Oil and natural gas producers in Texas received a legislative win on Monday as the Texas Senate approved passage of HB 40, also referred to as the "Denton Fracking Bill," with a vote of 24-7. The piece of lawmaking now awaits Gov. Greg Abbott's signature.
The legislation, which was passed by the Texas House in mid-April (see Shale Daily, April 17), would prevent the state’s municipalities from enacting ordinances that interfere with oil/natural gas drilling activities. HB 40 affirms the state’s exclusive jurisdiction over energy development in Texas, while preserving some provisions for municipalities to regulate above-ground drilling-related activities.
The legislation was approved by the Senate Natural Resources & Economic Development Committee without amendments late last month (see Shale Daily, April 30). It affirms that the state -- through the Railroad Commission of Texas -- has exclusive jurisdiction over oil and natural gas development.
In late March, the Texas House Energy Resources Committee adopted an HB 40 substitute in a 10-1 vote. The substitute came out of talks with the Texas Municipal League (TML) and the Texas Oil & Gas Association (TXOGA). To get the support of both organizations, sponsor Rep. Drew Darby (R-San Angelo) pledged to keep amendments off HB 40 unless they were agreed to by both TML and TXOGA.
The bill is a response to a ban on hydraulic fracturing that was enacted last year by Denton, which is in the Barnett Shale (see Shale Daily, Nov. 5, 2014). HB 40 would nullify Denton's ban on fracking.
Following the Texas Senate approval Monday, Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association, applauded the move. "Our greatest priority as an industry is the need for regulatory certainty in our operations," he said. "A patchwork effect of local ordinances creating inconsistent regulations, some of which are intentionally onerous in nature, is the wrong path forward, and if left unchecked, could negatively impact investment, tax revenue, employment, and lead to additional legal challenges over property rights."