As Gas Drilling Task Force Begins to Wind Down Deliberations, Who's Fracking Whom?

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Via.
Dallas Cothrum
As he does every week, Dallas Cothrum of MasterPlan Consulting sat in the front row of the city's gas drilling task force meeting yesterday, attentively tuning in, occasionally sighing and taking notes in order to deliver his energy company clients the latest news from the home front. Yesterday was slightly different than the usual look-see; he hoped the task force would address the letter he and former city council member Mark Housewright sent earlier this week.

The letter tells the task force that their set-back recommendation -- 1,000 feet from a well pad to a protected use -- is a "deal-killer" for his clients, and that if that recommendation is put in place (which requires council approval), gas companies would likely pull out of Dallas. Cothrum said a reasonable recommendation would have been a set-back of 700 to 900 feet from a well to a protected use. Task force member David Biegler had previously suggested the upper end of Cothrum's range.

And at yesterday's meeting, the task force members didn't even acknowledge they had received MasterPlan's letter.

The focus was instead on defining protected uses and outlining landscaping requirements and site mitigation. The conversation was thorough, if at times circular, with several items -- such as the definition of "habitable structure" as a possible definition of protected use -- being hashed out and then tabled until next week.

Task force member Terry Welch, a lawyer who defends North Texas municipalities and voted in support of the 1,000-foot set-backs, told Unfair Park later that he disagreed with MasterPlan's letter. "I think [the set-backs are] very reasonable. ... Flower Mound had 1,000-foot set-backs, and there was drilling that was going on. By definition, that's not prohibitive."

He said he and Cothrum are friends and that "we just have to agree to disagree."

"I hope they go back and reconsider the set-backs," Cothrum tells Unfair Park. "That alone will not allow for gas drilling." It rules out the proposed drilling sites at North Lake and Hensley Field, he says. While one of the five sites immediately surrounding North Lake already has an SUP, meaning the zoning case has been approved and is in the midst of the permitting process, Cothrum says, just one well pad is not enough to frack the area.

"On its leases, the city is bypassing hundreds of millions of dollars ... that they sorely need," Cothrum says. Coupled with potentially liability, he says, an ordinance that energy companies see as restrictive could mean a sizable dent in the city's already dwindling wad of cash.

"You're always in a position to be sued by somebody," Welch said, adding that it's not the task force's role to consider lawsuits resulting from previous decisions by the city.

Those decisions are mainly the city's lease contracts with Trinity East and XTO, amounting to $34 million; it's conceivable that the companies could also sue for the lost (or never found) underground revenue. All of this will likely be taken into account by city council, but as Welch said, it's not part of the task force's charge, as delineated in the very beginning by chair Lois Finkelman.

Another interesting scenario that will potentially be affected by the city's set-back distances is the Cypress Waters residential and commercial development planned for the area north and east of the intersection of I-635 and Belt Line Road, the largest undeveloped tract of land in Dallas. The plan for the land, an area of more than 1,600 acres under development by Billingsley Development Corporation, includes drill sites (see the map on Page 13) polka-dotted around North Lake -- the same sites referenced by Cothrum. In a somewhat awkward real estate arrangement, Luminant, another MasterPlan client and the previous owner of the land, still owns the inside of the drill-site polka-dots. So, depending on whether city council approves the distances recommended by the task force, these plots can either remain relatively useless plots of random land or potentially lucrative bursts of income as planned.

Lest we lose interest in what's become a lengthy task force deliberation process, these things are a reminder that the drawn-out decision-making has some hefty implications for both the public and private sector. Though the city hasn't issued a single drilling permit, development plans and potential lawsuits hinge on the city's new drilling ordinance. The task force has two more scheduled meetings to put together recommendations for council. Then begins the next round of deliberation before the ordinance is finally put in place.

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Marc
Marc

Let's be clear about one thing - the City of Dallas is not legally liable for the $34 Million paid to XTO and Trinity East for the leases signed several years ago. Those leases never stipulated a right to drill for gas. They specifically stated that approval would have to come from the Dallas City Plan Commission and the Dallas City Council before any drilling would be permitted. If drilling was to be done in an area not zoned for such industrial activity, then a Special Use Permit (SUP) would first have to be obtained from the DCPC before the City Council could approve it and then approve a drilling permit.

The leases were for exclusive access to city-owned land, and nothing more. The city even extended the leases for an additional 30 months beyond their original 36 month period at no additional cost, which shows more than good faith on the part of the city to honor its commitments under the lease agreements. 

Any court would immediately throw out a lawsuit trying to recapture the money paid for land leases if drilling is not allowed because those leases never guaranteed a right to drill. They always declared that drilling was a separate matter that had to have city approval beforehand. Suing the city would only result in an even greater loss for XTO or Trinity East. They already know this, but they bluster and threaten because they believe our elected officials can be intimidated. Our elected officials have been educated on the terms of the contracts, and so they will not be moved by such threats.

