Eighth Avenue Again? Hang On To Your Top Hat
by Steve-O
So, who’s the bad guy in this whole Eighth Avenue debacle?
Is it Chesapeake Energy? Sure, they’re easy targets. They’ve been blamed for every bad thing that’s happened in Fort Worth since 1846. And why not? These Oklahoma carpetbaggers come in here and brainwash our children, shoot poison into the earth with their injection wells, pollute our television screens with bad infomercials and build a hellish zombie-beast to run for City Council to advance their devious pro-drilling agenda.
OK, just kidding about the hellish pro-drilling zombie-beast on the city council. Although … a question for all of you … if that did happen, how could we tell the difference between said hell-beast and Carter Burdette? Maybe tie a pink ribbon around the left arm of one of them? Can we go ahead and clear this up by city ordinance just in case?
But would it rock your world if I told you that maybe Chesapeake wasn’t to blame for this bit of gas drilling brinksmanship on the South Side? Well, get ready to hang on to your top hats.
What I am hearing from reliable sources is that Chesapeake isn’t the one pushing for a high-impact permit for the Eighth Avenue Drilling Site. In fact, Chesapeake is actually sick of the whole deal and is ready to walk away. They haven’t been able to get the waivers they need to sidestep the high-impact permitting process and it seems unlikely that the City Council would vote in favor of a high-impact permit. The city has never voted against issuing a high-impact permit and I don’t think Chesapeake is eager to set that precedent.
But it looks like Chesapeake might apply for that high-impact permit after all. Why?
Sources say that Bill Davis, the owner of the Fort Worth and Western Railroad, really wants to “produce his minerals” at the Eighth Avenue site. And they say he’s ready to sue Chesapeake for breach of contract if they don’t move forward and try to get a permit from the city.
“Bill gets a lot of money from his gas leases,” one source said. “And he’s willing to play hardball on this one.”
How hard? This hard: if Chesapeake applies for a high-impact permit and the city council doesn’t approve it, they say he’s ready to sue the city. I guess he’s got his lawyers revved up, so why not.
OK, so what? Everyone from Mayor Mikey to Chesapeake mouthpiece Julie Wilson trot out this whole “we’re going to get sued” thing at the first sign of intransigence. We’ve heard this before.
But most people who want to produce their minerals and are all lawyered up don’t own their own railroad. If Wild Bill doesn’t get his permit, sources say he’s going nuclear. Word is he’ll block the proposed Northeast-to-Southwest Rail Corridor if they city doesn’t make with the high-impact permit. As we all learned from playing Monopoly, owning the railroad gives the right to do what you want.
But, I gotta tell you, you’ve got to find a pretty black place in your soul to out-evil Chesapeake. That’s a page out of the Montgomery Burns playbook.
But, hey, the FWWR and Wild Bill did buy some nice playground equipment for Tillery Park Playground. That makes them not so bad, right?
Right?
Tags: eighth avenue
13 Comments, Comments or Pings
Bernie
Wow! I think it’s very encouraging news that Chesapeake may be willing to walk away from the 8th ave site. If this can be confirmed, all residents who spoke up should give themselves a pat on the back for not giving up, but also deserve a little scolding for thinking signing with XTO was going to solve their problems.
Does the railroad really have that much acreage w/ minerals to produce? I thought the biggest assemblage to be reached from 8th ave was the Baylor complex.
Oh well, thanks for the good work, Steve-o. We’ll all be watching this closely.
May 6th, 2008
Don Young
I echo Bernie’s comments. Great job, Steve. Just like the Basses in Sundance Square, you have to wonder why these super rich guys are so eager to get involved with urban gas drilling despite the attendent risks to themselves and others. I understand that their DNA has O&G written all over it, but this ain’t west Texas. This is their/our hometown. One would think that they would be more protective of their investments and their standing in the community. If they keep this up, they will need to be held accountable, in the same way Chesapeake and XTO should be, regardless of their civic contributions to buy public favor.
Regarding the threatened lawsuit by Davis, I hope he’s not fooling. This is exactly what we need to test the legality of urban mineral extraction in a court of law. Bring it on Bill!
May 6th, 2008
Ben
FWWR owns the property all the way to Coleman County, so it’s conceivable their lease covers Tarrant, Hood, Erath and Johnson Counties. That’s at least 100 miles of 100 foot wide corridor which translates to over 1200 acres. TRE leased 400 acres between here and Dallas that brought in more money in bonus than they collected all year in fares.
