Railroad Commission not going anywhere

You might recall an earlier post I made, about the Texas Legislature on track to abolish the Railroad Commission.... Unfortunately, SB 655 never made it to the Governor's desk. The Senate had passed the bill, and it was reported to the House. They made amendments to it and passed it with the amendments which the Senate did not agree to. So a conference committee was appointed. And that is just as far as they got. The session ended before anything was conferred on.

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.

What the Railroad Commission Really needs... besides a name change

The Railroad commission of Texas, or the Texas oil and gas commission, whatever its name finally is, needs more than just a nice name. It needs the resources to get out and inspect gas and oil wells during all phases of operation. While many other state regulatory agencies get their revenue from fees and fines from the companies being regulated, a large portion of the Railroad Commission's revenue comes from the regular funds of the state. Thus, as the entire budget is being cut, the ability of the railroad commission to actually go out and do its job is affected.

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.

Consideration of a Moratorium on issuing Gas Well Permits in the City of Corinth

At the last council session (May 6, 2010), at the end I requested that discussion of an ordinance to enact a moratorium on Gas Well Permits being issued be added to the May 20, 2010 Council Session agenda. I went so far as to poll the council - if at least 2 other council members agreed it would have to be put on the agenda per City Code 30.085(B). However, I was unable to get even one other council member to throw in on it - so it was up to the mayor and/or city manager to decide if that would be on the agenda.

Apparently one (or both) did decide to place it on the agenda - which I believe is very important for us to at least discuss. After the last month of discussions on the XTO request for a gas well permit, I felt that we should review our well permitting ordinance. During that review, it would be in the city's (and the residents') best interests to not allow any new permit requests.

The moratorium would be temporary and would have an appeals process in place. During the moratorium, council and staff would be working on any revisions necessary to the Gas Well Ordinance. We obtained a tremendous amount of technical information related to Gas Wells during the recent application process. It is very possible that this new information could have an impact on what our ordinance needs to say.

This moratorium would only apply to new gas well permits - the permit that XTO requested (and was denied) would not be subject to the moratorium. You might remember that we denied without prejudice, such that they (XTO) could reapply in light of what they learned in the original permit process.

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.

Salt water pipeline variance request

Based on the information I am reviewing, I think a salt water pipeline may be a bad idea all the way around. The fallout from a pipeline break is far more horrifying to me than the possibility of a truck accident.

more information...

Temporary fencing

In an earlier post I discussed this variance request. Since then our Gas Well inspector has confirmed to me that the sound blankets are as impenetrable (or more so) than a chain link fence. So, I would be inclined to allow the operator to forgo the chain link fence where the sound blankets are.

The entire north side of the site is still open, so I really don't see how to grant this variance in its entirety. I am convinced of the necessity that the site be enclosed by a barrier that is difficult to penetrate or go around. The regulation is not for screening for scenic effect, but rather to ensure the safety of the public to keep people from inadvertently wandering in. I still need more information from the application.

more information...

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.

To Consider is NOT an option - it is required

I suppose at this point I have reached capacity on the "how can council even consider this" comments.

Briefly, council must consider any application for a permit and any application for variances that is made. MUST CONSIDER - BY LAW. We are not allowed to dismiss without consideration. In a very short moment any person can go to http://www.dictionary.com and look up the word CONSIDER and find -> to think carefully about, esp. in order to make a decision; contemplate; reflect on. And that is exactly what we are doing.

We have had 3 sessions so far: 2 with public hearings and testimony, one a workshop for the council to consider and examine the information. There will be at least one more session. And, frankly, we'll have as many sessions as the majority of the council decides is necessary to arrive at appropriate decisions.

Luckily, besides the deluge of "how can you even consider this" emails, I have received a few thoughtful, insightful emails, offering information or documents to review and consider in the decision making process. These emails have been very helpful and enlightening - I hope they will keep coming.

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...

Council to Discuss XTO Requests at Workshop April 8, 2010

Council will have a workshop session to discuss the XTO requests further. There will be no action taken. Action on the requests is currently scheduled for April 15, 2010.

There are two other items on the agenda - discussion of the bidding process for Corinth/Dobbs reconstruction, and discussion of the policies council directed the City Manager to publish concerning reuse of park property.