City Council Rejects Eighth Avenue Variance
by Steve-O
At the end of a very long evening and the vote was tallied, the elation of most in the City Council chambers was matched only by their disbelief as they watched a unanimous vote decline a variance for the proposed drilling site at Eighth Avenue. Even though it was the first time the City had denied a high-impact variance, I was still marveling at how the whole thing wrapped up.
At about the three-and-half-hour mark into last night City Council meeting, City Manager Dale Fisseler exchanged some words with Mayor Mike Moncrief, then stood up from the dais and took the long way around the room to come up behind Moncrief’s predecessor, former Mayor/current Chesapeake Energy consultant Kenneth Barr and asked for a private conference in the hall (at left, Ken’s standing behind an unidentified woman).
Shortly after Fisseler and Barr returned to the chamber, the Mayor cut off public comment and allowed District 9 representative Joel Burns to introduce a motion to deny the high-impact variance sought by Chesapeake and the Fort Worth Western Railroad to drill at the Eighth Avenue site. Kathleen Hicks quickly seconded the motion.
What happened over the next few minutes might be a game-changer in the way the city permits gas wells inside the urban core of Fort Worth.
One by one, the council spoke. And one by one, even some of the most ardent supporters of gas drilling on the council — Carter Burdette and Danny Scarth — said the same thing. Drilling a gas well within 225 feet of residences that don’t want that well is not acceptable in the city of Fort Worth. Sal Espino and Frank Moss agreed.
Then Chuck Silcox — who earlier in the day postponed the permit hearing on the Alton Road pipeline from the proposed TCU gas well — weighed in to support Burns and added that he believes that there should be no waivers at all from the 600-foot setback requirement.
But the biggest bombshell came from the Mayor, who said that there are places in the city where gas drilling is not appropriate before siding with Burns against the permit.
And with that, the gravel came down. Eight opposed, none in favor, Jungus Jordan recused himself because of a conflict of interest related to income that his wife received from a gas well.
From things I had been hearing over the past few months, I have often wondered if Chesapeake was really trying to get this variance approved just stave off a lawsuit from the Fort Worth Western railroad. The neighborhoods seemed so firmly against it, that it really didn’t seem that this variance had a realistic chance of succeeding.
However, over the past few weeks of community meetings, donations to neighborhood associations, direct mail, door-to-door solicitations and automated phone calls, it became clear that Chesapeake was really trying to make this work.
But as a visibly nervous Julie Wilson gave her presentation in favor of the permit for Chesapeake Energy, we got to see of how hamfisted Chesapeake’s efforts really were. When Wilson spoke of the “silent majority” in these neighborhoods who favored this drilling location as she cited research from the Tarrance Group, it reminded me of Bob Bolen’s column in the Star-Telegram recently that made a similar claim citing research from Bryan Eppstein.
Two thoughts — No. 1: When you are quoting Richard Nixon, you are not appealing to the better angels of our nature, you are appealing to paranoia. No. 2: As Mark Twain once said, there’s three kinds of lies: lies, damn lies and statistics. When the people who showed up against this site outnumbered those who supported it by about 25 to 1, I’m inclined to think that Julie’s PowerPoint contained all three. And when the president of the Paschal Neighborhood Association, a neighborhood that signed with Chesapeake and would have had their minerals produced by this site, actually spoke against it, it became clear that this variance didn’t have a chance.
But enough piling on. As surprising as the evening was, what’s happening next is by far more interesting.
The thought was that if the City denied a permit on this site or the TCU site, Chesapeake would file a lawsuit contending that the City has no right to enforce a 600-foot setback. Instead, the setback should be only the state-mandated 200 feet. The word was that Chesapeake had already retained some high-dollar lawyers for this and were rarin’ to go with a lawsuit. Chesapeake has already filed suit against Grand Prairie in what amounts to a proxy suit against the city of Fort Worth over compressor stations, so it appeared the full-court press would be on.
Or would it? The unanimous vote might give pause to Chesapeake. Do they really want to pick a fight with the Mayor and the entire City Council? It’s one thing to be chummy with the Mayor and city leaders when your are putting tax dollars in the coffers, it’s quite another when you are costing the city money with an expensive lawsuit that challenges its authority.
