What the Pro-Drillers in Southlake Don't Get About the Shale Gas Market

Categories: Biz

fear and fracking.jpg
Justin Renteria

Back in November, we wrote about Southlake, the well-heeled 'burb at whose city limits sign the fracking boom was knocking. In many ways, Southlake was emblematic of the difficulties gas producers faced as they followed the shale formation -- a mile underground -- out of the pastures and into densely populated areas.

Sometimes, they found, there was resistance. And nowhere in the Barnett shale region was that resistance as stiff as it was in Southlake, where conservative moms discovered that Sarah Palin's "Drill, Baby, Drill!" mantra wasn't such a rallying cry when they could see the derrick from their kitchen windows. So they petitioned the City Council again and again until it crafted a thorough drilling ordinance. In the meantime, two of the biggest players in the Barnett, XTO and Chesapeake, pulled out of Southlake altogether.

At the time, it wasn't entirely clear whether pulling up stakes was a response to tough municipal regulation, or just the low price of natural gas, which likely rendered the few wells they could drill within city limits economically nonviable.

Since then, Chesapeake has cut its operations in shale formations, along with Encana and other companies. The gas glut -- coupled with sagging demand for natural gas -- meant it simply didn't pay to play here. But now the pro-drillers of Southlake -- often landowning, longtime residents with mineral rights -- are making a second advance, circulating a petition calling for a new drilling ordinance -- one, they hope, will bring fracking back to Southlake.

Here's the problem: According to the Paragon Report, an investor's research service, that shockingly unseasonable winter we just had means that natural gas inventory levels increased in March for the first time since 1977. Gas inventories this summer are expected to exceed storage capacity. That means we have yet to see how far natural gas prices can fall.

I appreciate this Southlake group's gusto. Among them is Zena Rucker, an incredibly successful octogenarian who is one of the biggest landowners in town; once ran her own flight school; and can remember a Southlake that was populated mostly by Baptist farmers. Unfortunately for her, even a drilling ordinance that allows producers to frack a well sunk in the middle of a kindergarten class won't be enough to entice the industry to return to Southlake, at least for now.


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Timothy R. Ruggiero
Timothy R. Ruggiero

This isn't a Democrat or Republican issue, it's a Money issue; more precisely, a promise of money issue. Dishonest Landmen and gas company reps tell stories of riches, the American Dream, Jobs, Reducing America's dependence on foreign oil, and other heart warming stories to get unsuspecting mineral right owners to sign on the dotted line. 

I have yet to see one single mineral right owner have a drill rig, pipeline, dehydration unit, or compressor station set up next to their home. Not one. I have seen plenty set up next to homes where the mineral right owner's home is as far away as possible, and readily signed off setting up this dirty, noisy and dangerous equipment next to someone's else's home who had no voice in the matter. No gas company execs have them anywhere near their homes, even with the few that actually live on the shale. Southlake residents like Range Resource's David Poole are all too happy to come testify to Southlake's city council and tell people how 'safe' all this is, but still not willing to expose his own family to this mess. 

Maybe, just maybe, the city council, through the voices of it's residents, have figured out that the 'promise' isn't worth the many risks involved. Maybe they have looked around and have seen for themselves what drilling has done to other communities. Maybe they have figured out that when gas companies lobby for variances to every ordinance on the books that in plain English, they asking for a pass to be excused from being held accountable for the inevitable leaks, spills, noise and constant emissions this Industry brings.

Marc
Marc

In the event any of you wants something to really go ballastic about, then here it comes.

For quite some time now several pro-drilling Dallas City Council members have been meeting behind closed doors with industry reps while the re-writing of our gas drilling ordinance is pending. Yet, these same Council members, who were elected by and to serve the citizens of the City of Dallas, are refusing to meet with citizens who have concerns about gas well drilling.

Today, we made requests under the Texas Open Records Act for all records of such meetings over the past three years. It has sent Queen Mary into a hissy fit, but she has no option except to comply with the law. This is going to become a media feeding frenzy as the proof comes out that some of our elected officials have been bought and paid for by industry instead of representing the best interest of citizens.

We are encouraging ALL concerned citizens to immediately contact their City Council reprsentative and request an immediate meeting to discuss acting to protect citizens' health and safety, property values, quality of life and our environment rather than cater to an industry that makes its money polluting water, air and soil, injuring, sickening and killing people and animals, and preparing to send our domestic energy to Europe and Asia after telling us how this has all been about "America's energy independence from the Middle East" and lying to us about our 100, 200, even 300+ years of domestic natural gas resources, which the US EIA downgraded by over 50% last year and another 70% just last month.

If you are outraged that YOUR Council member would sell you out to industry, and that he or she will meet with industry reps, but will not hear from concerned citizens, then you need to write, call, e-mail or fax them today and demand accountability - demand a face-to-face meeting to hear your concerns, and let them know that you will hold them accountable at the ballot box the next time they are up for re-election

Marianagriggs
Marianagriggs

 Marc,Can you provide a listing of Council Members and their contact information? Here is the link to the Dallas County Elections site:http://www.dalcoelections.org/...Most of the time people can search the site at this link and find out whether they are registered or not, and their council district. Redistricting has killed the link until a new map comes out. Maybe we just need to call all of them. They represent all of us, after all.I have seen Gas Drilling Industry Publications in the Council office. Why are they there? Who has subscriptions and why?Keep asking questions and thanks for all your work,Mariana

Edgar
Edgar

"Gas inventories this summer are expected to exceed storage capacity."

How can inventory exceed storage capacity?

Marc
Marc

Poor Edgar! Always lurking around trying to debunk the truth!

