After another round of meetings this week — public, private and behind closed doors — the chasm between city leaders and residents over rewrites to the gas drilling ordinance appears to have widened considerably.
The City Council appeared satisfied with the rewrites during a work session last Tuesday, giving little feedback to the staff on the fifth draft other than to ask how to best explain the final product to residents.
On Thursday, residents met in a private home to discuss what was still missing from the new rules. Vicki Oppenheim pointed out that air and water testing — provided for in earlier drafts — had been removed in the latest draft.
“I’m angry,” said Oppenheim, who was member of the task force that recommended what to include in the rewrites.
The Denton City Council will have a public hearing this Tuesday on the city’s rules for natural gas drilling and production.
The hearing will consider the fifth draft of rewrites since October. The council’s agenda includes a vote on whether to approve the new rules.
Residents have been pushing for rewrites since 2009, after a drill site went up at the Rayzor Ranch development. The city made some key changes in 2010, including increasing setbacks to 1,000 feet and setting up a gas well inspection division. However, work on the rewrites didn’t begin until early 2012, when the city appointed a task force to make recommendations. That work soon became controversial — three of the five task force members had industry ties and the first draft, ostensibly based on the group’s recommendations, contained few changes to the original ordinance.
Council member Kevin Roden called the process bungled on his blog in October, but held out hope that the city would still get a strong ordinance.
Residents said Thursday that the rules in the fifth draft remain weak, particularly in comparison to other area cities. In addition to withdrawing air and water testing and monitoring, the city has not addressed many other issues that residents have repeatedly requested be included or otherwise addressed.
Adam Briggle had outlined the issues on the blog for Denton Stakeholders Drilling Advisory Group, or DAG.
He also met with the city’s gas well inspector, Darren Groth, to hear an explanation on the stalled items Monday.
After meeting with Briggle, Groth told the City Council on Tuesday that there were two main items outstanding for DAG — the lack of regulation of compressor stations and testing of water wells.
Briggle said he disagreed with that characterization, and wrote an e-mail to the City Council on Wednesday to clarify the number and nature of the concerns.
Residents want to apply zoning rules and increase setbacks for production sites with fewer opportunities for operators to reduce those setbacks with variances or claims of vested rights. They want more protection for the air by requiring certain equipment and forbidding certain practices. They also want to protect water sources by limiting the use of open pits and requiring more testing and monitoring.
Briggle had come to City Hall last Tuesday for the 4:30 p.m. work session, but the City Council went into closed session, returning to the discussion only after holding its regular meeting.
After waiting more than 90 minutes, Briggle gave up and left, citing family obligations.
During the work session, council member Jim Engelbrecht asked whether the city attorney’s written explanation of items not included could be provide to DAG and other residents. City Attorney Anita Burgess had taken the items from the DAG blog and answered them for the council in a memo, but told the council that communication was protected under attorney-client privilege.
Instead of releasing the memo, the council asked Groth or another member of the planning staff to meet with residents, perhaps providing a written a version of what Groth told Briggle.
Groth agreed, but Briggle said he declined to invite the city to Thursday’s meeting of concerned residents.
The residents reviewed the explanations during their meeting, which showed the city had claimed legal pre-emption, regulatory takings and vested rights prevented them from writing more protective rules.
City documents have shown that Denton could spend $165,000 or more on contracts with three different law firms and one technical consultant in reviewing the rewrites.
The city has since posted the answers on the gas wells inspections page of the city website, www.cityofdenton.com.
Bryn Meredith, longtime attorney for Dish and consultant to other cities on oil and gas production ordinances, including Corinth, said there may be more to Denton’s battle than legal theories of regulatory takings, pre-emption and vested rights.
In his experience, the continuing low price of natural gas is creating new economic pressures for operators, and they, in turn, are looking for regulatory relief.
In 2005, when natural gas prices hovered around $10 per Mcf (1,000 cubic feet) at the wellhead, operators weren’t objecting to local government rules that might have otherwise seemed excessive, Meredith said.
But the market careened downward in 2009, and gas prices hit a low of $2.98 per Mcf in September 2009, according to the U.S. Energy Information Administration.
Prices have not recovered, and continue to hover around $3 to $3.50 per Mcf at the wellhead.
Most operators drilling the Barnett Shale have said gas prices need to be between $5 to $7 per Mcf in order for a well to be profitable. However, one local company, Eagleridge Operating, has said publicly that it believes the market remains viable even at $2.70 per Mcf.
“Several agents have said to me recently that they are looking at ways to cut costs on unprofitable wells,” Meredith said.
One of those ways is to resist rules from local governments, such as requirements for masonry screening walls or inspection fees, he said. Denton funds its gas well division with inspection and other fees.
Two industry groups have sued the city of Arlington for a $2,400-per-well fee it adopted in 2012, meant to offset the costs to hire and train firefighters to fight gas well fires.
Arlington said it needed the measure so that its first responders could do their job, rather than waiting six hours for a response team to come from Houston or Tulsa.
Operators said the fee is unfair because they are asked to pay more than others doing business in the city.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881. Her e-mail address is pheinkel-wolfe@dentonrc.com.