Furthermore, Chuck Silcox kind of has Chesapeake by the shorthairs for now over the Alton Road pipeline. As I mentioned above, Silcox postponed consideration of this pipeline until December 2 and has said that he will not even consider allowing this pipeline to cross West Berry until it has a permit. And considering that well’s current location has the neighborhood north of Amon Carter Stadium up in arms, that’s not a slam dunk.
Honestly, I think the city should use more of its leverage to get Chesapeake to straighten up and fly right. If Chesapeake sues the city, I don’t know why the city doesn’t just refuse to allow any Chesapeake pipelines to cross city streets until the suit is resolved.
I’ve said it before, it doesn’t have to be this way. Most of the people who spoke against the site last night aren’t even against gas drilling, but they realize that some sites will not be able to be drilled using current technology. This is one well out of thousands. Gas production in the Barnett Shale won’t come to a screeching halt.
However, as the Mayor pointed out last night, we need a better gas drilling ordinance — that would be a good first step. Ideally, that ordinance would include a plan to minimize the impact of gas drilling operations by using common infrastructure wherever possible with pad sites, pipelines and compressor stations. We need to realize that some sites may not be able to be developed, but that could change in the future.
I think the Council took a big step in the right direction last night. Whether it lasts remains to be seen, but it was a positive step nonetheless. What would help now is less saber-rattling from Chesapeake and more cooperation.
C’mon, Julie, whaddya say? Together, we all could win.
Tags: Barnett Shale, Chesapeake Energy, chuck silcox, eighth avenue, Joel Burns, Julie Wilson, Mike Moncrief, TCU
18 Comments, Comments or Pings
John MacFarlane
Hoorah! I am in shock as well. I assumed it would be a 5-4 vote. However, I knew, that when Joel made the motion, that it was going to be voted down.
I am clearly shocked at what Mayor Mikey said. I always assumed he was in bed with CHK and other gas companies. But, on this one well, he made the right decision. He always speaks about quality of life in any speech he makes, and this vote will make continue the quality of life in the adjacent neighborhoods.
I was a little worried by Burdette and Scarth. They were asking most of the questions, such as “You are against this site, but have you leased your mineral rights?” Meaning, you just don’t want this in your backyard. Most of of us have leased our rights, but it was clearly for a well on the east side of Hemphill in an industrial area. To my knowledge, that XTO site is not a high impact sight. There’s a right place for wells and there’s wrong place for wells.
Well, this council has set a precedent by voting to deny the first high impact drilling variance. Let’s hope it continues. I will say that there are several more high impact variance votes coming up, so let’s help those neighborhoods by attending those hearings and speaking on their behalf.
One last thing, did you notice that most of the speakers in favor of granting the variance did not live in one of the affected neighborhoods. The mayor of Cleburne was even sitting next to Julie Wilson and Ken Barr. If you don’t think they asked him to speak, your crazy!
Oct 8th, 2008
charlie
It was clear last night that the residents of Fort Worth do not want to be treated as a business proposition; as if a few thousand dollars could justify putting entire neighborhoods in harm’s way.
Those Council members that keep repeating the mantra of “the rights of residents to develop their minerals” shows a complete lack of understanding of the value of OUR City. This is OUR CITY - NOT CHESAPEAKE’S.
The very simple and clear fact in any orderly society is this – no one has the right to put
another person, family, or household in harm’s way simply because they signed a mineral lease with a for-profit corporate entity. If certain Council members cannot grasp that concept then perhaps it is time for them to find another City to “help out”. This City needs leaders that will not wavier in their care and concern for ALL NEIGHBORHOODS.
Oct 8th, 2008
Kevin Buchanan
This was a great moment, one of those that makes me remember why I love this city. I’m impressed. As a Fairmount property owner I could not be more thrilled that we’ve denied this drill site.
Oct 8th, 2008
David AKA Rico
I was almost as surprised about the level of civility displayed by all participants as I was by the outcome. Despite how contentious that this issue was, there were very few personal attacks. I am proud to be a Fort Worth resident today.
