Will there be another HB 3105?

You may recall a prior post about this - HB 3105 - big gas interests' way to crush cities The question now is, are they going to try again? Well, you can be pretty sure legislation similar to this will be introduced again. Several cities in the North Texas region, including Corinth, had updated and improved their ordinances regulating drilling in those cities. Corinth's regulations included emissions, noise, and road usage controls. While you can never really make a gas well (or oil well for that matter) a great neighbor, the impact can be lessened.

So, the oil and gas industry lobby will try to quash these rules. Why? Because almost any regulation imposed on a business causes costs to go up. Therefore, any regulated business is going to lobby legislators to reduce or remove the regulation. While some people are aghast at this process, it is a valid process. 

We the residents whose homes and lives are affected are an interest group also. We are, after all, the voters. So while the oil and gas industry will be lobbying to curtail the power of local governments to regulate well sites and their placement in a city, WE should also be lobbying to keep our local governments empowered. Keep in mind it does not stop with your particular state representative or state senator - there are 150 representatives and 34 senators. 

The large size of the house, and to a lesser extent, the senate, is a major reason to allow city governing councils the greatest latitude in planning for and protecting their cities. Consider this: if a local group of people desire to change how government is working at home, it is far easier to communicate with your council at home, than legislators far away at the capitol. One size does NOT fit all!

It will be important during this next legislative session to watch out for another bill like this one. The Texas Municipal League watches for bills that erode City's and Town's authority. You can help too! When something like this comes up, contact your state representative or senator, and let them know what you want. You are a voter!

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.

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.

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.

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.

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...

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.

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.