HB 3105 never made it out of calendars

I know that this is not exactly breaking news at this point, it's just that I am so happy that this happened. HB 3105 would have positively gutted our Gas Well Ordinance (stated to be one of the area's toughest by the Denton Record Chronicle).

HB 3105 - big gas interests' way to crush cities

HB 3105, Relating to the applicability of the Private Real Property Rights Preservation Act to certain governmental actions, is designed to do one thing, and one thing only - destroy local control of drilling. It is designed to take away the power and ability of cities to regulate drilling in their jurisdiction. Big Gas made its impact felt.

Texas Legislature on track to abolish the Railroad Commission....

...And replace it with a new/revised entity called the Texas Oil and Gas commission. This is Senate Bill (SB 655), "relating to the abolition of the Railroad Commission of Texas, the creation of the Texas Oil and Gas Commission, and the transfer of the powers and duties of the railroad commission to the oil and gas commission.". Basically all the powers of the Railroad Commission of Texas are transferred to this new entity, and some changes are made in the elected seats, as well as adding or refining some of its regulatory and enforcement powers.

Gas Wells - Business as usual in Austin?

Recently I read an article in the Denton Record Chronicle that described several bills filed by State Rep. Tan Parker affecting residents in communities in the Barnett Shale (and other shale plays in the future). HB 2125 sought to direct the Rail Road Commission of Texas to place a priority on inspections of gas wells (in any phase) in urbanized counties with a large number of wells. HB 2126 would have increased the maximum fine for regulatory infractions by gas well operators in urbanized counties to $20,000. The $10,000 increase would have gone directly to the fund established for setting up and operating air monitoring in these urbanized counties.

XTO Gas Well Permits were denied

As many of you already know, the gas well permit applications from XTO energy were denied at the April 29 2010 Special Session of the Corinth City Council. One thing that everyone should understand is that the permits were denied without prejudice. XTO can reapply for the permit again. During the discussion on each variance and the permits, the Council's reasons for the rejection of the permit application were discussed and made clear.

So, for the time being, there is not going to be a gas well site on the Lake Sharon Christian Center. For now the gas well ordinance in Corinth stands... and it should for the rest of this year, and probably then next (2011). However, be aware that the state legislature is now getting pressure from the oil and gas industry. You can expect the states to preempt cities' authority to establish setbacks, air quality measures, road use, and anything else that gets in the way of the oil and gas companies. At the state level, tank setbacks something around 50 feet, and well set backs somewhere around 100-200 feet. So if we get preempted, our 600 foot setback will be gone.

I strongly suggest that all of you that were so vocal with the city now turn your attention to your state legislators. This is nowhere near done.

Tank Setbacks

There are two variance requests concerning tank setbacks. The first variance requested is for the rule of 114.12(A)(24)(j) which states that tanks must be located a minimum of 600 feet from any protected use. Another variance for 114.12(A)(32)(c) which sets the minimum distance of waste disposal tanks from any protected use to 600 feet also.

Reviewing the site plan, I believe there are locations on the site that would put the tanks in question (both types) at least 600' from any residences that have not already agreed to have the well or well support equipment at less than 600'.

The operator states that there is no alternative to the variance. I disagree, and will need the operator to prove that statement before I could agree to grant this variance.

The operator also states that 150' is an "industry standard" for setbacks from hydrocarbon tanks. While that may be true, that is a flammability/explosion safety issue, and does nothing to address adjacent property owner's rights, particularly to maintain the value of their property.

The operator does not address the hydrocarbon emission issue at all, and as recent TCEQ investigation of complaints around North Texas have shown, there are real issues with emissions of volatile compounds dangerous to human health.

XTO Energy Compressor Requirements Variance Request

XTO Energy is requesting variances to most of the essential requirements of the Lift compressor regulations of 114.15 Corinth City Code. Since XTO has said during the public hearing that they probably won't need the compressor, it may be best to wait on this variance until they decide they do need it.

Some of the most important aspects of quality of life in any city, and certainly here in Corinth, are the sound level at night, and the visual aspects of the streets and building architecture. The variance seems to request a blanket exception that could change sound levels at residences a considerable amount - something that is really not in the public interest, or in the interest of adjacent property owners.

More Information

XTO Energy Letter Of Credit Variance Request

There was some new information about the letter of Credit variance request (new to me anyway) at the last session (April 15, 2010) during the public hearing on the Permit requests. XTO Energy does not sound included to use a Cash Escrow system in lieu of the letter of credit. The Bond does not give the city the same advantages as the Letter of Credit.