On another note, did anyone else hear the very thinly veiled threat Bob Robertson (CEO of Fort Worth and Western Railroad) issued at the end of his time before the council. I believe his words were, referencing the proposed commuter rail, “You will need us.”
Should be interesting.
Oct 8th, 2008
Ben
It is not a mantra, it is a well established rule that the mineral estate is superior to the surface estate. The City Attorney has made this point & the lawsuit in Flower Mound is based on the same principle. I think Chesapeake was just going through the motions to protect themselves from lawsuits by FWWR. It will be interesting to see if Mr. Davis takes his trains & goes home.
Oct 8th, 2008
John Peter Smith
Three thoughts for last nights “winners.”
Any chance that larger buffers would be adopted as a result of the Gas Drilling Task Force are gone. Not only would the gas companies fight it in court, such a move would probably double or triple the number of marathon sessions like last night. The council has no stomach for that.
Councilmembers will now claim the right to approve or deny high-impact well permits in their district. District 9 residents may applaud that while Mr. Burns is in office. They might not feel the same if he were replaced by someone whose campaign was financed by the natural gas industry.
Gas drilling will go forward. Period. The gas under that site is far more valuable than what’s on the surface. Nothing the council can do will change that. If you want to see what happens when government tries to legislate economic realities just look at the stock market.
Oct 8th, 2008
Suzette Watkins
I’m sure the technology will continue to improve in the industry (thanks to caring people like we saw & heard last night). When it does, perhaps we/they can revisit drilling at this site and others. Oh yhea, and Chesapeake and other companies will have the chance to renegotiate their contracts with mineral right owners who are more educated the second time around. It isn’t the end of the world if one’s contract time runs out. There will be plenty of second chances, I’m sure.
Oct 8th, 2008
Adam S.
I’m really proud of the citizens that attended the meeting and got to see their city council shine.
These wells would have been too close to homes. CHK only had a plan for two wells, but they could have placed up to 18 at this site. That’s a lot of 24/7 drilling. A well at 8th Ave would dramatically impacted property values, in my opinion. I understand mineral rights owners have the right to exploit their minerals, but do they have the right to possibly dramatically reduce the value of a surface property-owner close to a well?
Oct 8th, 2008
Adam S.
I wonder what they were talking about in the hall?
Oct 8th, 2008
John MacFarlane
I think two testimonies made the difference last night, one from the lawyer who worked on two cases in east Texas where there were horrible accidents that killed people, and two, from Jim Bradbury, who is on the gas drilling task force. If you were not convinced by then, you are just a greedy, greedy person.
This is a quote from an email from the president of RPIA:
I was interviewed by Channel 8 this morning and was asked if I thought legal action would be forthcoming. I did point out that Chesapeake told me less than two weeks ago that if they lost with the City, they would pursue legal action. I asked the reporter if she had posed the question to Chesapeake. Her response was, “they are reeling from last night and haven’t determined next steps”.
@JPS, Why point out that gas drilling will go forward despite this variance denial. Of course, we all know that gas drilling will go forward. There are just more appropriate places than 8th Ave.
Oct 8th, 2008
John MacFarlane
Heard by a fly on the wall in the hallway:
Ken Barr: Ok, we give up. We’re just going to sue you now and give ourselves a black eye in this highly lucrative area for gas. You will crack under our massive money bags.
City attorney: Bring it on! Ok, don’t, I was just kidding.
Oct 8th, 2008
John Peter Smith
John: I meant that drilling may very well go forward at the 8th Avenue site; Without any lawsuit.
Quickly glancing over Tarrant Appraisal District’s numbers, it looks like they value a lot in Ryan Place at roughly $50,000. Figure a lot is what, roughly 1/4 an acre? That means the land is worth roughly $200,000.00 an acre
Gas companies have signed deals paying bonuses of anywhere from $27,000 to $30,000 an acre recently. That is just for the right to invest millions of dollars to produce gas from the land. So clearly the value of one acre of Barnett Shale gas is huge. The value of the natural gas that could be produce from that site is easily in the tens of millions of dollars, if not hundreds.
