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ARTICLE · 09 NOVEMBER 2020

Lignite Lease Prevails Over Pipeline Easement

San Miguel Electric Coop is a Texas nonprofit electric cooperative that owns and operates a power plant that supplies electricity to 38 Texas counties

United StatesEnergy and Natural Resources

San Miguel Electric Coop is a Texas nonprofit electric cooperative that owns and operates a power plant that supplies electricity to 38 Texas counties. After a four-week absence, they return to these pages, this time in DCP Sand Hills Pipeline, LLC v. San Miguel Elec. Coop., Inc. Read on to learn about the "paramount importance doctrine".

San Miguel's only source of fuel is lignite it strip mines in Atascosa and McMullen counties. DCP, a common carrier, operates a 721-mile long 20-inch pipeline that contributes to a larger system that transports 20 percent of all natural gas liquids produced in the Permian and Eagle Ford basins to the Gulf Coast for processing.

In 1954, the Wheelers granted San Miguel's predecessor-in-interest a coal, lignite and mineral lease covering 2,200 acres.  San Miguel has exclusive rights from the surface to a depth of 350 feet. The Wheelers reserved the right to explore for oil and gas below 350 feet so long as it does not

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