Driller gets waiver to drill 5 new gas wells during Denton’s moratorium by Peggy Heinkel-Wolfe, August 27, 2014, Denton Chronicle
A Colorado energy company claimed the city of Denton’s moratorium on new gas wells has caused it hardship and received a waiver this week to drill five gas wells on land owned by a former Dallas Cowboy. In a 6-1 vote Monday afternoon, the city’s Zoning Board of Adjustment granted Vantage Energy a waiver to the moratorium. Several years ago, the company became the new owner of many old wells on the city’s west side, including the interest in 148 acres owned by Brian Baldinger, a host and analyst on the NFL Network who was an offensive lineman for the Dallas Cowboys from 1982 to 1987.
The board is a quasi-judicial body under the city charter and serves as the final arbiter in zoning questions. In Vantage’s case, the company had to show a “unique and undue hardship” that was not self-imposed and, by approving the waiver, the city would not harm adjacent properties and would do so “in harmony” with the purpose of the drilling moratorium.
Assistant City Manager John Cabrales said the City Council’s application criteria for waivers to the current moratorium was specific and narrow, but it was possible other energy companies could go before the board and ask for a waiver.
Board chairwoman Barbara Gailey, who voted with the majority, said she agreed that the moratorium put an undue hardship on the company. Before casting his lone vote against the waiver, board member Marshall Surratt cited his concerns about the projected 30-year life of the gas wells and any homes or businesses that might be built there in the future.
Company representatives told the board that they were caught off-guard by the moratorium, which was enacted in May and is set to end Sept. 9 unless the council extends it. Vantage had submitted a new site plan for the property and got new permits to redevelop the gas wells. But before the company could drill, it needed to grade the land. Hickory Creek runs through the property, which is near U.S. Highway 380 and Nail Road. By the time Vantage secured approval from the Federal Emergency Management Agency [Refer below] for new floodplain maps, the permits from the city expired.
The representatives told the board that they understood the purpose of the moratorium was to stop noncompliant gas well development. “We are willing to work with the city to move these projects forward,” said Seth Urruty, an asset manager with Vantage. [Just how many times does Denton need to have its ass kicked by energy companies causing harm, polluting and flagrantly thumbing their noses at the laws, rules and their own “best practices?”]
Two Denton residents spoke against the waiver during a public hearing.
Cathy McMullen cited the company’s inspection record, saying it showed that Vantage took a long time to bring the old well into compliance with basic safety requirements, including a shut-in valve.
Ed Soph told the board the purpose of the moratorium was not to get compliance with the current ordinance but to address its weaknesses, including one that allows new homes to be built close to old wells.
Currently, the nearest house to the Baldinger unit is about 2,100 feet away, staff said. Baldinger, who lives in New Jersey, has no house or other buildings on his land. He said he bought the land in 1992 as an investment.
Urruty told the board that the company considered it critical to both drill and hydraulically fracture the new wells as a unit. The company has already drilled and fracked “long-term” wells for the area, he said. “Fluids will contaminate the well if we wait too long,” Urruty said. [Since when do companies care about contamination of anything?]
Without the waiver, Vantage stood to lose about 10 percent of production from the 16 wells planned for that unit, or about $14.4 million, Urruty said.
That translates into a total loss of $900,000 per well to the mineral rights owners, according to documents Vantage submitted to the city.
Baldinger said he didn’t sign an oil and gas lease until about 10 years after he bought the land. He retains about 18.5 percent of the interest in the units, according to county tax records. Another company, Western Chief Oil & Gas Co., was the first to drill on his land.
After Vantage took over, Baldinger said he got a call and a letter from Vantage about the change. The company negotiated with him for additional land needed to expand its operations, he said. … Baldinger said he was aware that Vantage planned to begin drilling the wells in October and wouldn’t be finished with fracking and bringing the wells into production until May.
That is, if Denton voters don’t ban fracking in November. [Then what will Vantage and Baldinger do?]
Baldinger said he was not a part of Vantage, but he won’t get his royalties if the company isn’t able to drill and frack the wells on his land. “I’m a businessman,” he said.
Vantage is a “little bit” concerned about the possibility of a ban, he said, but he was told that the local initiative was being pushed mostly by college students and some university faculty. “I can’t imagine anyone in Texas banning fracking,” Baldinger said. …
The City Council adopted a moratorium on new drilling permits just before a standstill agreement with another operator, EagleRidge Energy, expired. The city has had a long-running dispute with EagleRidge over its operations reworking old wells in new neighborhoods, which had that company’s operations drilling and fracking as close as 250 feet from homes.
