On November 4, 2014, Denton, Texas, became the first Texas city to vote to ban fracking within city limits, as covered by Reuters, the Star-Telegram, and The Wall Street Journal. The ballot initiative, which passed with just short of 59 percent of the vote, will require the Denton City Council to sign an ordinance reflecting the election results and ban fracking within Denton city limits.
The North American Shale Blog has been tracking the history of this ballot initiative. See our posts on:
As expected, the Texas General Land Office and the Texas Oil and Gas Association, immediately filed independent lawsuits to prevent the city from enacting the ordinance. The Texas General Land Office filed its case in Travis County while the Texas Oil and Gas Association case was filed in Denton County. Both lawsuits, filed within minutes of the courts opening on November 5th, argue that the ban is unconstitutional under Texas law. They ask the courts to find that Denton's ban is preempted by the state Constitution and statutes regulating oil and gas development.
While Texas law on preemption is not as well-developed as that of other states that have tackled this issue, the Denton ordinance could force courts to clarify the role local governments can play in regulating oil and gas development. Specifically, Texas courts are being asked to decide whether:
- The state regulations are so comprehensive that a local ordinance which is inconsistent with or interferes with such regulation is preempted.
- While purporting to only limit hydraulic fracturing and not all drilling, the ban is in fact a de facto ban on drilling given the geology of the Barnett Shale.
- A local government can ban conduct, such as hydraulic fracturing, which the State permits.
Although not raised in these first two lawsuits, the specter of an unconstitutional "takings" claim by mineral right owners – similar to that filed in response to Denton's moratorium on drilling – will continue to haunt the ban until such a claim is ripe for review. It also remains to be seen whether the Texas legislature will allow this decision to remain with the courts, or whether it will attempt to pass legislation clarifying the authority of State agencies as the final arbiters of oil and gas regulation.
Those with interests in the Denton area, the Barnett Shale, or the future of fracking operations in Texas, should continue to watch the North American Shale Blog for updates related to the ordinance and the legal challenges.
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