Edgar has apparently never heard of shutting in wells. The volume of gas being produced today already far exceeds the market for that gas, which is why it is now selling for less than $2.00 / mcf, less than one quarter what it costs to produce it. Most wells being drilled today are being shut in immediately because the market is so unfavorable.

Gas companies are holding back supplies in anticipation of having export terminals near Seattle, Beaumont and New Orleans on-line in three years so they can compress and liquify it for shipment to India and China where it will be guaranteed to "free America from Middle East energy imports."

After all this time Edgar just does not "get it." because he does not study. Or, perhaps he DOES "get it", but just chooses to be intellectually dishonest. Who knows? Only Edgar can tell us which it is, and he ain' talkin'! Well, actually, he is talking, but he is not sayaing anything.

Edgar
Edgar

Bring it down about five notches, Marc.  This has nothing to do with shut-in wells.  The inventory Brantley referred to was the inventory of produced gas (not shut-in gas, which falls into the category of proven reserves).  Logically, the inventory of produced gas can't exceed storage capacity.  I wasn't trying to debunk anything or make any grand points.  Brantley politely answered my question.  You went off the rails.  Try to control your blind rage.

Edgar
Edgar

God, you're a dipshit.

JOSHUA
JOSHUA

 TELL THAT TO OBAMA FIRST

Marc
Marc

Well, since you apparently have no ability to apply logic I was merely pointing out that as the glut in storage starts to approach maximum storage capacity wells will merely be shut in, and no further gas will be produced unless and until there is storage capacity.

Had you not tried to make a non-existent point on a straw man argument I would not have needed to point out the obvious to you, and it appears you still did not get it.

I am sick and tired of all the lies from industry and its stooges who carelessly disregard truth and fact for what they want to sell to everybody. The kidd gloves are coming off and we are going bare knuckles with industry and its minions from now on. Every lie will be called out. Every false claim will be challenged. If you cannot stand the heat, then get out of the kitchen!

Brantley Hargrove
Brantley Hargrove

 Key words here: "...are expected to.." Something's gotta give between now and this summer.

Montemalone
Montemalone

republican greed (and environmental disregard) knows no bounds

Dallas_Joe_Schmo
Dallas_Joe_Schmo

So you assume that because this "wealthy" lady lives in Southlake she is a republican?  Just like you, I'll conjecture that since she's 80+, she's a lifelong democrat and most likely votes that way.  As for the greed, well I'm pretty sure that most people regardless of political party are only too happy to have an oil well in their back yard if the price is right.Look up your statistics before you make such stupid comments.  Democrats are far more likely to have an "enviornmental disregard" since a large number are likely to be of a lower socio-economic status.  It's the rich (read Republican) that tend to want unspoiled vistas and clean everything and usually demand best-practices when it comes to enviornmental protections. 

Marc
Marc

BULLSHIT! ALL Republicans want an oil well AND a gas well in the backyard! They just want them in the backyard of poor people, not in their own backyards.

While I agree with you that one cannot determine a person's political preferences based upon where they live and how much money they have I would go WAAAAAAY out on a limb and say that 95% of Democrats and Liberals would oppose measures that endanger the environment while the exact opposite is true of most Republicans.

Dallas_Joe_Schmo
Dallas_Joe_Schmo

I never said "ALL" and don't try to make generalizations.  I do however point out that what is assumed by the original comment is factually incorrect.  Trends and studies actually show the opposite.  Don't think by making the argument that I'm making a blanket statement, rather pointing out the pigheadedness of the original statement.  I actually fall into the category of people who are rather independent and not neatly confined to any one group so I tend to skew these types of generalizations myself.

lorlee
lorlee

And you view all poor people as willing to sacrifice their health and community for a buck.  As with many blanket statements, Neither generalization is probably correct.

Dallas_Joe_Schmo
Dallas_Joe_Schmo

95% of people like you might oppose measures (but that's not the 95% of Democrats and Liberals)  I'm gonna go out on a limb and say that most people who vote democratic do not fall into any of your categories.  Take for instance a lower-income-Democratic minority who lives south of I30.  Do you honestly think they would give a shit as to the enviornmental damage a well might cause if they were offered thousands of dollars a year to put it in their backyard?  It has nothing to do with the way they vote, but rather their lot in life.The point is, while you view most republicans as greedy and thus not caring about the enviornment.  The fact is that the little old lady mentioned above is more likely to demand enviormental damage mitigation on her expansive land than the "traditional" Democratic voter on theirs because she can be choosy on how her land is cared for.

Texaspainter
Texaspainter

Her neighbors tell me that she is bat shit crazy.

Brantley Hargrove
Brantley Hargrove

She's actually a really nice lady, and has led a pretty interesting life. From what I remember, I don't think XTO or Chesapeake ever had plans to drill on her property. I think they wanted to run a lateral beneath it.

One thing I try to remember is that many of the folks who oppose fracking Southlake at one point signed on the dotted line and cashed that check.

Southlaker
Southlaker

We sure did "sign on the dotted line and cashed that check", Brantley.  That was BEFORE we knew our city council had the ability to grant variances left & right to our ordinance, which essentially negated any protections that were in the ordinance.  I feel sure the mistake of signing leases would NOT happen again here.  Fool me once, shame on you. Fool me twice, shame on me. 

TXsharon
TXsharon

Even if you own a lot of land like Zena, the royalties won't compensate you for the devaluation of your property not to mention the loss of quality of live. 

Tim Covington
Tim Covington

She doesn't care. It just means more money for her until she dies (most likely soon). If the land is devalued, she pays lower property taxes. And, once she is gone, it won't matter to her.

Darrd2010
Darrd2010

 LOL! 'ol girl ain't gonna make much. Just like the rest of them hillbillies.

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