Email Post to a Friend: Denton Drilling: A Blog by Adam Briggle

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A Fracking Ban Will Not Sink the City

So far, the main
argument against a fracking ban – one that I have heard from nearly everyone in
city leadership – is not that it is
the wrong thing to do. Many of our elected officials agree that fracking is an
overall economic loser
for our city and is inherently
incompatible with our community. Some have even said they really would like
to ban fracking…if only we could! You see, that’s their argument: not that
we shouldn’t ban fracking, but that we can’t.

 

Here’s the argument: The
city does not have the authority to ban fracking. If we pass a ban, the
industry and the state will sue the city. The lawsuit will cost millions of
dollars, because Denton will almost certainly lose. This could entail financial
ruin and higher taxes. As Dr. Jean Schaake said at a recent Mayoral debate, “a
ban will sink the city. This is something to take to Austin and the Railroad
Commission,” she continued, “not to City Hall.” In sum: sadly (they will say),
the issue of legal jurisdiction trumps the well-grounded ethical
objection to fracking.

 

This argument is similar
to the way the moderate white clergy reacted to Dr. Martin Luther King Jr. They
said his goal was noble, but his means were untimely and misdirected. Dr.
King’s Letter
from a Birmingham Jail was a reply to those who say “I agree with you in the
goal you seek, but I cannot agree with your methods of direct action.”

 

For a long time, I was
the moderate voice against a fracking ban, and I respect those in positions of
leadership who are making the moderate argument today – indeed I support some of their
campaigns for election. Temperance, after all, is a virtue, and their
position is a serious one that deserves deep and careful reflection.

 

The problem is that
citizens may hear this argument from so many leaders and, rather than reflect
on it, automatically assume it is the truth. They may confuse authority for
wisdom. People are especially likely to make this snap judgment, because the
argument concludes in a costly legal battle, which naturally evokes fear.
People hear this and dismiss the ban as some ill-begotten idealism that will
bankrupt the city. In this way, even though no one intends this, the moderate
argument becomes entangled with a logical fallacy, namely, appeal to fear.

 

I want to brush away the
cobwebs of fear that lie atop the moderate argument and cloud our efforts to
see it clearly. To do this, I’ll make two kinds of remarks. First, I set some
things in perspective. Second, I show why the ban is actually quite reasonable
and enforceable.

 

Some Perspective

 

What, really, are we afraid
of? I will grant that should the ban pass it will likely face legal challenge.
But the mere fact of a lawsuit should not cause us to shudder. When an issue is
of vital importance, it is nearly impossible for it to not to end up in court. The courts are forges where we test the
mettle of competing claims to justice. Some cases like Brown v. Board of Education come to form part of our collective
moral backbone. We can and often do take a different attitude toward lawsuits:
not fear, but conviction and even celebration.

 

The City of Denton
regularly finds itself in lawsuits. One case in point: the city has been in litigation ever since
it passed an ordinance restricting certain aspects of the payday lending
business (a
year ago). There are strong parallels here: natural gas extraction and short-term
lending both threaten citizen well-being, both ordinances prohibit certain
aspects of the business that are most harmful (hydraulic fracturing in one case
and predatory lending practices in the other), and both ordinances are
justified by the jurisdictional authority of municipalities to protect citizen
health, safety, and welfare.

 

Recall also that if
this, or any other lawsuit, becomes too unwieldy, the city can withdraw or
negotiate. There is never an uncontrollable slide into unmanageable legal costs
– that’s just a scare tactic.

 

In short, the mere fact
of litigation cannot be the problem – this is the daily bread of city politics.


 

Some Legal Defenses of the Ban

 

No, it must be that we
are almost certain to lose the
lawsuit. That’s the real problem. But is that true?

 

This is the most
frustrating thing about the moderate argument – the supposed fact of a near
certain loss is bandied about as an article of faith. I have never seen this
premise actually accompanied with a reasoned argument grounded in statutory or
case law and addressed specifically at the legal merits of the proposed
ordinance to ban fracking (the petition). Those who espouse it usually just
wave one hand at the colossal bogey man of the oil and gas business and the
other hand at the supposed frailty of municipal authority.

