Five Months After City Extended XTO's Gas Drilling Lease, Trinity East to Get Same Deal

2008GasDrillingBriefing.jpg
From the city council's February 2008 briefing on gas drilling within city limits
First, a programming note: Plans are to liveblog, yet again, today's 2 p.m. meeting of the council's Ad Hoc Gas Drilling Task Force Nominating Committee, if only because last week's was such a humdinger as the council struggled to add someone -- anyone -- from the Oak Cliff area affected by XTO's lease.

Speaking of: Maybe you recall, but back in January the council renegotiated terms of XTO's lease to drill near Hensley Field. The city really had no choice: As officials attempt to figure out how to deal with issuing specific use permits allowing for gas drilling within the city limits, the clock was running out on XTO's lease agreement signed in 2008. So the city extended the lease for another 30 months. Also listed among the terms of the redo: XTO has to "provide an accurate inventory of chemicals to be injected into the well bore for the purpose of drilling or hydraulic fracturing, or related well bore activities."

XTO officials negotiated that deal with the city. Now, it's Trinity East Energy LLC's turn. In August '08, Trinity East paid the city of Dallas $19 million for the right to drill on some 3,000 acres on city-owned property in Northwest Dallas, not far from Love Field Airport. But its agreement is also about to expire, which is why Trinity East and city officials have also been discussing how to extend the terms, according to folks with whom I've spoken at City Hall.

Which is why the council will vote tomorrow on extending Trinity East's lease, using almost the same language in the XTO agreement OK'd earlier this year. Which is to say: Not only will Trinity East get another 30 months, but if and when it does get its SUP there will be a provision added to both leases that says Trinity East "will provide a list of chemicals to be injected into the well bore for the purpose of drilling or hydraulic fracturing or related well bore activities and the disclosure shall include every chemical to be used along with the data sheets of the chemicals to be used."

The entire resolution follows. But expect this to become an issue tomorrow, as at least one council member, Angela Hunt, is against the 30-month extension. She explains why on the other side.

Hunt, as you may recall, was against extending XTO's deal by 30 months -- she thought maybe it oughta get 10. Trinity East, she tells Unfair Park, deserves maybe eight more months on its lease -- because, for starters, it turned in its request for permits later than XTO. And while it too is offering to return some land to the city, it's "not valuable, not accessible and near residential," she says, meaning that if and when the city redoes its permitting process following whatever the task force cooks up, that land probably wouldn't be drillable anyhow.

"There's absolutely no reason to extend their lease for such a long period of time, because extending the lease for 30 months gives them unnecessarily about 22 months that they don't deserve," she says this morning. "At the very most they deserve an extension of eight month to accommodate the fact the city is currently conducting an investigation into how we want to move forward on gas leases. They best-case delay for them is eight months. They were not in the same situation as XTO. They had a different set of circumstances, and I thought their extension was too long.

"Now, XTO filed earlier for their permit requests than Trinity East had. But regardless, don't think I am defending a 30-month extension for XTO. But this idea that we gave one party that has gas leases one deal therefore we must give another party the same deal is, I think, unreasonable. It's a mistake."

More to come.
Now, Therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DALLAS:

SECTION 1. That the City Manager is hereby authorized, upon approval as to form by the City Attorney, to execute an amendment to Lease 1 and Lease 2A, each dated as of August 15, 2008, with Trinity East Energy, LLC, as Lessee, and the City of Dallas, as Lessor.

SECTION 2. That the modifications to the leases are:

(1) Section 2 of each lease is modified by extending the primary term by 30 months, from 36 months to 66 months.

(2) Exhibit A of Lease 1 is modified by eliminating 62 tracts containing approximately 627 acres of land, which reduces the Land covered by the lease to 75 tracts for a total acreage of approximately 1,439 acres of land.

(3) Exhibit A of Lease 2A is modified by eliminating 5 tracts containing approximately 480 acres of land, which reduces the Land covered by the lease to 16 tracts for a total acreage of approximately 1,132 acres of land. (4) Subparagraph 21(p) of each lease, titled "Extension Option", is deleted.

(5) Adding a provision to each lease that the Lessee will provide a list of chemicals to be injected into the well bore for the purpose of drilling or hydraulic fracturing or related well bore activities and the disclosure shall include every chemical to be used along with the data sheets of the chemicals to be used.

(6) Add a provision to each lease that the Lessee understands that a Specific Use Permit is required before the Land can be used for oil and gas drilling and a gas well permit is required to conduct oil and gas drilling.

(7) Add a provision to each lease that the Lessee understands that the proposed drill sites are on park land and that the city council must authorize the oil and gas drilling use on park land.

(8) Add a provision to each lease that the Lessee understands that the proposed drill sites are within the flood plain and that city council must make a decision to amend the Dallas Development Code to allow the use within the flood plain or the Lessee must obtain a fill permit.

SECTION 3. That this resolution shall take effect immediately from and after its passage in accordance with the Charter of the City of Dallas, and it is accordingly so resolved.

APPROVED AS TO FORM:
THOMAS P. PERKINS, JR.
CITY ATTORNEY


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37 comments
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Web Services

Your post really helped me to understand about this. It has great details and yet it is easy to understand.That's what i was looking for. I will definitely share it with others.Thanks for sharing.

