A Texas House committee hearing of two bills intended to rein in municipalities' regulation of drilling activities drew a standing-room-only crowd Monday afternoon and impassioned argument from both sides.
Oil and gas industry representatives told lawmakers on the House Energy Resources Committee that the industry needs HB 40 and HB 539 to ensure that it can continue to exploit the state's energy resources.
HB 40, authored by committee Chairman Drew Darby (R-San Angelo) and dozens of co-authors, would limit municipalities to "commercially reasonable" regulation of aboveground activities by operators (see Shale Daily, March 12). HB 539, by Rep. Phil King (R-Weatherford), would put cities on the hook for tax revenues lost due to restrictions they place on industry activity (see Shale Daily, Dec. 18, 2014).
"To be clear, the natural gas industry supports reasonable regulation at the appropriate levels of government and we are committed to community engagement in the areas where we operate. We view this as critical to continuing the shale gas revolution," said America's Natural Gas Alliance's Frank Macchiarola, an executive vice president.
Luke Metzger, director of Environment Texas, said he considers HB 40 to be "one of the greatest attacks on the environment and public health in this [legislative] session" because it "opens the door" to drilling next to homes, daycare centers, schools and hospitals.
Some of the lawmakers backing the bills and industry representatives supporting them said the legislation was merely intended to preserve the good working relationship that the industry has had with the Texas communities in which it operates.
“Cities and oil and gas have worked together to build the best state in our nation,” said Texas Oil & Gas Association President Todd Staples. “This cooperative spirit is being threatened today.”
Staples lamented that “anti-fossil fuel forces...are pushing extreme direct and indirect local measures” to stop drilling activities.
“Local control does not mean acting in the capacity of a state agency; local control does not mean enacting laws to stop state-sanctioned activity; local control does not mean [city] councils get to damage statewide property values and impair school district taxable values, and, local control does not mean denying the constitutional rights of private property owners.”
Bill Lane, director of public safety for the city of Mansfield, TX, said he opposes both bills and worries that HB 40 would "open the floodgates" to issues that have been settled in Texas law previously. Particularly, he said, he worries about how the term “commercially reasonable” would be interpreted.
Mansfield City Council members this week voted to revise the city’s drilling ordinance to include monitoring of seismic activity and air quality, in addition to other changes. However, members backed away from increasing required well setbacks. Such moves in other municipalities have incurred pushback from the oil and gas industry.
Bill opponent Bryn Meredith, a lawyer who represents more than two-dozen Texas cities, including Mansfield, said Texas courts have upheld the right of municipalities to regulate oil and gas activities.
The Texas Independent Producers & Royalty Owners Association weighed in with: “HB 40 preserves the authority of local governments, and protects the ability for a municipality to address residents’ concerns related to surface activity that is incident to oil and gas operations, including, but not limited to, commercially-reasonable noise, traffic, lighting and siting provisions.
“However, the legislation also affirms and defines the state’s role in oil and gas regulation by expressing that municipalities may not regulate aspects of oil and gas activity that are already under the exclusive jurisdiction of the state.”
Meanwhile in the Texas Senate on Tuesday, the body’s Committee on Natural Resources and Economic Development approved SB 1165, which is similar to HB 40 and was introduced by Sen. Troy Fraser (R-Horseshoe Bay).
These bills and numerous others introduced this legislative session are the response of lawmakers who are sympathetic to the oil and gas industry’s stance on a hydraulic fracturing (fracking) ban voted in by voters last November in Barnett Shale town Denton, TX (see Shale Daily, Nov. 5, 2014).
The significance of HB 40 wasn’t lost on the anti-fracking organization Denton Drilling Awareness Group (DAG). Last week DAG sent out an email blast to supporters warning in the subject line that “our fracking ban dies if HB 40 passes.” It urged supporters to show up in Austin and testify at Monday’s hearing, or at least send a letter to committee members.