XTO and Trinity East made the mistake of waiting until the last minute to apply for drilling permits (just before their leases were set to expire) due to the low and unprofitable commercial rate for natural gas. By the time they applied for SUPs and drilling permits we had found out about the dangers of this activity and begin fighting against it. Had they drilled when they first got the leases, then it would have been a done deal long before we learned about the risks, and all of this would be academic. It was their mistake, and the City of Dallas cannot be held liable for it.

Darrd2010
Darrd2010

Clearly defined. And that is just how it stands today. Thanks.

Marc
Marc

CORRECTION: That first sentence above should have read "paid BY XTO and Trinity East..."

Wes Scott
Wes Scott

I would always prefer a "deal killer" over a "people killer".

Marc
Marc

T. Boone Pickens once stated that "Nobody will ever get rich drilling for oil and gas in Dallas." We sit on the extreme eastern edge of the Barnett Shale. Dallas Cothrum lies through his teeth when he exaggerates the amount of revenue the City of Dallas and its residents will get from gas drilling here, and he knows it, but he does it anyway.

In 2010, Grand Prairie had 96 completed gas wells and received about $134,000 in royalties. In that same year, Chesapeake Energy was fighting against a moratorium in GP and in documents available on their website and as hand-outs at public meetings they told citizens that the moratorium risked costing mineral owners and businesses $240 Million in royalties, costing the city and school district $105 Million in tax revenues and costing the City of GP more than $3 Billion in total economic impact. Based upon the 2010 royalty payments to GP, it would take 1,717+ years to receive $240 Million in royalty payments. Most mineral owners and businesses will probably not be around in 1,717+ years.

Then, there is the other issue about production - 70% of gas recovered happens in the first year, and after that the recovery rate drops steadily until a well quits producing a viable flow after 3-5 years, as a rule (some wells will produce a little longer.) Actually, the rate of recovery starts to drop immediately as pressure from a well is relieved through output. It reaches the 30% of original flow level near the end of its first year, and the drop-off rate is a near vertical slope.

I am not a big fan of T. Boone Pickens and his predatory practices, but I do have to believe it when an oilman says that there is a reason why nobody has drilled in Dallas or Dallas County after all these years of oil and gas exploration and production in Texas. If they drill here and do not get viable flow, then producers will merely cement, cap and abandon wells and move on to other areas, but we will be left with thousands of tons of toxic, carcinogenic and neurotoxic chemicals pumped into the ground beneath or feet and our homes that will eventually come back to the surface to harm us and reduce our property values.

A setback of 1,000 feet is inadequate, but anything less is suicidal. Look up what happened in 2010, when a gas line exploded in San Bruno, California destroying 38 homes, severely damaging 120 other homes, killing 8 people, turning a neighborhood into something resembling Nagasaki or Hiroshima and shaking the ground at San Francisco International Airport over 10 miles away. And, ask yourself why the DFW Airport Board shut down the Chesapeake injection well on airport property last year because it was causing earthquakes under the runways.

There are places for natural gas production, but densely-populated urban areas are not among those!.

lorlee
lorlee

100, 1000, 10,000.  I don't think it really matters until we really look at the amount of water that is used in fracking and where that hugh amount of polluted water is disposed of.  We are in a drought with the forecast of worsening drought in the long term.  Can we afford using all of our water?

Marc
Marc

You are absolutely correct about the water issue. Our state climatologist has stated that we may be in this drought for another 5-15 years. All Metroplex cities are on water rationing (Dallas is on Stage One restrictions and about to go to Stage three or Four by spring.) Grand Prairie has halted all drilling using city water because of its severe shortage. Arlington has all but banned new drilling due to a water shortage, and recently fined Chesapeake for taking Arlington water to Grand Prairie to frac wells there.

If people actually had an understanding about the availability and scarcity of fresh water, then all frac'ing would be banned everywhere until drillers begin using non-water fracing fluids like LPG and LNG, which do not need all the contaminating chemicals and which are almost 100% recoverable, unlike toxic, carcinogenic and neurotoxic frac chemicals that are only about 20-50% recoverable.

WCGasette
WCGasette

Actually, Arlington, TX has never had a moratorium on using water for shale gas drill operations including fracking. Arlington had their residents on water restrictions throughout the summer months of 2011, but NEVER placed any restrictions on the shale gas operators. 

Grand Prairie,TX put in place a Moratorium based on its Drought Contingency Plan that restricts water usage for drilling in Stage 1 and Fracking operations in Stage 2.  The Stage 2 Drought Contingency Plan went into effect beginning August 3, 2011.  Chesapeake tried to ignore it. 

http://westchestergasette.blog...

