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Because of the primary use of gathering systems in
the process of producing natural gas, as well as the
plain language of the asset class descriptions, Duke’s
gathering systems fit more logically within Asset Class
13.2 than Asset Class 46.0. [Fn. ref. omitted.]
Id. at 1262.6
V. Nonapplication of Golsen v. Commissioner
Under the rule of Golsen v. Commissioner, 54 T.C. 742, 757
(1970), affd. 445 F.2d 985 (10th Cir. 1971), this Court will
6 The Court of Appeals for the Tenth Circuit distinguishes
between “gathering pipelines”, which “fall within Asset Class
13.2", and “trunk lines and related storage facilities”, which
“fall within Asset Class 46.0", stating that “it is undisputed
that trunk lines and gathering systems are mutually exclusive
terms referring to different types of pipeline systems.” Duke
Energy Natural Gas Corp. v. Commissioner, 172 F.3d 1255, 1259
(10th Cir. 1999), revg. 109 T.C. 416 (1997). Petitioner argues
that Clajon’s trunk lines are part of its gathering system and,
like the rest of the system, must be included within 13.2.
Petitioner urges that we distinguish the Court of Appeals’
classification of trunk lines on the basis that that court must
have considered Duke Energy’s trunk lines to be transmission
rather than gathering pipelines. Because we conclude that all of
the pipelines in the Texas gathering systems fall within 46.0, we
need not address the Court of Appeals’ refusal to treat trunk
lines as part of the gathering system for asset classification
purposes.
In concluding that petitioner’s trunk lines are includable
within 46.0, we obviously reject petitioner’s suggestion that the
specific inclusion, within 46.0, of “trunk lines * * * of
integrated * * * natural gas producers” necessarily implies the
exclusion of its trunk lines from that asset class (since it is
not an integrated natural gas producer). We view the quoted
language as simply intended to clarify that an integrated
producer’s trunk lines are not to be considered gathering
pipelines includable within 13.2. That language has no bearing
upon the inclusion, within 46.0, of trunk lines owned and used by
a pipeline company like petitioner.
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