Is Denton fracked?

At this point, one can surmise that natural gas drilling is a booming issue. This is especially true on big shale plays like the Barnett shale in North Central Texas. The challenge for municipalities, Denton among them, then, is to regulate this new gas drilling and production activity as best they can.

With this in mind, on February 7, 2012, the Denton City Council placed a 120-day moratorium on new natural gas well permitting applications so that it could revise the city’s gas drilling and production ordinance. In June, with the revisions still incomplete, the Council extended the moratorium ordinance another 120 days, setting it to expire on October 4, 2012.

But, not surprisingly, the ordinance is still in the works, so last night the Council gathered in City Hall to vote on another amendment to the moratorium ordinance. But last night’s vote wasn’t only on whether to extend the moratorium – the amendment also redefined three exemptions to the moratorium ordinance allowing applications already in progress when the moratorium was established, as well as applications filed prior to the moratorium, and applications for projects not using hydraulic fracturing, to move forward.

These exemptions are particularly contentious because they apply to four gas wells owned by EagleRidge Energy – a company known around the Denton community for poor environmental and public health and safety practices. The predominant citizens position represented at last night’s meeting was clear: strong support for extending the moratorium and strong opposition to the redefined exemptions.

But these two provisions of the amendment would either live or die together.

In a unanimous 6-0 vote, the Council passed the amendment to extend the moratorium until December 18, 2012, and redefine the exemptions.Despite being sympathetic to the views of the citizenry, the Council argued that these exemptions better reflect standing state laws of vested rights, which provide that moratoriums of this kind not affect permitting applications retroactively.

This is, I think, an important point – Texas municipalities cannot simply ban fracking, as some might believe. Texas state law prevents moratorium ordinances from having a retrospective effect. In other words, permitting applications already approved or already underway will be valid no matter what new ordinances the City Council passes. The Council’s power stops at halting new permitting applications, meaning old drilling projects are still happening, and after last night’s vote, so too will the four controversial EagleRidge wells.

So, these exemptions better accommodate state regulations, fine. Nevertheless, there’s reason to suspect that other motivating factors were at work in this decision; that is, to not pass the exemptions redefinition would have been very risky for the City Council. EagleRidge has been petitioning for “variance” from the moratorium on the four aforementioned wells for some time now, and if the Council had left the exemptions as they were, EagleRidge has likely been preparing to file a lawsuit against the City of Denton under current state vested rights law and the 5^th amendment compensations clause, claiming that the moratorium is causing undue financial harm to the company without just compensation. For this issue to go to trial at all would set a dangerous precedent – one that the Council wants to avoid. So, in order to extend the moratorium, they had to redefine the exemptions. Call it losing a battle to win the war.

In either case, it was a tough spot to be in: the vote was either against extending the moratorium or in favor of the redefined exemptions. Both are politically sticky – painfully ironic, even – putting the Council between a rock and a hard place. But is Denton fracked? Not exactly. The priority is still getting a strong gas-drilling ordinance in place, a goal that remains, I think, entirely reasonable.

Cheers!

JM