Dallas City Council Denies Trinity East Drilling Permits
After nearly seven years, Trinity East has its answer. It all began when the Fort Worth independent answered a call put out by a cash-strapped city for bids to sink natural gas wells into the far eastern frontier of the Barnett Shale -- unproven territory few operators had ventured into. It ended Wednesday, at City Hall, where Mayor MIke Rawlings could not muster the supermajority needed to approve the permits after repeated denials from the Plan Commission.
In an impassioned monologue, Rawlings, who has warned that the city may face a lawsuit if it prevents Trinity East from drilling, said he was against drilling in urban environments. He nonetheless likened the potential face-off to a poker game.
"In the hand of the city is one card: that of time. They have to drill or spud by February 15, 2014. They have to make that decision in these few months. Two, we have done everything in accordance to our contract, especially with regards to health and safety. Three, we've taken our time because we went beyond the contract and have worked hard to find alternative sites and arrangements with Trinity East, to help them access their mineral leases. In my book, that's three of a kind.
"If we look at Trinity East's hand, the cards are not so good. The price of drilling is $4 to $5 million a well. The second card is the price of natural gas, which is below the rate of profitability, below $5 [per thousand cubic feet]. When we cut the deal it was $8 to $12. Experts told me the productivity of these reserves are uneconomic. There's been no successful wells drilled in this area," Rawlings continued.
"I predict there's no way Trinity East drills because it is not able. Their only chance in the poker game is one high card: that we vote to deny these [special-use permits] and they sue the city."
Ultimately, though, he could not convince the council to call Trinity East's bluff. Short of the 12 votes needed to approve, the tally came to nine. Council members Adam Medrano, Sandy Greyson, Scott Griggs, Philip Kingston, Carolyn Davis and Monica Alonzo -- no surprises here -- voted against.
If Trinity East's designs on Dallas minerals have an afterlife, it'll have to be in a courtroom. CEO Tom Blanton was characteristically circumspect in his statements about potential litigation. "Heavens, I don't know. We're so far from that," he told Unfair Park after the hearing.
"We came in to win."
Instead, he got tangled in a political morass stemming from assurances made to him by outgoing City Manager Mary Suhm. In an agreement only made public earlier this year, she told Blanton that he'd most likely be allowed to drill on city-owned parkland. Meanwhile, she told the City Council that there would be no drilling of parkland.
The intrigue deepened when the permits came back to the Plan Commission, even though it had already voted them down -- to the surprise and dismay of some commissioners. If the ploy had succeeded, there's little doubt that Trinity East would be drilling in Dallas.