to what extent local governments

  • can regulate pipeline location.


State Regulations and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

  • Through certification by OPS, the State of Texas regulates,

  • inspects and enforces all intrastate gas and liquid pipeline

  • safety requirements.

  • This work is performed by the Pipeline Safety Section, Gas

  • Services Division of the Texas Railroad Commission.

  • Texas RRC has primary jurisdiction of all persons owning or

  • operating pipelines in Texas.


Types of Pipelines and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


Where are the Pipelines? and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


The Pipeline Easement and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


“Look for words of grant.” and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


“grant, sell and convey” and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


“Look for words of grant.” and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

What is Being Granted?


What is Being Granted? and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


Paragraph 15—Warranty of Title and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

Lessor hereby warrants and agrees to

defend title to Lessee hereunder . . . .


Is ‘Paid Up’ a Good Thing? and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


“Paid Up” Means No Delay Rental and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


No Surface Use? and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


Paragraph 10—Surface Use Clause and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

. . . Lessee shall have the right of ingress and egress . . . .

. . . Including . . .

  • Geophysical Operations

  • Drilling of Wells

  • Construction and use of

    • Roads

    • Canals

    • Pipelines

    • Tanks

    • Water wells

  • Construction and use of

    • Disposal Wells

    • Injection wells

    • Pits

    • Electric, Telephone Lines

    • Power Stations

    • Other Facilities


The Granting Clause and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.


Paragraph 1—The Granting Clause and contains opinions of the presenter which are provided pursuant to the First Amendment of the United States Constitution.

--What is Being Leased


. . . along with all hydrocarbon and non hydrocarbon substances

produced in association therewith . . .


The term “gas” as used herein includes helium, carbon dioxide

and other commercial gases, as well as hydrocarbon gases.



Paragraph 2—The Habendum Clause dioxide

This lease, which is a “paid up” lease requiring no rentals, shall be in

force for a primary term of Three (3) years from the date hereof, and for

as long thereafter as oil or gas or other substances covered hereby are

produced in paying quantities from the leased premises or from lands

pooled therewith or this lease is otherwise maintained in effect

pursuant to the provisions hereof.


Paragraph 2—The Habendum Clause dioxide

This lease, which is a “paid up” lease requiring no rentals, shall be in

force for a primary term of Three (3) years from the date hereof, and for

as long thereafter as oil or gas or other substances covered hereby are

produced in paying quantities from the leased premises or from lands

pooled therewith or this lease is otherwise maintained in effect

pursuant to the provisions hereof.



and dioxide

for so long thereafter as oil or gas or other

substances covered hereby are produced

in paying quantities



Paragraph 3—Royalty Clause dioxide

A percentage share of production, or the value

derived from production, paid from a producing well.

Ways to Measure Royalty:

  • Fair Market Value

Determined by looking at the market place.

  • Proceeds Realized

Determined by looking at what price Lessee sells for.


Paragraph 3—Royalty Clause dioxide

When and Where Is Royalty Measured?

  • At the wellhead

  • From sale thereof


For Oil dioxide

Paragraph 3—Royalty Clause in Sample Lease

For oil and other liquid hydrocarbons separated at Lessee’s separator facilities,

the royalty shall be Twenty Five Percent (25%) of such production, to be

delivered at Lessee’s option at the wellhead or to Lessor’s credit at the oil

Purchaser’s transportation facilities . . .


For Gas dioxide

Paragraph 3—Royalty Clause in Sample Lease

For gas . . . the royalty shall be Twenty Five Percent (25%) of the proceeds

realized by Lessee from the sale thereof, less a proportionate part of . . .

Taxes . . . and costs incurred by Lessee . . . . .

. . . provided that Lessee shall have the continuing right to purchase such

production at the prevailing wellhead market price . . . .


Bonus dioxide



Dateline: Grapevine December 17, 2007 dioxide

$3,000 (Offer by Chesapeake)


Fort Worth Business Press dioxide

Dateline: Meadowbrook, March 31, 2008

$25,000.00


Dateline: Arlington April 26, 2007 dioxide

$26,500 (Offer by XTO)



  • Practice the Art of Patience

  • Be Sure You’re Right, Then Go Ahead



  • Request for Proposal Will Be Submitted

  • Friendly Cooperation with Other Neighborhood Associations

  • Will Occur

  • Oil Company Solicitations Will Occur

  • A Proposed Lease Will Be Drawn & Submitted

  • You Will Not Be Bound Until You Agree to Be Bound


Rodney M. Patterson dioxide

Attorney at Law

4200 South Hulen, Suite 415

Fort Worth, TX 76109

817-732-8200

www.rodpatterson.com


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