TEXAS ENERGY RESOURCES COMMITTEE PROPOSES BILL TO PREVENT LOCAL GOVERNMENTS FROM BANNING FRACKING

By TONI ELLINGTON

The Texas House Committee on Energy Resources has approved a bill that would prevent local governments from imposing regulations on oil and gas operations in the future.  This action was partially in response to the ban on fracking imposed by Denton, Texas in 2014.  The bill would prohibit limits on oil and gas that are not deemed commercially responsible or are otherwise pre-empted by state or federal law.

Texas H.B. 40 was sponsored by Representative Drew Darby, R-San Angelo.  More than 100 people waited to testify at a hearing on the bill.  Cities raised concerns about potentially ambiguous terms in the bill that could discourage them from passing ordinances.  According to a Dallas Morning News report, one attorney for 25 cities in the Barnett Shale region argued that the bill “would have a chilling effect on smaller cities, and they will elect simply not to regulate oil and gas.”

The fracking ban was passed by voters on November 4, 2014, when voters in Denton, Texas, voted to enact an ordinance to amend Chapter 16, Licenses, Permits, and Business Registrations of the Code of Ordinances, to prohibit hydraulic fracturing within the city limits.  The ordinance passed with 59% of the vote.  Denton was the first city in Texas to ban fracking. Prior to putting the issue to a vote, the Denton City Council had issued a moratorium on hydraulic fracturing within the city limits.

Immediately after the Denton ordinance was passed, two lawsuits were filed to prevent the ordinance from taking effect.  The Texas Oil and Gas Association filed its lawsuit in Denton County Court, claiming the ban undermined the state’s comprehensive regulation of oil and gas development.

The second lawsuit was filed by the Texas General Land Office in the 53rd District Court, Travis County, Texas, Case No. D-1-GN-14-004628.  The plaintiff in the case, Jerry Patterson, Commissioner of the Texas General Land Office, sought a permanent injunction, claiming that the Land Office had a “sacred and solemn responsibility to the school children of Texas” to manage oil and gas leases for state-owned lands in the City of Denton for funding for public schools.

For more information and updates, stay tuned to this blog, or contact Toni Ellington at (504) 599-8500.