X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:In 1992, Dos Republicas applied to the Texas Railroad Commission for a permit to allow it to engage in coal mining on a 2,700-acre tract in Eagle Pass. The commission approved the permit in 1994. However, Dos Republicas did not request that the permit be issued at that time. For years, Dos Republicas attempted to enter into an agreement to sell its coal to the Comision Federal de Electricidad (CFE), a state-owned electricity provider in Mexico that operates two coal-fired plants near Eagle Pass. In 1999, CFE became concerned about the financial security of the mining company that had been its coal supplier. As a result, it alerted Dos Republicas that, in early 2000, it would be issuing a request for proposals asking companies to submit bids offering to supply CFE with coal and asked Dos Republicas to issue a bid. To ensure that it would have a supply when necessary, Dos Republicas asked the commission to issue the permit it had previously approved. The commission issued the permit in April 2000. Due to a number of political changes and pressure from various interested parties, CFE never issued its request for proposals. Employees from mines in Mexico complained that importing coal from Texas might eliminate their jobs. In addition, during this time, the governing political party in Mexico changed, and the leaders of CFE were replaced. Dos Republicas continued its efforts to enter into an agreement with CFE, and, in 2001, CFE again indicated that it would issue a request for proposals. However, as had happened previously, the company did not issue a request. Instead, CFE entered into a long-term supply contract with Coahuila Industrial Minera (Coahuila), a Mexican mining company. Prior to and after CFE entered into a contract with Coahuila, Dos Republicas unsuccessfully attempted to find other market options for selling its coal. Eventually, Dos Republicas filed an application with the commission seeking to terminate its permit. In addition, Texas Natural Resources Code �134.072(a) contains an early termination provision mandating that a mining permit will expire within three years of its issuance if the permit holder has not begun surface coal mining operations by that date. Dos Republicas filed its application to terminate its permit shortly before the three-year termination date. Just before the three-year termination deadline passed, Coahuila contacted Dos Republicas and indicated that it was interested in purchasing the Eagle Pass mining operation. Consequently, Dos Republicas filed a request to withdraw its application to terminate the permit and also filed a request to extend its permit beyond the three-year deadline. The Texas Natural Resources Code allows the commission to grant reasonable extensions if the requestor shows that an extension is necessary because of: 1. litigation that precludes the beginning of operations or threatens substantial economic loss to the permit holder; or 2. conditions beyond the control and without the fault or negligence of the permit holder. The commission referred the matter to a hearings examiner. A landowner near the Eagle Pass property opposed the extension. The hearing examiner concluded that the commission had jurisdiction to consider the request for an extension, because the request for an extension was filed prior to the three-year deadline. Further, the examiner concluded that the commission should grant the extension, because Dos Republicas’ failure to begin mining was due to the absence of a market for the coal and that the market condition was beyond the control and without the fault or negligence of Dos Republicas. The commission adopted the examiner’s proposal for decision and granted the extension. The appellees appealed the commission’s order to the district court. In its judgment, the district court concluded that the commission had jurisdiction over the extension request, because the commission has authority over a request as long as it is filed within three years of the permit’s issuance. The district court, however, concluded that the commission’s basis for granting the extension, namely the lack of a market for Dos Republicas to sell its coal, was not authorized under �134.072(a). Dos Republicas and the commission appealed the district court’s judgment. HOLDING:Reversed and remanded. The court concluded that the commission’s interpretation of the statute was reasonable and consistent with Texas Natural Resources Code �134.072(a) and further concluded that the commission had the authority to grant Dos Repulicas’s extension request even though the three-year termination date had passed. Nothing in the Natural Resources Code, the court stated, necessitates that the commission rule on an extension request before the three-year deadline passes in order for the extension to be effective. The court also concluded that the commission’s interpretation of �134.072 as allowing for a permit extension due to unfavorable market conditions “beyond the control and without the fault or negligence of the permit holder” was reasonable and consistent with the plain language of the statute. OPINION:Puryear, J.; Smith, Patterson and Puryear, J.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.