This is just a re-post of an article I wrote for ClineShaleSite.com last week. If you haven't, check that site out.
Have a Great Day,
-Matt Z.
Individual states hold the lion’s share of regulatory power over oil and gas drilling activities, but an often overlooked source of regulation comes from municipalities within those states. In Texas, “home rule” municipalities (i.e. towns with more than 5000 residents) are given broad powers to propose and enact ordinances to regulate anything within their area of incorporation that has not expressly been prohibited by the legislature. With the recent surge in drilling activity, many of these municipalities are making it a priority to update their drilling ordinances to address changes in practices due to the shale revolution, as well as changes in attitudes of their constituents. While these ordinances only affect drilling within city limits, a narrow area when compared to the overall size of Texas, they are important because they reflect the attitudes of civic leaders and residents towards the oil and gas industry.
Earlier this year, Lubbock’s City Council decided to revisit its drilling ordinances, and this potentially has implications for the Cline Shale due to Lubbock’s influence on other West Texas cities. Although Lubbock sits about 80 miles north of the Cline’s perimeter, it is the largest city in West Texas and the largest within 250 miles of the formation. Additionally, the dozens of active wells within the city limits are relevant on a daily basis to its residents. Other communities in West Texas are likely watching Lubbock closely for guidance with respect to their own drilling ordinances.
I recently attended a public meeting of the committee tasked with advising Lubbock’s City Council. You can learn more about the committee’s members and their qualifications here. As expected, tensions between industry supporters and those concerned with purported health risks associated with drilling were apparent during the meeting. On the one hand, drilling contractors spoke of the positive impact their business have had on the community, and, on the other hand, concerned citizens voiced reservations about the expansion of drilling activity. Anne Epstein, a doctor, the chairperson of the Lubbock Board of Health, and a member of the committee, also made a presentation outlining the public risks identified by the Board and presented recommendations to mitigate the same. Initially, Epstein took heat from the other committee members who demonstrated skepticism about the data Epstein and the Board of Health had relied upon. The issues that drew the most discussion were well bore integrity, fresh water use, water contamination, mandatory closed loop drilling, and well set-back distances.
However, in sum, what I observed during the meeting leads me to believe that the committee members will likely make modest proposals to the City Council. In other words, I do not think it likely that Lubbock will make drastic changes to expand the scope of its drilling ordinances. Even Epstein, the committee member most opposed to drilling, acknowledged that the opportunity sitting under our feet is too immense to impose a blanket ban on drilling and fracking. I think this bodes well for Cline development. If Lubbock plays out as I predict, it indicates to the leadership of other area cities, that when they stand up to the draconian rules often proposed by energy industry skeptics, they will not be alone.