Meanwhile, a petition signed by nearly 2,000 registered voters in Denton has forced an initiative to ban hydraulic fracturing on the November ballot. Hundreds of residents, and dozens of industry representatives, turned out to speak on the issue at one of the city’s longest-ever public hearings on July 15.
Resident Adam Briggle, who is a professor at the University of North Texas, said he wasn’t surprised by attempts to downplay the community’s concerns and involvement. When people are far removed from the consequences of their decisions, it’s hard for them to see implications other than the financial ones, Briggle said. In this case, it’s hard for people not living in Denton to see the effects that hydraulic fracturing is having on the community’s character as well as public health and safety, he said. County property records show that few Denton residents are mineral rights owners who benefit directly from the wells being operated here, Briggle said. [Emphasis added]
FEMA: no flood assistance for property owners with natural gas leases by Katie Colaneri, August 25, 2014, State Impact
The Scranton Times-Tribune reports that property owners with natural gas leases are no longer eligible for federal hazard mitigation assistance after a flood. The new policy, enacted by the Federal Emergency Management Agency on May 5, has affected eight households in Pennsylvania in Wyoming and Lycoming Counties.
It means that FEMA will not buy out flood-prone properties or pay to assist raising or relocating homes and other structures if the owner has signed a lease with a developer.
You can read the FEMA policy issued on May 5 by clicking here. [Emphasis added]
FEMA halts flood assistance for properties with gas leases by Brendan Gibbons, August 21, 2014
In fall 2011, about a month after the flooded Meshoppen Creek spilled over its banks and into their basement, Pete and Sharon Morgan applied for federal flood assistance to help them move out of their home. They won’t get it, at least not anytime soon, due to a little-known policy the Federal Emergency Management Agency issued May 5.
It’s because of their gas lease with Chief Oil & Gas LLC. FEMA indefinitely banned the use of hazard mitigation assistance money for properties that could eventually host horizontal drilling and hydraulic fracturing, even if the leases don’t allow for development on the surface.
Under its hazard mitigation assistance program, FEMA pays to acquire properties in flood zones or reduce flood risks by raising or relocating structures. The agency creates these incentives so it doesn’t have to return with disaster dollars after every flood event.
The property title usually goes to local governments, which can use it as open space, allowing floodplains or wetlands to act as natural flood buffers.
The Morgans are one of eight households in Pennsylvania — five in Wyoming County and three in Lycoming County, according to the state Emergency Management Agency — whose applications for hazard mitigation assistance won’t yield payouts because of their gas leases.
The new policy was the subject of a Wednesday roundtable discussion at Wyoming County 911 Center in Tunkhannock, organized by U.S. Rep. Lou Barletta, R-11, Hazleton. FEMA deputy associate director for mitigation Roy Wright attended, along with state and local emergency managers and gas industry representatives. “We, right now, need to have some direction on what to do, how to get these mitigated,” Wyoming County emergency director Gene Dziak told Mr. Wright. “Next month is three years (since the flood). We need to get these people out of these properties.”
Pennsylvania Emergency Management Agency chief deputy director Robert Full told Mr. Wright he wished he had cleared all 21 households that applied for assistance after Hurricane Irene and Tropical Storm Lee before the May 5 rule. It will only apply for future acquisitions, not those already approved, Mr. Wright said.
“We were very concerned from the moment it was announced,” Mr. Full said. “It was implemented like overnight.”
Mr. Barletta, along with Lou D’Amico and Kevin Moody of the Pennsylvania Independent Oil and Gas Association and Lauren Parker of the Marcellus Shale Coalition, all expressed dismay that the agency did not seek industry input on the policy. Mr. Dziak and Mr. Full said the same about Pennsylvania emergency managers.
Mr. Wright confirmed FEMA did not conduct a formal comment-seeking approach. He also pointed out that this grant program always required a “clean title,” a property free of encumbrances, burdens or limitations.
That would likely have prevented FEMA involvement with a property undergoing conventional oil and gas development, when the well pad is positioned vertically over the producing part of the well bore. Now, leased properties with oil- or gas-rich shale below won’t stand up to FEMA’s “clean title” requirements. “I’ll be honest with you, this has been difficult for us,” Mr. Wright said.
The policy might not last forever.
FEMA is waiting on studies by the U.S. Environmental Protection Agency, the Bureau of Land Management and the Department of Energy on the environmental effects of horizontal drilling and fracking, he said.
After those agencies release their findings, FEMA could take another look at what risks underground horizontal drilling and fracking might pose to open spaces and floodplain functions. [Emphasis added]