Mayor Rawlings Says New Drilling Rules Are At Least Six Months Away. In the Meantime, Trinity East May Drill Under the Old Ones.
Trinity East's holdings. Click here to embiggen.
Yesterday afternoon, we were summoned down to City Hall via a text message from Paula Blackmon, Mayor Mike Rawlings' chief of staff. After several long months of silence, it appeared that there was finally going to be some semi-official word on the new regulations for gas drilling within Dallas city limits. (To recap, quickly: the drilling task force wrapped up their work months ago and submitted their recommendations to the City Council, whose lengthy and deafening silence has really pissed everybody off, industry types and environmentalists alike.)
According to Rawlings, it appears that the City Council is still at least six months away from finalizing and voting on any new regulations. In the meantime, Trinity East, the only company with its hat still fully in the ring, will go before the City Council in January. If their application is approved, they'll be allowed to drill under the old drilling regulations (the ones environmentalist types have argued are far too lax).
The latest non-action on drilling came last week, when one of the two energy companies involved, XTO, told the City Plan Commission to delay consideration of their specific use permit application. XTO would have had to get an SUP approved in order to drill, something that was expected to happen at the commission's next meeting on December 20. A spokesperson for the company wouldn't specify whether the delay was meant to be temporary or permanent.
Rawlings was careful to emphasize yesterday that he was speaking "as mayor, and not for the City of Dallas. I'm one of 15 votes on things. Until we take a vote and finalize, there's no action taking place." Last Wednesday, he said, the council was briefed in executive session about "some news," by which he meant XTO pulling their SUP application.
"We've been trying to do two things," Rawlings said. "One, make sure that the safety, welfare and quality of life of Dallas citizens are met. And, at the same time, that we are stewards of the taxpayers' budgets. So we do not spend money in lawsuits or being sued by contracts that have been instituted by the city in the past."
Rawlings was referring, of course, to the $33.7 million that XTO and Trinity East paid back in 2007 to purchase leases on city land. (Environmentalist groups like Texas Campaign for the Environment and Dallas Residents at Risk have long maintained that having taken the money doesn't obligate the city to allow drilling.)
Trinity East, then, will go before the Plan Commission on Thursday. If their SUP is approved, their application will go to a final vote before the City Council on January 23. If that passes, Rawlings said, they're free to drill.
In the meantime, XTO doesn't want to apply for an SUP quite yet, but has still requested that their lease be extended on the land they've purchased near Hensley Field. That lease is due to expire in August of 2013. Rawlings said the company's request for an extension will be denied.
After that, any new drilling applications, Rawlings said, will be subject to the new regulations, which he said are "at least six months away."
Back up a minute. Isn't Trinity East the company that wants to drill
pretty much exclusively in the floodplains along the Trinity River? And isn't that currently not allowed, because flooding or even just regular old rain could send noxious chemicals washing into the already-pristine Trinity? Yep. According to the Dallas Development Code, the company will have to be granted a variance in order to drill there.
But, see, Trinity East thinks that they should totally allowed to drill in the floodplain, as manager and shareholder Steve Fort made clear to Leslie Minora back in May. Not because there are any rules actually saying that they can do that by right, understand, but because, as he put it, someone at City Hall told them they could back in 2007.
"[W]hen we took the lease, we had that discussion with the city," Fort told Minora. "It was made very clear that adding that as a permitted use would not be an issue. In fact, as late as a year ago, when we were dealing with the staff, they were prepared to put that forward to the City Council and add that as a permitted use."
Fort declined to say who those talks had been with, or whether the agreement had been verbal or in writing, adding, "There was some documentation that I can't discuss." Got it.
So, does Mike Rawlings think Trinity East is allowed to drill in a floodplain?
"They will," he replied. "That deal was cut. If they drill. That's a business decision for them," he said.
And it's a business decision that will be made while the price of natural gas is extremely, unprofitably low.
"You gotta debate, what are the chances of, if we don't approve it, that we will get sued and lose, on one hand," Rawlings said. "And if we do approve it, will it be drilled, and will something harmful happen? The odds of those two things."
As a candidate, of course, Rawlings and his opponent David Kunkle both said they'd push for a moratorium on drilling within city limits. Is it fair to say his position on this issue has evolved, we asked?
"I don't remember saying that," Rawlings replied. "I'm shy about looking in the past and judging people for what they've done. I just try to stay in the present. I will tell you this, that this issue going forward is a very complicated one."
In the future, he said it will be "very expensive" for energy companies to buy drilling rights in Dallas. "Never say never, but I'm not in the camp of letting a lot of drilling. I don't think that's the role that Dallas needs to play."