 

I’ve even watched this
drift into outright lies as was the case at one Planning and Zoning Commission
meeting where a Commissioner asked a city lawyer if there had ever been a case where a city actually
defeated the oil and gas industry in a lawsuit. The lawyer’s response, after
much dithering, was basically ‘no.’ But that is just patently not true – cities
have defeated the industry in Texas and around the country dozens if not
hundreds of times (see below). The moderate argument holds that there is no
legal precedent in this case, which makes it too risky. But there is a long
track record of municipalities defeating the oil and gas industry.

 

Consider the legal
status of home rule municipalities like Denton. One part of the moderate
argument is that home rule just doesn’t give cities as much power as we would
like. But listen to this from the Texas Municipal League:

 

“…home rule cities have the inherent authority to do just about
anything that qualifies as a ‘public purpose’ and is not contrary to the constitution
or laws of the state.”

 

That is pretty sweeping
legal authority. You can find other strong claims about home rule powers in the
Texas Local Government Code, which, for example, grants home-rule municipalities
the power to regulate the location of industrial activities and to “define and
prohibit any nuisance within the limits of the municipality and within 5,000
feet outside the limits” and the power to “enforce all ordinances necessary to
prevent and summarily abate and remove a nuisance” (Sec. 211.003
and Sec. 217.042). 

 

Now consider the legal
status of the oil and gas business and how it challenges home rule authority.
There are two main issues here. First, the predominance of the mineral estate
that supposedly necessitates permitting this incompatible industrial land use
in residential areas. If a city refuses to allow access to minerals, then (the
argument goes) they will lose a regulatory takings lawsuit. Second, the fact
that state agencies like the Railroad Commission have jurisdiction over oil and
gas supposedly trumps local rules. If a city bans fracking, then (the argument
goes) they will lose a preemption lawsuit. Put these two together and you get
the conclusion of the moderate argument that this industry enjoys certain
special rights and is managed according to the state’s concern with developing
minerals rather than the city’s concern with protecting community integrity and
citizen well-being. But how serious are these legal challenges? Let’s consider
each in turn briefly.

 



Regulatory Takings

 

One good resource for this is a law article by Terry Welch, “Municipal
Regulation of Natural Gas Drilling in Texas.” Though he notes there is an
ongoing tension in the law between the industry’s interests to develop minerals
and cities’ interest in protecting public health and safety, he chronicles several
cases where cities have defeated the industry, including cases of outright
prohibition. Courts have a long record of deferring to the judgment of local
government and the citizens they represent.

 

Another great resource is a law article by Timothy Riley, “Wrangling with
Urban Wildcatters.” I’ll just give you the punch line in two parts. First,
“municipalities
have many sticks in their regulatory bundle to successfully defend a prudently
enacted oil and gas ordinance against both partial and categorical takings
claims.” Second, and here’s the kicker, “Texas common law generally favors
municipal authority to regulate oil and gas activities…. every direct challenge to a city’s police powers has been soundly
defeated” (p. 372).

 

In the 1980s, the Fort Worth Court
of Appeals ruled that “any deprivation resulting from a lawful ordinance
enforced pursuant to the legitimate policing authority of a municipality does
not constitute a loss of property without due process under the law” (p. 371). A
year later, the same court found the “City’s ordinance was not preempted by
state statute, nor was it in conflict with state law, and thus posed no due
process or equal protection violation of the Fourteenth Amendment. Moreover,
the court stated that the reasonableness of a municipal ordinance is presumed
and considered controlling by courts ‘unless the unreasonableness of the
ordinance is fairly free from doubt’” (p. 371).

 

Now, look at some of the fracking
that is going on just 250 feet away from homes in Denton, remember the dozens
of health complaints from nearby residents, and recall that that situation will
happen again and again as the city grows despite
years of attempts to regulate it at the local level. I don’t see how one
could say a ban in such a situation is clearly unreasonable.

