What the Frack? Texas Cities May Be Unaware Their Oil and Gas Ordinances Are Invalid
In 2015, the Texas Legislature passed legislation that drastically limited the ability of cities to make and enforce oil and gas regulations within their jurisdictions. The so-called “Denton Fracking Bill” arose after the City of Denton became the first town in Texas to ban hydraulic fracturing, or “fracking,” within its jurisdiction. Fracking is a widespread – and controversial – method of shale gas extraction that uses large amounts of water pumped into rocky channels at high pressure to release natural gas. Fracking has been lauded as a boon to U.S. energy production and decried as environmentally destructive. In response to the Denton ordinance, the Texas legislature drafted the “Denton Fracking Bill” in early 2015.
The Texas Municipal League, which represents and serves as an advocate for most of Texas’s cities, both large and small, vehemently objected to the “Denton Fracking Bill” as it was originally conceived — an almost total preemption of all local oil and gas regulations. TML softened its objections — somewhat — after the legislature softened the language of the bill — somewhat. The statute, as codified into law, now does say that an ordinance is prima facie commercially reasonable if it has been in effect for at least five years and has allowed oil and gas operations to continue. Regulations concerning “fire and emergency response, traffic, lights, or noise, or imposing notice or reasonable setback requirements” are specifically listed as permissible restrictions.
The legislature passed the bill with those changes, and it was signed into law by Governor Greg Abbott and became effective immediately in April 2015. Codified as Texas Natural Resources Code Section 81.0523, the law does in fact contain strong language that oil and gas operations are the exclusive jurisdiction of the state and that municipalities are expressly preempted from enforcing oil and gas ordinances with rare exceptions.
Specifically, any downhole restrictions, fracking restrictions, or anything else that affects underground operations is prohibited. Any above ground regulations must be “commercially reasonable” and must not “effectively prohibit” any operations by a “reasonably prudent” operator. It effectively banned any local restrictions on fracking, and in the process invalidated existing city ordinances across Texas. The sweeping nature of the law was such that many city officials may not even be aware to what extent the state law preempts their local regulations. Many of them may only discover the issue when a local oil and gas company begins production and the city seeks to enforce its ordinances.
If a city wishes to argue that some of its above-ground restrictions are not preempted, a city attorney would need to evaluate each one individually in the context of whether it is commercially reasonable under the statute, is not an effective prohibition of oil and gas operations, and is not otherwise preempted. However, the overall conclusion, unfortunately, is that most of the city’s ordinances regarding oil and gas are probably preempted, and any of those restricting any below-ground activities certainly are preempted.
Please do not rely on this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice. Information about our municipal law practice can be found here.
Drew Shirley is a Houston attorney with experience in tort and business litigation and business and real estate transactions. Shirley graduated cum laude from Duke University, then received two advanced degrees – a master’s in journalism and a law degree – from the University of Texas at Austin. He joined the Randle Law Office in 2015.