December 12, 2013

Dallas tightens gas drilling rules inside city limits

The Dallas City Council approved a 1,500-foot setback from “protected uses” such as homes and churches for drilling rigs and compressors. Fort Worth and Arlington require 600-foot setbacks.

Dallas has significantly tightened its drilling rules, following years of debate about what natural gas production should look like inside its city limits, if it comes at all.

In a 9-6 vote on Wednesday, the City Council overhauled a natural gas drilling ordinance that, among other provisions, now requires a minimum 1,500-foot setback between “protected use” areas like homes, businesses and churches and new rigs and compressor stations. The setback is five times the previous buffer and matches a requirement in the suburb of Flower Mound as the strictest in North Texas.

Fort Worth and Arlington each require a 600-foot setback from new wells, although operators may seek exceptions.

The Barnett Shale natural gas field extends under all or part of more than 20 North Texas counties. It is generally thought to extend only to Dallas’ western outskirts.

Industry backers called Dallas’ new rules unworkable, saying the change will effectively bar any drilling within the city limits, depriving Dallas and its mineral holders of revenue gained in other cities that have embraced the industry.

States and the federal government regulate most aspects of drilling, including well integrity, pipeline safety, and the effects on air and water. Cities can regulate noise and control the location of wells or related sites like compressor stations. Unincorporated communities in Texas lack that power.

Though citizen activists in Dallas had pushed for even stricter regulations, some claimed the vote as a victory.

“It's established a clear alternative to the model that the [oil and gas] industry has touted over the past decades,” said Jim Schermbeck, director of Downwinders at Risk, a local group that advocates for clean air. Schermbeck said Dallas’ new rules were more carefully drawn and more “science-based” than those elsewhere.

Council member Lee Kleinman, who voted against the ordinance after introducing a failed amendment to reduce the setback requirement, called the legislation “unreasonable and extremist.”

“We might as well save a lot of paper and write a one-line ordinance, saying that there will be no gas drilling in the city of Dallas,” he said at a hearing ahead of the council's vote.

Some companies that spent millions of dollars planning to drill under Dallas’ old rules have said they feel cheated by the city’s shift on drilling. That includes Trinity East, which paid Dallas $19 million in 2008 to lease 3,500 acres of land and spent millions more on planning.

It was the only company to stick around as the city spent more than two years debating the overhaul. In August, however, the City Council rejected the company’s zoning permits, leaving its plans in limbo.

“We’re sort of baffled,” Steve Fort, the company’s president, told the Tribune in October. “We feel like we paid for something here that we’re not receiving.”

At that time, Fort said the company was weighing its options, including litigation, and “all of them are on the table.” Reached minutes after the Dallas vote, he said that was still the case.

Whether the rules would keep out all drilling is an open question, as is how much money the city could reap from the Barnett Shale. Low natural gas prices have slowed drilling from more than 200 rigs at the 2008 peak to about 35 recently.

Staff writer Jim Fuquay contributed to this report.

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