Swepi Lp v. Railroad Com'n of Texas

314 S.W.3d 253, 170 Oil & Gas Rep. 446, 2010 Tex. App. LEXIS 3635, 2010 WL 1930183
CourtCourt of Appeals of Texas
DecidedMay 11, 2010
Docket03-09-00425-CV
StatusPublished
Cited by30 cases

This text of 314 S.W.3d 253 (Swepi Lp v. Railroad Com'n of Texas) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Swepi Lp v. Railroad Com'n of Texas, 314 S.W.3d 253, 170 Oil & Gas Rep. 446, 2010 Tex. App. LEXIS 3635, 2010 WL 1930183 (Tex. Ct. App. 2010).

Opinion

OPINION

JAN P. PATTERSON, Justice.

SWEPI LP appeals from the district court’s judgment affirming final orders of *256 appellee the Railroad Commission of Texas and granting the Commission’s plea to the jurisdiction on SWEPI’s declaratory claims. 1 In its final orders, the Commission approved two applications for “qualified subdivisions” pursuant to chapter 92 of the natural resources code and the Commission’s companion rule 76. See Tex. Nat. Res.Code Ann. §§ 92.001-.007 (West 2001) (“chapter 92”); 16 Tex. Admin. Code § 3.76 (2009) (Tex.R.R. Comm’n, Commission Approval of Plats for Mineral Development) (“rule 76”). Because we conclude that the district court did not err in affirming the Commission’s final orders and granting its plea to the jurisdiction, we affirm the district court’s judgment.

BACKGROUND

Chapter 92 and Rule 76

We begin by providing a brief overview of the relevant statutory scheme and common law to give context to the parties’ arguments. Under the common law, the mineral estate is dominant, and a mineral estate owner’s right to develop includes an implied right to use the surface estate in ways reasonably necessary to carry out its operations as long as the operations are consistent with the common law requirement to reasonably accommodate the current uses of the surface. See Getty Oil Co. v. Jones, 470 S.W.2d 618, 621 (Tex.1971); Texas Genco, LP v. Valence Operating Co., 187 S.W.3d 118, 121-22 (Tex.App.-Waco 2006, pet. denied) (discussion of “accommodation doctrine”); Davis v. Devon Energy Prod. Co., 136 S.W.3d 419, 423-24 (Tex.App.-Amarillo 2004, no pet.) (discussion of common law balance between the mineral and surface estates of the use of the surface and the accommodation doctrine).

In 1983, the Texas Legislature enacted chapter 92. See Tex. Nat. Res.Code Ann. §§ 92.001-007 (“Mineral Use of Subdivided Land”). Chapter 92 provides a statutorily granted exception to the common law. It provides a procedure for owners of surface estates to limit mineral estate owners’ use of the surface based upon the surface’s future development, delegating administration of the procedure to the Commission. See id. § 92.004. The commission has jurisdiction over oil and gas wells in Texas and persons owning or engaged in drilling or operating oil and gas wells in Texas. See id. § 81.051 (West 2001) (“Jurisdiction of Commission”).

Section 92.003 provides that “surface owners of a parcel of land may create a qualified subdivision on the land if a plat of the subdivision has been approved by the railroad commission and filed with the clerk of the county in which the subdivision is to be located.” See id. § 92.003. Section 92.002(3) defines a “qualified subdivision” as follows:

(3) “Qualified subdivision” means a tract of land of not more than 640 acres:
(A) that is located in a county having a population in excess of 400,000, or in a county having a population in excess of 140,000 that borders a county having a population in excess of 400,000 or located on a barrier island;
(B) that has been subdivided in a manner authorized by law by the surface owners for residential, commercial, or industrial use; and
(C) that contains an operations site for each separate 80 acres within the 640-acre tract and provisions *257 for road and pipeline easements to allow use of the operations site.

Id. § 92.002(3).

Within an approved qualified subdivision, the mineral estate owner’s use of the surface is limited to “designated operations sites for exploration, development, and production of minerals and the designated easements only as necessary to adequately use the operations sites.” Id. § 92.005. “ ‘Operations site’ means a surface area of two or more acres located in whole or in part within a qualified subdivision, designated on the subdivision plat, that an owner of a possessory mineral interest may use to explore for and produce minerals.” Id. § 92.002(1). 2 An application to create a qualified subdivision “must be accompanied by a plat of the subdivision showing the applicant’s proposed location of operations sites and road and pipeline easements.” Id. § 92.004(a).

After notice to the applicant and owners of possessory mineral interests, the Commission must hold a hearing on the application to “consider the adequacy of the number and location of operations sites and road and pipeline easements.” See id. § 92.004(b). “After considering the evidence, the commission shall approve, reject, or amend the application to ensure that the mineral resources of the subdivision are fully and effectively exploited.” Id. An applicant or owner of a possessory mineral interest may appeal the Commission’s order “as provided by law.” Id.; see also Tex. Gov’t Code Ann. § 2001.171 (West 2008) (judicial review of state agency decisions).

The Commission adopted rule 76 to implement chapter 92. See 16 Tex. Admin. Code § 3.76; see also Tex. Nat. Res.Code Ann. § 92.004(a) (commission charged with adopting rules). The subsections of rule 76 at issue substantively track the language in the corresponding sections in chapter 92. With this context, we turn to the parties’ dispute.

The Controversy

In 2004, Betty Eyhorn acquired the surface estate of 1,280 contiguous acres of dry farm land in Hidalgo County. Boston Texas Land and Trust owns the mineral estate of the 1,280 acres, and SWEPI is the owner and operator of an oil and gas lease with Boston Texas Land and Trust that encompassed this acreage. SWEPI has operational wells producing gas on portions of the acreage.

In 2006, Eyhorn recorded plats in the real property records of Hidalgo County 3 and filed two applications accompanied by the recorded plats with the Commission for “qualified subdivisions” of 640 acres each on her land. See Tex. Nat. Res.Code Ann. §§ 92.002(3), .004; 16 Tex. Admin. Code § 3.76(a)(4), (c). The plats show proposed locations for oil and gas operations sites and road and pipeline easements. See Tex. Nat. Res.Code Ann. § 92.004(a); 16 Tex. Admin. Code § 3.76(c)(4). At that time, Hidalgo County had an option to purchase the 1,280 acres from Eyhorn and planned to use the acreage for constructing and operating a landfill. The Commission notified SWEPI as an owner of possessory mineral interests, and SWEPI opposed approval of both applications. See Tex. Nat. Res.Code Ann. *258 § 92.004(b); 16 Tex. Admin. Code § 3.76(d).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Ring Energy v. Trey Res., Inc.
546 S.W.3d 199 (Court of Appeals of Texas, 2017)
State v. Erasmo Montalvo
Court of Appeals of Texas, 2015
Texas General Land Office v. Crystal Clear Water Supply Corp.
449 S.W.3d 130 (Court of Appeals of Texas, 2014)
Key Operating & Equipment, Inc. v. Will Hegar and Loree Hegar
403 S.W.3d 318 (Court of Appeals of Texas, 2013)
Untitled Texas Attorney General Opinion
Texas Attorney General Reports, 2011

Cite This Page — Counsel Stack

Bluebook (online)
314 S.W.3d 253, 170 Oil & Gas Rep. 446, 2010 Tex. App. LEXIS 3635, 2010 WL 1930183, Counsel Stack Legal Research, https://law.counselstack.com/opinion/swepi-lp-v-railroad-comn-of-texas-texapp-2010.