GLO suit says fracking ban hurts Texas schools

By Marilyn Tennissen | Nov 12, 2014

The voters in Denton may want to stop hydraulic fracturing in their city, but the land office and the oil and gas industry do not.

On Election Day, the north Texas city approved a ban on the “fracking” process used to extract more resources from wells.  The ban passed with 59 percent of the votes.

Residents have questioned the safety of the process, resulting pollution and the noise and traffic as reasons not to allow the process near their homes.

But as soon as the courthouses opened the next morning, the Texas Oil and Gas Association and the Texas General Land Office filed suits to stop the city from enacting the ordinance.

In his suit filed in Travis County on Nov. 5, Land Commissioner Jerry Patterson said the GLO has “the sacred and solemn responsibility to the school children of Texas to manage oil and gas leases for state-owned mineral interests and state-owned lands within the City of Denton.”

The Texas Constitution of 1876 set aside half of Texas’ remaining public lands to establish a Permanent School Fund to help finance public schools. The land would be managed or sold and the proceeds are to be deposited in the PSF.  The lands primarily generate funds through oil and gas revenues.

The General Land Office has the responsibility to manage the lands, including sales, trades and leases and administration of contracts, mineral royalty rates and other transactions. According to the suit, the GLO currently has active leases within the city of Denton.

The citizens of Denton got an ordinance to ban the process, which the GLO says that will cost Permanent School Fund and other state entities millions of dollars in lost revenues.

“The Prohibition against hydraulic fracturing will completely destroy the value of the school kids’ minerals,” Patterson wrote.

In addition, according to the Texas Natural Resources Code, the Railroad Commission of Texas has jurisdiction over “all oil and gas wells in Texas” and over persons “owning or engaging in drilling or operating” oil or gas wells in the state.

“No home-rule ordinance shall contain any provision inconsistent with the general laws enacted by the Legislature of this State,” the suit states.

Patterson is seeking an injunction against the city of Denton, “to ensure that the Prohibition is not enforced” against any state-owned lands. In its petition, the Texas Oil and Gas Association also argues that the Denton ban violates state laws and is unconstitutional.

It sites the powers granted to the Texas Railroad Commission and the Texas Commission on Environmental Quality.

“Both agencies are staffed with experts in the field who apply uniform regulatory controls across Texas and thereby avoid the inconsistencies that necessarily result from short-term political interests, funding, and turnover in local government,” the petition states.

The city’s ban “second guesses” and “impedes this state regulatory framework,” according to the petition. The association claims the ban will result in the “total inability” to develop hydrocarbon interests in the city because wells in Denton produce gas from the Barnett Shale, which is estimated to contain the largest reserves of any onshore natural gas field in the United States.

According to the suit, the Barnett Shale has produced more than 4.8 trillion cubic feet of natural gas and some estimate there may be more than 40 trillion cubic feet of natural gas “remaining to be produced.”

The group claims the only way to produce such gas in commercial quantities is through the use of hydraulic fracture stimulation of “this dense shale formation that would not otherwise economically produce.”

The technology involves the pressurized injection of water, sand, and other substances into the shaleto crack open (or fracture) the rock, freeing the hydrocarbons to travel up the wellbore.

The ban “criminalizes a standard industry practice safely used in the United States since the 1940s,” the suit states.

Attorneys at Baker Botts, representing the Texas Oil and Gas Association, were unable to be reached for comment.

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