How much would it cost Chesapeake to purchase every property within the 600 ft. buffer? A couple of million? If Chesapeake owned all the land they wouldn’t need a variance. Compared to what they could make from that site a few million in land costs is nothing. Once they had their variance and had drilled their wells, they could put the properties back on the market and recoup most of their land costs. They could also put some nice lawyer language in the deeds to prohibit the new owners from opposing future drilling.
I didn’t mean my post to sound negative or discouraging. But people need to realize there are economic forces that not even the Cowtown City Council can control. Chesapeake made a error in pursuing that site. But forcing nervous neighbors to head downtown for marathon council meetings over every well site doesn’t strike me as a very effective way to govern either.
On a different note. Thanks to Steve for providing the first-hand account!
Oct 8th, 2008
David AKA Rico
JPS,
I disagree with your assessment of the 8th Ave site. Chesapeake has relatively little area leased around this site. The Paschal neighborhood, Baylor All Saints (which can be drilled from other sites), and the Berkeley apartments make up the majority of their leased area that can be accessed from this site. That means only about 80-90 acres or around 10% of the area that can be reached from the site.
I tend to believe that most of their efforts for this site are to avoid litigation with FWWR who, next to Chesapeake itself, has the most to gain. Chesapeake made a deal with FWWR early, before all the neighborhoods went with XTO.
Oct 9th, 2008
John Peter Smith
David:
You are more familiar with that specific site than I am. I read something about up to 18 wells being drilled and over 1,000 gas leases so it sounded like a much bigger deal.
However, the fact that Chesapeake doesn’t have a lot of leases in the area may not matter much. It could be that the gas companies have seen the way the political winds are blowing and have concluded that ultimately the most valuable asset in the Barnett Shale will be a permitted drill site, not hundreds of acres of leased land. That would explain their determination to drill there.
My larger point remains. The gas under our city is worth far more than anything on top. Any regulations that fail to consider that fact are sure to fail.
Oct 10th, 2008
David AKA Rico
JPS:
I believe the 18 wells were requested to prevent having another hearing in case they can expand the drilling from the site. As to the 1000 leases, over 400 of them are in the Paschal neighborhood, most of the remainder are interspersed in the Fairmount, Ryan Place and Berkeley neighborhoods, surrounded by XTO leases.
As to your larger point, any regulation that does not consider ANY major aspect of an issue is sure to fail. While the trend is not as apparent in Texas as a whole, the dominance of the mineral estate over the surface estate is diminishing. This is especially true as it pertains to urban gas drilling.
There is not a comparable precedent for what we are dealing with. The rules for gas drilling and transport that are in place currently do not necessarily apply to an urban setting and need to be revisited, more on the state level than the cities. Any legislation, ordinance, etc. must be informed by all viewpoints to reach the balance that is necessary for its effectiveness.
The gas companies are not inherently evil, not demons sent from hell as many would purport. They are entities who, like most individuals you meet, are consumed by self-interest and are reluctant to change their methods in response to a new paradigm. It is up to us as citizens of Fort Worth to convince them that addressing our concerns IS in their best interest.
Oct 10th, 2008
John MacFarlane
Maybe someone can elaborate on this but it is rumored that CHK will sue the city b/c its regulations for setbacks are stricter than the state’s. Would a states’ regulations trump a municipalities?
Let me also point out that Julie Wilson’s PowerPoint was not true on many accounts. One I want to point out was that the red circle on her map delineating the 600 ft area of impact was shown for just the 2 wells. However, it is known that that they applied for a padsite, in which the area of impact would be much larger and includes a lot more homes. The gentlemen that brought the cd and put the map on the wall showed the real area of impact, an oval more than a circle. Just one more reason to NOT TRUST CHK!!
Oct 10th, 2008
Recyclican
John - a city can make its laws more restrictive than a State, but not less. So (for example), if the State says 1000-foot setback, the City can say 600-feet, but not 1600-feet.
Oct 10th, 2008
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