Who should decide when, where, how, and even if, hydraulic fracturing should occur?

The locals: “You hypocrites Our good public servants in Austin want ‘local control’ when its against Washington, but deny us the same right.  We know better than you about what’s best for our community. To hell with catastrophic litigation exposure and declining tax revenues. If you didn’t get a regular royalty check and had to Live next door to a loud, stinky, dangerous industrial operation and then tell me how you’d vote”.

The Lege: “A few ignorant and misguided socialists well-meaning local leaders, abetted by left-wing, Gore-ite, out-of-town agitators, dispense lies are misinformed, deprive the state of much-needed revenues, and steal private property rights from our campaign contributors brave and visionary explorationists. What’s next, plastic bags?

Austin Doing What It Does – Legislation

Rep. Phil King has introduced two bills relating to fracking. House Bill 539 would add requirements for municipalities that propose petitions or ordinances that will affect oil and natural gas production. The Bill would require cities to make up for any lost revenue as a result of passing a municipal oil and gas ordinance affecting production. Cities would also have to provide a fiscal impact note and an equalized education funding impact statement detailing all associated lost revenue and would be required to reimburse the state for the cost of the measure for a five year period.

Not everyone is enchanted with the bill, especially the Texas Municipal League, who says the bill essentially precludes local governments from regulating oil and gas activities.

House Bill 540 would require a municipality to send any proposed petition that would enact or repeal an ordinance to the Attorney General for review. The AG would determine whether any portion of the proposed measure violates the Texas or federal Constitution, a state statute, a rule, or if it would be considered a governmental taking of private property. If a violation exists, then the petition would not be placed on the ballot.

Even Gov. Abbott has stepped into the fray, admonishing municipalities who have exerted local control over not only fracking, but tree-cutting, bag-banning and gun control.

In Denton – Amending the Drilling Ordinance

The City of Denton has published proposed amendments to their drilling ordinance.

Proposed changes include:

  • Require inspections to be performed by a third party to determine if equipment is properly functioning;
  • Grant authority to the city to map gas pipelines in Denton and its extraterritorial jurisdiction;
  • Increase disclosure requirements of the location of the pad site, existence of wells, possibility of new wells, possibility of more hydraulic fracturing and/or drilling, and possibility of re-working;
  • To minimize surface impact, an operator would be required to select the optimum surface site location within a leased acreage, then capitalize on technological advances to utilize co-location of multiple wells on a single site. Afterwards, the land would be reopened for other development; and leased acreage would be restricted from future gas well drilling;
  • Increase insurance coverage requirements for operators.

The City Council has added this recommendation to their priority legislative issues agenda, aimed at resolving the issue of “vested rights”: “support legislation that would clarify that the state’s vested rights law does not apply to subsurface mineral development as it relates to permits issued by the municipality for oil and gas development activities”.

Which Side Are You On?

An unscientific sample of Dallas Business Journal readers believe, by a 76% to 23% vote, the legislature should be able to limit a city’s ability to regulate oil and gas drilling in its local jurisdiction.

Here is today’s Musical Interlude.