Mineral rights owners push for open access to pipelines - MSNewsNow.com - Jackson, MS

Mineral rights owners push for open access to pipelines

JACKSON, MS (Mississippi News Now) -

Some land owners think they're being cheated out of their share by a Texas energy company.

Carbon dioxide is used for enhanced oil recovery. Those pipelines run throughout Mississippi. They were built using eminent domain. So land owners say there should be more "public use" involved.

They want a law that would give open access to the pipelines.

"The two pipelines that would best serve Mississippi are both under 50 percent being used, meaning 50 percent empty," said Bruce Monroe. "But they're 100 percent controlled by one entity."

Bruce Monroe spoke on behalf of a group of mineral rights owners at a press conference Monday. His family business, Denkmann Interests, has been in a dispute over market price with Denbury Resources.

"If we were somewhere else that was a non-monopolistic situation, royalty owners are getting 2 to 2.5 percent the price of oil for their CO2," explained Monroe. "Mineral owners in Mississippi across the board in Mississippi are getting less than one percent the price."

A Senate bill that will be up for a vote later this week would create open access to the pipelines by enabling other companies to use the line and potentially offer higher royalties. The original legislation in 1984 did not require that they be common carriers.

That's why President of the Mississippi Energy Institute Patrick Sullivan is worried about the new proposal.

"That's bad public policy to go ask the legislature to pass very broad legislation to settle a narrow private dispute," said Sullivan.

He thinks the legislation could set the state back.

"The law retroactively impacts measures that the legislature has put in place over the last two decades that have helped build us an industry here in carbon dioxide based oil production and this is still an emerging business," Sullivan said.

Denbury sent a fact check sheet. It says most of the land owners' claims are false, exaggerated or misleading.

The proposed law would give rule-making and regulation power on this issue to the Public Service Commission.

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