Something that many people may be concerned about is that the $25,000 per well required is "not enough" to repair the streets. XTO Energy is liable (per the agreement) for all damages - the letter of credit is to insure that if invoices are not paid, there is recourse for the City.

I have some additional information about the letter of credit variance request.

I have an earlier blog entry also.

My thoughts on the City's legal powers to regulate

I have been researching the Texas constitution, Texas Administrative Code, the Local Code, and such case law as I have been able to find, as well as some legal research works in law journals. The short story is that Home Rule Cities have far ranging authority to regulate. Yet they are subject to private property rules that can create takings claims.

I have put together my thoughts on this subject (at least the first part, our authorities) at my gas wells issue page.

XTO amending their W1 with the Railroad Commission

XTO is choosing to amend their W1 permit application with the Texas Railroad Commission for the A unit of the Lake Sharon well site. This appears to be amending their original application for a permit, not a new permit. The amended application adds acreage south from the original permit. It also appears to move the north lease line 70 feet north from the original application. The actual well location appears to remain unchanged.

There are quite a few parcels of land that XTO does not have leases on in this new extended A unit definition. XTO is requesting a spacing variance to Railroad Commission statewide rule 37 for the revised unit as a result of the unleased parcels. One or more owners of properties in this revised A Unit have or are protesting the variance request. I understand that hearing is May 7, 2010.

Useful information

To follow up on a previous post, some people are sending in useful pieces of information. Even if I already have the information, it is good to be getting useful input from people. Recently someone sent me a link to an article at the Vermont Law review that was very on topic for our Gas Well deliberations.

That is an excellent example of useful information. While I was reviewing that article with our Attorney days ago, that is no matter - you can't really know if I have seen your particular bit of information.

So, please, keep sending in the references to drilling related sites and documents - I very much appreciate them.

And the Texas Supreme Court Says...

The supreme court of Texas recently (well, in the last few months) made a ruling in CITY OF HOUSTON, TEXAS v. TRAIL ENTERPRISES, INC. D/B/A WILSON OIL COMPANY, ET AL. Of course the background of the case is important - you can read the opinion here. Basically Trail sued the City of Houston over a denial to drill a well claiming that the city had in effect made a regulatory taking. So there was a trial and the City of Houston lost and had a judgment of over 16 million dollars entered against them. But, the trial court (Harris county I think) agreed with the city that the complaint was not ripe and dismissed the case for lack of jurisdiction.

Sounds great, except of course Trail appealed. The appellate court disagreed with the dismissal and ordered the judgment rendered. So the City appealed to the Texas Supreme Court and the court agreed with the Waco Appeals court that the dismissal was wrong. They also found that the appeals court erred in ordering rendition instead of remanding the case back to the trial court for further proceedings.

Essentially, this opinion just allows Houston to pursue additional procedural pleadings that had been denied by the rendition. So, it is still up in the air as to whether Houston's ordinance on drilling constituted a taking. The trial court thought so, to the tune of over 16 million dollars.

So, I am currently attempting to get (through our attorney) the facts of the trial in Harris county to use to review our ordinance. As to the judgment, we just have to wait and see what happens with Houston's other pleadings if any.

In simple terms, we are not out of the woods with respect to how we enforce our gas well ordinance, or if it is enforceable at all. While the courts have so far said we can in fact carry out regulation of wells in the city limits, they have not decided yet if it is a constitutional taking. This case at the trial court level says it is a taking. It is not finished yet.

Information Gathering to Continue on Drill Permit Request

At the Corinth City Council Session on April 15, 2010, the Council voted to continue the public hearing and postpone consideration of the variances and permits requests until April 29th. A special Corinth City Council Session will be called for the 29th. This will provide us on the council with 2 more weeks of fact gathering opportunities.

I have discussed my thoughts on some of the variances - now I am going to finish up those thoughts on the remaining variances, and revisit the first ones over again. I will discuss them here briefly and in more detail on my website

XTO request for a variance to the Storage Tank Setbacks

XTO has requested a variance to Corinth City Code section 114.12(A)(24)(j) which defines the setback distance for a tank from any protected use as 600'. The tanks are not collocated with the well bores, so an entirely different set of residences are within the 600' radius of the tanks. Many of those residences have not signed any agreements with XTO to allow drilling or tanks or other equipment inside of the stipulated distances set down in the Corinth Code.

The lack of agreements may be moot since there is no special provision for tank setback distance reduction such as there is for the well bores (114.13(B)). It would appear the decision is left to council discretion.

Because of the reduced distances, the issues raised by residents, and the recent tank fires in the area, I would want to see additional safety measures in place in order to be willing to grant this variance.