 

To be reasonable,
local oil and gas ordinances must not arbitrarily discriminate against the
industry. The proposed ban does not do that – it treats the industry like any
other business and, just like payday lending, it prohibits certain business
operations for reasons of health and safety. I guess one could argue that
banning hydraulic fracturing is analogous to 'allowing' payday lenders to
operate...just without computers, electricity, and internet. But using
computers in a workplace is not a public health threat on anywhere near the level
that using carcinogenic chemicals is. In the payday lending case, protecting
citizens does not require turning off their lights and computers. That would be arbitrary and
discriminatory. But in the case of fracking, protecting citizens does require
prohibiting the use of the chemicals and the associated process. The measure
taken is reasonable and proportionate to the threat at hand.

 

Of course, underneath
all of this is the fundamental legal right to private property. But even
foundational rights like this, or the right to free speech, are qualified. This is a point that Eagleridge even makes on their
website (my emphasis added):
“The basic principle of this country and the Constitution is freedom and the
unalienable right to enjoy the use of personal and real property. Certainly
not at the expense or detriment to others, but the right still
remains.”

 

Say that someone owns
a pond and they have the right to catch the fish in it, because it’s their
property. But they use dynamite to get the fish. This creates loud noises that
disturb the neighbors and it also creates chemical runoff that pollutes
neighbors’ property. The legal (and ethical) response is to say that person can
get the fish, but they can’t use dynamite. His enjoyment of his private
property can’t prevent you from enjoying your property. If there is no other reasonable
alternative to dynamite, then that property remains inaccessible for the time
being. The appropriate response is to push for safer technologies, not to lower
the bar on public health and safety regulations in order to accommodate
existing technologies.

 

Hydraulic fracturing
is like fishing with dynamite. The ban is a recognition that we don’t yet have
a reasonable and technologically available way to access the minerals – really
what it is saying is that we have never had such an alternative – we
have just been trying to pretend that hydraulic fracturing fits that bill.

 

Preemption

 

The moderates contend
that only the state has the authority to regulate oil and gas drilling. But
they cannot really mean that, because it is so obviously false. On the Barnett
Shale alone, there are dozens of municipal ordinances that constitute
regulation of the industry by local governments.

 

So what they must mean
is that there are certain limits to the city’s jurisdiction over the oil and
gas industry. That’s true enough, but by itself it’s a trivial statement. The
question is whether this ban as formulated on the petition exceeds those
limits. On that question, I have yet to hear anyone in city leadership offer their
opinion.

 

Denton’s leadership holds
a very conservative view about the limits of municipal authority over the oil
and gas business. They did not adopt several of the provisions found in Flower
Mound’s ordinance out of fear of a preemption lawsuit. Yet in recent years
Flower Mound has faced five lawsuits from the industry, and they have won four
with the fifth still pending. Grand Prairie also won in a recent court
challenge.

 

More broadly on the
issue of preemption, there is a long history of courts upholding municipal
regulations on industries that are largely regulated at the state level. The
basic rationale is that the purpose of
municipal regulations is different from state regulations. It was on this basis
that the New
York appellate Court upheld the Town of Dryden’s ban on fracking. That
ordinance doesn’t really regulate the
industry; rather it just establishes permissible and prohibited land uses,
which is something that has long been held to be a proper function of local
government.

 

In Texas, there is no doctrine of implied preemption
under state law (meaning that just because the state enacts legislation does
not imply that a city is powerless to address the issue). Furthermore, for any
municipal regulation to be preempted by state law, the State Legislature must
do so “with unmistakable clarity.” There is nothing in the state rules about
fracking that specifically preempts the city from adopting the ordinance as
proposed.

 

Just because the state of Texas seeks to foster and promote mineral
development does not mean that Texas cities have to capitulate to their
interests. The city also has legitimate and legally recognized interests in
protecting community integrity and citizen health, safety, and welfare. The
proposed ban on hydraulic fracturing is a reasonable exercise of the powers of
local government.