I believe I predicted that he would pull his support for the SW corridor if the City crossed him.
May 6th, 2008
Bernie
Wouldn’t FWWR already have gotten its bonus money? And the royalties we’re talking about are only from the 8th avenue site, which can only reach a mile or two in either direction. FWWR’s minerals could still be produced all the way to Coleman County, netting plenty of royalties.
Sounds a little greedy to me.
May 7th, 2008
Ben
I agree. I was just trying to answer your question about how much acreage they have. Also, if he was sucessful he could re-lease with someone else & get another bonus.
May 7th, 2008
John Peter Smith
Bernie:
It is my understanding that a property owner who has a producing well actually on his property gets a much higher royalty than other nearby property owners. I know a man that is actively seeking a driller for his land for this very reason.
May 8th, 2008
Bernie
Right, though I’m pretty sure Chesapeake actually purchased the land they planned to drill from on 8th Ave.
Other parts of the FWWR corridor, though, I’m sure could be drilled from FWWR land.
May 8th, 2008
Ben
You are right JPS, the drillsite provider usually gets a higher royalty. Sometimes he gets the difference between 25% and the royalty rate agreed to by everyone else in the well. So if no one in Ryan Place got higher than 20%, FWWR would get 25% on their acreage and 5% of everyone elses acreage.
May 8th, 2008
Mark
Do not be fooled, the mineral estate is still the dominant estate and they have the right to use as much of the surface “as is reasonably necessary to produce those minerals”, but there is also something known as the Accomodation Doctrine, Google the case Getty versus Jones. Also, I thought the reason Bill Davis is threatening the city with pulling up RRtracks is that the city was going to withhold a drilling permit, or did I get this wrong?
Call me old fashioned but I would think as a state and a country we would want to explore and produce as much of our natural resources as we possibly could. The industry was hammered 22 years ago by the Reagan Administration with the Tax Reform Act of 1986. Carter to his credit before that had started the Synthetic Fuel Corporation which Reagan scrapped when oil went to $10 a barrell when the Saudis opened the flood gates on production, mainly for the reason to shut down our domestic production. Now we have oil at $120 plus a barrell. Whatever President comes next do not think that will stop? You think ethanol is the answer? From what I read to date that is a bigger pollutant than hydrocarbons. Read the book “Twilight in the Desert” about Saudi oil production and their oil and gas fields. The party is over for cheap energy, unless we get a clue in this country. Only when the population really starts to suffer will people stand up to the environmental lobby and say ENOUGH. You will only be able to blame the oil and gas industry for so long until after all the old and so-called new solutions are tried will it be realized that we have trully screwed the pootch.
May 8th, 2008
ghughes
The value of commuter rail on the FWWR tracks is substantial and probably worth more than the gas play, even with drilling on the 8th Ave site. For one thing the rail bed must be rebuilt and new track laid before trains can move at a reasonable speed. Notice how slow the trains run now? That’s because the track and everything below it is in crappy shape.
Why does that matter? Because The T, or the TRE, or whoever actually operates commuter rail there will end up paying 100% of the track rebuilding costs. Yet the FWWR will retain ownership and will be able to run freight trains faster over track that will probably be publicly maintained ad infinitum. Further, there will need to be some double-tracking to allow trains to pass. Guess who will pick up that cost.
In other words, the rail thing is a bluff.
May 8th, 2008
Bernie
Mark-
You’re absolutely right about ethanol not being a fix. The amount of fuel we must burn to produce biofuels makes the whole process folly, and has the potential to starve poor people across the world while we’re at it.
Biofuels are not a fix. Hydrogen is not a fix. Electric vehicles are not a fix. What we really need is not an “alternative” fuel, but rather to use less fuel in the first place. We need to find a way to break this country’s energy addiction, and we need to do it fast.
What we really need is to rebuild our infrastructure so that our wasteful style of living is no longer a “necessity.” We need trains, we need dense neighborhoods with necessities like grocery stores in walking/biking distance, and most of all we need to stop building everything to accomodate the car. Let’s stop widening roads and building seas of parking lot, and put some mass transit in instead. We just can afford to keep putting this off.
May 9th, 2008
Ben
FWWR gets paid the same for a slow train as they do a fast train. Do you really think their is a huge demand for freight on those tracks? Also, increased speeds means increased scrutiny. With the tracks in the condition they are in now, they can get away with minimal maintenance.
May 9th, 2008
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