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Denton, TX, Watching State Lawmakers as It Mulls Drilling Rules

In Denton, TX, the oil/gas industry and city leaders remain in limbo when it comes to drilling.

The city is awaiting action by state lawmakers on legislation that would limit its ability to regulate drilling before it finalizes revisions to its rules for drillers. Meanwhile, a moratorium on drilling permits was extended on Tuesday until the end of June to give the city and industry more time to study the proposed rules and see what happens in Austin (see Shale DailyJan. 7).

There are "...two bills before the Texas legislature, HB 40 and SB 1165, that have the potential to adversely impact the draft set of regulations as well as the city's current gas well regulations..." Darren Groth, the city's gas well administrator, told the Denton City Council. "The moratorium extension would allow additional time for city staff to sufficiently analyze what adverse impacts one or both of these bills may have on the proposed regulations."

At Tuesday's council session no one spoke on the proposed drilling ordinance revisions during a public hearing session.

Also hanging in the balance is Denton's prohibition of hydraulic fracturing, which was passed by voters last year (see Shale DailyNov. 5, 2014). The House and Senate bills would nullify the ban.

"Given the current state of debate in the Texas legislature, we felt it prudent to continue to monitor legislative proceedings on House Bill 40 and Senate Bill 1165," Mayor Chris Watts said after the vote to extend the moratorium. "These bills could impact our regulatory authority as it relates to oil and gas well operations, thereby affecting any pending revisions to Denton's gas well drilling and production ordinance. We will continue to work with the various stakeholders in the interest of preserving cities' right to regulate surface activities that impact the everyday lives of our residents."

HB 40 was to be read a second time on the House floor Tuesday but was sidetracked by a technicality. It was expected to make it back to the floor on Friday (see Shale DailyApril 14).

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