More Information...

Update on the XTO Gas Well Permit

Our council postponed action on the variances and the permits. I made the motion, and it was approved unanimously. I moved to postpone because I needed more time to evaluate all the information. I was in contact with the TCEQ that afternoon before the council session and in discussing the situation, was offered that they could provide technical resources to attend our meeting and discuss the air quality issues.

With that and the many good questions asked by the residents in the public hearing, I was convinced we needed more time to evaluate the situation. The mayor made it easy when he suggested that we postpone.

What I found out about Benzene

I spent some time over the last few nights reading information from the Center For Disease Control (CDC), OSHA, and NIOSH on Benzene. I was reading this because benzene has been associated with natural gas production in the Barnett Shale, and XTO energy is requesting a permit here in Corinth, Texas to drill a natural gas well. As it turns out, benzene is associated with both oil and gas production (not surprising), and as a result of our industrialized society, is floating around in the air we breathe.

According to the CDC people who smoke get a far larger dose of benzene than people who don't. Benzene in the cigarettes - another good reason not to smoke if you needed a new one. We have benzene around us in the house. What I gleaned from the CDC information is that benzene is occurring at something around 1.7 ppb (parts per billion) in our out door air - not associated with any particularly polluted location. If you are walking along behind your lawn mower, you are probably getting more benzene because that is a by product of internal combustion engines.

So - the first question becomes how much is too much? According to the CDC and OSHA 500 ppm (parts per million - contrasted to billion above) is life threatening. Immediately life threatening. 50 PPM is considered the highest level that a person can withstand for about 30 minutes or so to escape to clean air. OSHA sets the limit for occupational exposure (10 hours a day, 40 hours a week) at 1 ppm.

Now - the second question - how much benzene do gas wells emit? The Texas Commission on Environmental Quality (TCEQ) is asking that question, and is actively setting up monitoring. The TCEQ has identified some wells where significant amounts of benzene (along with a long list of other petrochemicals) were found down wind in the air.

So, there is the potential for benzene to be emitted by a gas well (or an oil well for that matter). Because there is that potential, it seems reasonable to me that the city should take steps at least to monitor any wells we have in the city limits. Part of our permit process might need to include provisions for not only sound monitoring and insurance, but air quality monitoring also.

In fairness that is a big job. How do we do it? How much does it cost? Who should pay for it? I am interested in finding a way to tighten our drilling ordinances to include air quality monitoring and have to get the answers to those questions and more to try and introduce that change.

First of the requested Variances to the Drilling Ordinance

XTO energy is asking for a variance to our ordinance on drilling. In short they want to substitute a Bond or Check for the required letter of credit. In any case the value would be $25,000, and is only for securing repairs to the roads they use in the drilling operation.

Unless I find that the mechanics of using a Bond or Check is significantly different from our perspective of accessing the money to perform repairs, I can't find any reason to oppose granting the variance. I have some additional information at my website.

More on the Lake Sharon Drilling Permit Request

I've been reviewing our Gas Well Drilling Ordinance at Chapter 114 Corinth City Code. Section 114.07(B)(10) provides the latitude for the Council to add to or modify the technical regulations as the Council deems in the public interest. Whether or not the Texas Railroad Commission, or the state courts, will view the exercise of that latitude favorably remains to be seen.

Already I have received numerous requests to vote to deny the permit to drill from residents (and some non residents). Most of the requests are focusing on the emissions component of the gas recovery operation. Others are on the safety factor of having heavy construction equipment traveling the roads near our schools and paths our children take to school.

Suffice to say it is a very complicated issue. Both the energy company and the residents have rights. Ultimately, I believe that we should issue the permit if all reasonable safety precautions that we are aware of today are taken.

I have additional information at my council session web page, and also at a page dedicated to discussing the drilling permit application.

April 1st Council Session to be very busy

The April 1st Corinth City Council regular session will be a very busy one: there are 17 items on the agenda at this point, including 4 public hearings. At this time (the packet and agendas are not out) I believe that 3 of the hearings are related to action on the Dobbs Road Realignment. One hearing will be for the request for a drilling permit (with variances) for XTO energy for the the site southwest of the Oakmont/Lake Sharon intersection. Other business will include council review and action on the 2008-09 (last fiscal year) Audit, or Certified Annual Financial Review.

My understanding is that XTO is requesting 10 variances to our ordinances for their drilling permit. Some of the areas are in Tree Loss Mitigation, Salt water disposal, maintenance setbacks, well head to protected use distances, and letter of Credit requirements. All in all I expect a rather lengthy evening.

You can see more information at my Web site