Shale Daily / NGI All News Access

Texas Cities Hindering Gas Development, Says Attorney

Natural gas exploration and production began in urban areas of the Barnett Shale in North Texas nearly a decade ago, and early municipal regulation of the activity was less onerous than it is today, an industry lawyer told a Texas House committee Thursday.

"Since that time, a disjointed patchwork of regulations has spread among the 230-plus municipalities in North Central Texas," said attorney Martin Garza, who has represented producers in the Barnett Shale. Garza was among those who testified at a four-hour Texas House Energy Resources Committee hearing Thursday in Fort Worth, TX.

"...[I]n recent years municipalities have chipped away at the 'dominance' of the mineral estate by imposing municipal regulations as though it was typical surface development. These regulations have become increasingly unreasonable and onerous," Garza testified. He said cities are now trying to deliberately slow gas development.

Of all the cities where Garza has been involved with oil and gas regulations, he told NGI that Fort Worth is the city about which he has the fewest complaints. "I think they've taken a more reasoned approach to things," he said. Denton, TX, is another city that saw early Barnett Shale activity and was early to the regulatory game.

Officials in Denton, who used to be more friendly to the industry, have become more focused on "addressing a very vocal minority" opposed to gas industry activity, Garza said.

That's why Garza and others in the gas industry would like to see more uniform ordinances to address Barnett Shale and other gas industry activity. "The Railroad Commission [of Texas (RRC)] should have broad exclusive jurisdiction over gas well operations and pipelines and, conversely, the authority of municipal governments with respect to such matters should be narrowly defined and limited," Garza testified.

Also at Thursday's hearing was Fort Worth Mayor Mike Moncrief, who testified that he would like to see the RRC "adopt rules that extend regulatory control to local governments for the routing of pipelines so cities can ensure that these dangerous pipelines are not near heavily populated and residential areas."

Moncrief also said he would like the RRC to establish rules requiring centralized production facilities for tank batteries, compressors and gas pipelines from the well site and salt water injection wells. "We believe this will reduce the number of these facilities and their impacts on urban development," he said.

Texas State Sen. Wendy Davis (D-Fort Worth) recently pre-filed several bills to address concerns about gas industry activity in the Barnett Shale (see Shale Daily, Nov. 18). Air quality and the placement of water pipelines are among the issues addressed by the proposed legislation, which could be taken up during the state's 82nd legislative session, which begins Jan. 11.

Moncrief also testified Thursday that he wants the RRC to consider rules that would encourage the joint use of gas well sites and pipelines to minimize the number of sites. He asked for better staffing at the RRC and Texas Commission on Environmental Quality as "there is far too much self-monitoring by the oil and gas industry."

More resources available at the RRC is something Garza said he would support. The other items sought by Moncrief would create problems, however, he said. Garza said he's reluctant to see the government get involved in "trying to tell a variety of market players out there how to do things" when it comes to well sites and infrastructure. "I think a voluntary mechanism for that works a lot better," he told NGI.

As for pipeline safety concerns, Garza said safety is best regulated at the state and federal levels. "We don't have cities telling folks how medicines are formulated...how to build a nuclear power plant..." Giving such authority to cities would create another patchwork of regulation, Garza said.

When it comes to oil and gas activity, those who draft and enforce regulations need to bend to geology in a way that's not required when regulating other activities, Garza said.

"...[G]as well sites do not have the flexibility for site selection that a typical use might have. The wells must be sited to address existing geology and technical limitations. As such, instead of zoning and land use plans dictating where wells can be located, the cities should be giving deference to the existing geology and technical limitations relating to development of the mineral estate."

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