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Anti-local fracking control bill advances in Texas

Highlights

A bill being debated in the Texas Legislature that would severely limit local municipalities' power to regulate oil and natural gas drilling moved one step closer to becoming law Monday.

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In a 125-20 vote, the Republican-dominated Texas House of Representatives approved on third reading H.B. 40. The legislation would "expressly pre-empt local ordinances that ban or limit oil and gas operations," including hydraulic fracturing.

The bill will now move to the state Senate, which, like the House, is Republican-controlled. If passed by both houses of the legislature it will move to the desk of Republican Governor Greg Abbott, who has expressed his preference for limiting local control on a wide variety of issues.

The legislation, written largely in response to a November 2014 vote by the north Texas city of Denton to prohibit fracking within its borders, has been cheered by the oil and gas industry and its allies in the legislature and condemned as a state government power grab by environmental groups and some local officials.


Debate on the bill followed the forging in committee of compromise language that addressed some of the concerns raised about the proposed legislation by the Texas Municipal League, which represents municipal governments in the state.

Following the compromise, the TML withdraw its opposition to the bill.

In an interview Monday, Jason Modglin, chief of staff for bill author Republican Representative Drew Darby, said the compromise addressed three issues concerning existing municipal ordinances to regulate some aspect of oil and gas operations that have been on the books for five years or longer.

The TML wanted to see a tighter definition of the phrase "commercially reasonable," as it applied to the existing ordinances, in the bill, he said. "They wanted it to be an objective standard that did not reflect one particular operator's position, but a standard that applied to the industry as a whole," Modglin said.

The second change to the bill was to spell out what categories of above-ground activities the cities could regulate under the bill.

"It put into place a number of categories that dealt with most of the complaints that cities said they frequently dealt with: noise, light, traffic, fire and emergency response, notice requirements and reasonable setbacks," he said.

Finally the compromise introduces "a safe harbor provision" into the legislation, which instructs a court to presume that an existing ordinance is commercially reasonable if has been in place for more than five years and has allowed for oil and gas operations to take place during that time.

A TML spokesman did not reply to a request for a comment.

The compromise did not satisfy all opponents of the proposed legislation.

"We think it's a dangerous power grab by big oil to stomp out local community rights to try to limit the worst impacts of drilling, despite the so-called compromise with the Municipal League and the Texas Oil and Gas Association," Luke Metzger, the founder and director of Environment Texas, said in an interview on Monday.

"The bill still threatens to undermine municipal ordinances in over 300 cities and will likely lead to a lot of litigation and overturning things like setback requirements that limit drilling near schools and homes in certain cities," Metzger said.

H.B. 40 also potentially could result in the overturning of "bans on wastewater injection wells in places like Dallas and Fort Worth," he said.

Metzger added that under the legislation it is unclear as to whether cities would still be able to send staff to inspect oil and gas facilities, as is currently the case in cities that already have public safety ordinances.

"Based on the debate on Friday, it sounds like no," he said.

The lack of local oversight is particularly troubling in light of a well control incident in Arlington, Texas, earlier in April, in which more than 100 people were evacuated from their homes, Metzger said.

"This is why this bill is so threatening," Metzger said.

However, advocates for the state's powerful energy industry praised the passage of the legislation.

In a statement, Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said the bill's passage would help prevent the creation of "a patchwork effect of local ordinances creating inconsistent regulations across the state."

Longanecker added that the legislation would help check the power of "anti-oil and gas organizations seeking to influence local ordinances to slow or stop the development of hydrocarbons in our state and country."

--Jim Magill, jim.magill@platts.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com