Dan
Dan

The Gas Drilling Task Force is made up of the following nine members.:

Subject Matter Experts-Margaret Keliher-David Sterling-Terrence S. Welch

Industry reps-Bruce Bullock-Brian “Patrick” Shaw-David Wayne Biegler

Citizens/environmentalists-Ramon Alvarez-Cherelle Blazer-John P. McCall Jr.

heart and soul
heart and soul

Maybe you sent the wrong girl RW.  You are a tease. "trust me" LOL I wanted some live blogging. So she can't type? This is disappointing.

Susanne
Susanne

Wow. Making these decisions in this climate of controversy. Have to wonder what kind of decisions were made while we were sleeping...between 2007 and 2010.

heart and soul
heart and soul

Where is that live blog? I thought I was going to get some live blogging.

heart and soul
heart and soul

They sure are in a hurry.  This needs to be delayed. What's the rush there Mary?

Darrd2010
Darrd2010

Mt. Creek has PCB's laying all over the bottom of it as of today. Plumes of toxicity continue to flow periodically throughout the property which is why the city can't develop it. Thats' EPA telling that, not me. Who wants it?Now, they want to put 14 gas wells on it. 850 across the bay from Dallas residents.

Darrd2010
Darrd2010

This deal that Mary Suhm has been working out with Trinity East just shows how this entire process has been handled under the table and with as little input as possible. I think that it is interesting that Suhm has this put on the agenda before Scott Griggs and Sandy Greyson get on the council next week and at the end of the council calendar for the city. Angela Hunt again is right to speak out against this covert operation. Eight months is more than generous for Trinity East. 22 months would be an example of 'whoreish behavior' on the city's part.

Robert
Robert

All the military assets at Hensley Field should have  been moved to Fort Worth when NAS Dallas closed. What a waste of tax dollars to keep Hensley open.

Ien Black
Ien Black

drilling next to love field would be incredibly stupid. everywhere else just stupid.

Susanne
Susanne

I guess this doesn't fall under Freedom of Information?  Leslie should be able to do this...it's a good way for her to get experience.  How else can she?? Does the DO have classes for new live bloggers?

Susanne
Susanne

Yes!  Let Leslie type and tell!!

Robert Wilonsky
Robert Wilonsky

My bad -- we've had a last-minute change in plans, and while we have someone there, we'll recap instead before day's end. Because, see, Leslie's new. And she's not yet ready to liveblog. Not yet. Sorry. I'm as disappointed as you are, trust me.

Susanne
Susanne

That's a very good question. She's the one making the decisions.

Susanne
Susanne

Weak Mayor. Strong City Manager system of government.  As everyone may recall, there was an effort to get that changed by Laura Miller.  When City Managers are doing all the dealing...this is what happens.

Wes Scott
Wes Scott

It does not matter whether or not any military assets are present at Hensley Field. What matters is that Hensley Field sits on Mountain Creek Lake, which was formd by damming Mountain Creek, a primary tributary to the West Fork of the Trinity River and a secondary tributary to the Trinity River mainstream.

Polluting the waters of Mountain Creek Lake with frac fluids risks contaminating the Trinity River, which is THE principle water source of over 50% of ALL people living in Texas. Drilling companies have already polluted several streams in Pennsylvania, Ohio, Wyoming, Colorado and other places, so we know, for a fact, that it can happen. We just cannot afford for it to happen.

Robert Wilonsky
Robert Wilonsky

We're gonna have to: We've had a bit of turnover of late. Guess this is where I have to acknowledge the departure of Patrick Michels, our gas-drilling expert, who decamped Friday to run a website about state politics that will no doubt take him to Austin in coming months. Trying to break in the new writers -- another one coming next week. So, yes. Bear with? Thanks. I do appreciate it.

Robert Wilonsky
Robert Wilonsky

Let me clarify: This was Leslie's call, not mine. She wanted to get her feet wet before diving in, and that's fine. I completely understand. She'll have a recap, I swear.  She has promised not to leave City Hall before filing once the nominating committee wraps.

Susanne
Susanne

So, is it on the internet via the city hall web site? Link???

Darrd2010
Darrd2010

EPA has a bigger book on Mt Creek that needs to be seen.

Cherelle Blazer
Cherelle Blazer

I'm so sorry to hear about Patrick's departure (sorry for us)....but I'm happy for him as well.

Susanne
Susanne

This is a positive for the industry.

Robert Wilonsky
Robert Wilonsky

He was good. I've worked with, oh, 23,903 writers and editors in my 20 years here (oy, indeed), and Patrick was among the finest. He will be missed. By me, most of all.

Susanne
Susanne

Hard to break in new "shale gas drilling experts."  It's a long slog.

Susanne
Susanne

Really? Well, congratulations to him!! He was good.

Susanne
Susanne

"your" ~ see Leslie, typos can be fixed.

Susanne
Susanne

Let us talk to Leslie!  Leslie....you can do it!! Don't worry. Just type you BIG observations. :-) 

Susanne
Susanne

Leslie may be "new," but I betcha she can handle this.  Leslie! 

Leah
Leah

Chromium.

Susanne
Susanne

They built a lot of homes right there next to all of this...somebody imagined what a great idea it would be long before any of us knew about the process and before they put in so much residential development.  Homes are still being built right now.

Wes Scott
Wes Scott

That same warning was given for Mountain Creek Lake when I was a kid in the 1950's. The waters of the lake do not need any additional help being polluted. They are already a disaster. Risking frac fluid contamination is purely insane.

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