Based on the success of its own ordinance, Fort Worth is being asked to help rewrite proposed state legislation outlining the separation of powers between the cities and the state over urban drilling.
Fort Worth officials were heaped with praise by state lawmakers during a hearing by the House Natural Resources Committee over House Bill 40, legislation the committee hoped would clear up, once and for all, the state’s dominant role in oil and gas regulations while preserving some local control over the process.
While HB 40 pleased the energy industry, the bill sponsored by state Rep. Drew Darby, chairman of the committee, was met mostly with opposition from city leaders and grassroots activists who said it went too far in stripping away reasonable ordinances carefully developed over time.
Fort Worth city councilmen Jungus Jordan and Danny Scarth and City Attorney Sarah Fullenwider testified near the end of a hearing Monday night and were asked to submit comments to make the bill better based on the city’s ordinance, written during the urban drilling revolution in the Barnett Shale.
“You guys are our heroes,” said Rep. Jim Keffer, a Republican from Eastland, said after the Fort Worth contingent testified. “It is something we take seriously. We don’t want to put the cities behind the eight ball. We want to keep you guys whole.”
Darby, a Republican from San Angelo, said Fort Worth “has done this right. They have done this consistently,” adding that “a lot of people say we should adopt [Fort Worth’s] ordinance and say that is the best practices. You are to be congratulated for that.”
Snapper Carr, an attorney who has represented Fort Worth, Denton and other cities as well as the Texas Municipal League, said that he had been pulled aside earlier by Keffer and asked to use Fort Worth’s 14-year-old ordinance as a basis for what the cities need to regulate urban drilling.
The municipal league has said HB 40 would lead to the dismantling of ordinances in at least 300 communities including Fort Worth, Arlington, Mansfield and Grand Prairie and most of the Mid-Cities.
Keffer’s staff directed questions about the need for new bill language to Darby. Cade Treadway, Darby’s legislative aide, said the representative was unavailable but aware of the effort to produce new draft legislation and that he was “absolutely open to anything that will help the bill.”
“We’re encouraged by what Chairman Darby said about the intent of the bill and our task will be to get the words in the bill to match that intent,” Carr said. “We’re close to singing Kumbaya.”
Meanwhile, the companion legislation to H.B. 40 in the Senate, SB 1165, received unanimous approval Tuesday from the Senate Natural Resources and Economic Development Committee where Sen. Troy Fraser, chairman of the committee, said he will welcome amendments.
“I’m inviting people to continue to bring me amendments or language that could be added to the bill,” said Fraser, a Republican from Horseshoe Bay. “We’re trying to keep the process moving.”
Todd Staples, president of the Texas Oil and Gas Association, applauded the bill’s passage by the Senate committee, which he said “clarifies the responsibilities of cities and the state for regulating the oil and gas industry.”
“Today’s testimony and unanimous vote confirm that Chairman Fraser has authored a fair bill that balances local control and property rights,” Staples said in a statement.
Not black and white
Darby’s bill, which was at least partially written by Austin attorney Shannon Ratliff, the lawyer for the Texas Oil and Gas Association, was criticized for preempting all local regulation of the oil and gas industry when it is implied that state law is in control.
The bill would also limit local government’s sphere of influence over urban drilling to surface activities such as noise abatement and trucking. But even then, cities could only impose ordinances that were considered to be “commercially reasonable.” Also, any attempt to ban drilling within the city limits would not be allowed.
An analysis by most of the attorneys representing the cities also concluded that the bill would be retroactive, making it difficult to enforce the ordinances they already had on the books.
Darby’s bill, and SB 1165, grew out of the hubbub caused last fall when Denton became the first city in Texas to ban hydraulic fracturing, or “fracking.” The ban is being challenged in court. Meanwhile, lower oil and gas prices have brought drilling in the Barnett Shale almost to a halt. Just four active rigs were reported in the field last week.
Darby tried to convince local officials Monday that he was “trying to strike a happy medium” to eliminate the “patchwork” of ordinances that deny the industry of regulatory certainty while not robbing cities of their ability to regulate typical nuisances.
Bill Lane, Mansfield’s public safety director, and others seized on the phrase in the bill saying that the ordinances adopted by the city must be “commercially reasonable,” telling Darby that the language was too vague and the situation “not as black and white as you think it is.”
Arlington’s Deputy City Manager James Parajon also told the committee that if the bill were to pass, a city’s ability to adopt reasonable standards for the location of a well, placement of equipment including hazardous materials and vehicle and pipeline routing would essentially be eliminated.
“This legislation does not protect [the] property rights of our citizens. Rather it ignores them and prioritizes the rights of one entity over the other,” Parajon said.
A bright line
Fort Worth’s ordinance has been on the books for 14 years. It regulates about 2,000 wells and was developed over the years by working with the industry, mineral rights owners and neighborhood leaders, Jordan said. In the years that the ordinance has been on the books, only two well sites have been rejected.
“The three of us have lived this for 14 years. We’ve got scars for working through this,” Jordan said, referring to Fullenwider and Scarth, who served on the gas drilling task force before joining the council. “Danny and I were criticized but this is the proof in the pudding.”
Carr said the new bill language will deal with urban drilling in broad categories such as setbacks, noise mitigation, hours of operation, odor issues and a catch-all category for the other surface nuisances. He hopes to have a draft to the bill’s authors and the other stakeholders by the end of the week.
Carr said something needs to be done to HB 40 because it “unequivocally guts every ordinance that is out there.”
Mansfield City Councilman Stephen Lindsey said a “bright line needs to be established between state and local ordinances. These are good ordinances and they haven’t been thought up overnight,” he said.
This report includes material from The Texas.
Max B. Baker, 817-390-7714