Grand Prairie did this due to the very real fear that our water supplies would run out (water is currently acquired from Dallas and Fort Worth with some water in the summer months coming from GP water wells.) 

And even with the water Moratorium, there were exceptions made to fracking several wells at Joe Pool Lake.   The water that Chesapeake trucked to Grand Prairie from Arlington was from a fire hydrant on Chesapeake's Forks/Fulson/West Wing pad site located at 360 and Sublett/Camp Wisdom ~ a site that did not have any drilling or fracking activity at the time of the water theft.  Chesapeake was captured on camera trucking the water to the Harvey site at Lake Joe Pool in Grand Prairie, about a mile or so to the south.  And that's when all hell broke lose.

VivlianWozz
VivlianWozz

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deirde
deirde

Dallas Cothrum is a joke....a wantabee that everyone has his number.  He is in way above his head.  Grow up and visit again.  I hope the Task Force sets him on his ear. Then stupid companies will quit hiring him. 

Concerned Citizen of Dallas
Concerned Citizen of Dallas

If a 1,000-foot setback means the City of Dallas has a de facto moratorium on fracking by making it economically unviable, I'm all for it.

The parcels within Dallas that are attractive to the drillers are only attractive because they've fracked everything west of here. They're sweeping up the crumbs, so to speak, at the western edge of Dallas and the eastern edge of the Barnett Shale. And the Dallas crumbs are all either dangerously close to large bodies of water or frighteningly able to pollute vast watersheds.Something to listen to while you think about this:http://soundcloud.com/apefist/...

(They don't know I'm pimping their music here, but it's very apropos. I'm a huge fan of their work.)

Mountain Man
Mountain Man

Dallas Cothrum was reported to say, not to long ago that,  a 1,000-foot set-back was one that he could live with.  

I’m thinking this letter is a decoy to make the CitizensTask Force feel like they are winning and cause them to relax their efforts. Itwon’t work.  Just in case his letter isfactual I would like to congratulate the City Task Force for doing a good jobof protecting the citizens of Dallas.

Dunbar
Dunbar

And all of you wonderful souls have stepped forward in the municipal process as well I bet?  I love fat couch potatoes, living in glass houses, attempting to heave rocks!You people are sickening!  Come up with a better idea?

Marc
Marc

Many of us are, and have been, active in this matter for several years. Some of us are responsible for there even being a gas drilling task force. Perhaps you are not directly involved, but some of us have devoted thousands of hours of our personal time and at great personal expense to stand up for the truth and what is in the best interest of citizens of our communities and city.

Darrd2010
Darrd2010

We have been for two years which is why there is no drilling in Dallas and never will be.Legacy and reputations will be the 'deal killer'. Now, STFU.

heart and soul
heart and soul

Tell you what is sickening is all the lies Cothrum is telling just to get his fat little paw around a greasy dollar. 

No one on the task force bought his lies and looks like no one here is buying them either. If some folks don't like being called lying whores then maybe they should try to get their lying and whoring ways under control. BTW, It is not a rock if it is true. The truth only hurts the house built of lies.

Darrd2010
Darrd2010

Dallas Cothrum will do anything like waving the 'missing out on millions of dollars flag" down at City Hall. He has no proof of that and neither does the gas industry. They all lie like a $3 whore.

Maybe if his family lived within 1000 feet of a proposed site, he would feel different. But as far as I'm concerned, that pitiful letter he put his name on along with loser Mark Housewright is not worth a damn.

Just like his daddy did in the past by representing developer Marlin Atlantis who mowed down thousands of trees out by Mountain Creek and then walked away in bankruptcy. Now, his son Dallas we hear is representing the new developer out at Grady Niblo who wants to cause more havoc.http://www.dallasobserver.com/...

This only shows that Willie and Dallas Cothrum are in the business to ruin the City of Dallas at any cost and walk proudly down the halls of Marilla Street with their arms slung around our civic leaders.

They should all be banned at Dallas City Hall. MasterPlan: Worthless.

heart and soul
heart and soul

Cothrum is such a yappy little whoredog. The apples don't fall far do they.

Brantley Hargrove
Brantley Hargrove

Aw hell, Fidel hates fracking. That means every God-fearing, liberty-loving American must have his backyard fracked.

http://www.reuters.com/assets/...

Edgar
Edgar

Interesting.  Certainly consistent with his populism and emphasis on social welfare.  Also consistent with his connections to Hugo Chavez and PDVSA.

ChikinFriedSnake
ChikinFriedSnake

Right. 1000 feet is just a "bridge too far". By all means, let's make it 900 feet.

*facepalm*

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