- 28 -
us that the class life of 22 years assigned to 46.0 is
inappropriate for gathering pipelines. The class life of 22
years assigned to 46.0 is a composite life, and petitioner has
made no showing that, on a composite basis, that life does not
fairly balance the relatively short life of gathering pipelines
against the relatively long lives of transmission or distribution
pipelines.16
B. Conclusion
Because Clajon is not a “producer” of natural gas, and
because it is Clajon’s use of its gathering pipelines that is
15(...continued)
See Williams & Meyers, Manual of Oil and Gas Terms 290-291 (11th
ed. 2000).
16 There is nothing in the record to indicate that the
useful life of gathering pipelines is so short that placing them
in the same asset class as transmission and distribution
pipelines would be somehow inappropriate. Respondent’s principal
expert did not disagree with the statement by petitioner’s expert
that the life of a natural gas gathering system cannot exceed the
life of the gas field or fields that it serves. Respondent’s
expert stated, however, that gas gathering areas are extended and
gathering pipelines are added to the system as new wells are
developed within the field, a process that “may continue for
* * * 50 years or more.” He also noted that “new technology or
enhanced recovery can extend the life of an oil or gas field,
which will extend the life of a gathering system.” Such
longevity is exemplified by Clajon’s Southeast Texas Pipeline
System, which has been in operation since the late 1970s. It is
also a fact that gathering pipelines transporting lean gas
directly to customer transmission lines (such as those
constituting Clajon’s five smaller gathering systems) are not
subject to the corrosive elements that tend to shorten pipeline
useful life. Moreover, the experts appeared to agree that even
pipelines carrying raw gas remain in service throughout the life
of the gas field or fields that they serve.
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