What is the true intent of HB40?
Dear, Dear Readers,
Please pay attention because there will be a test at the end over the true intent of HB40.
Industry spent $21.3 million to buy Texas politicians during the 2014 election. These legal bribes were necessary to get legislators on board with stripping away from their constituents a 100-year Texas tradition of concurrent regulation of oil and gas by cities and state. Industry said HB40 was necessary because they needed statewide regulatory consistency and no patchwork quilt regulations. There is a record of legislative intent of HB40 in abundant quotes:
However, the parties contend that recently adopted municipal regulations create a patchwork of inconsistent regulation that undermines the safe and efficient production of oil and gas. H.B. 40 seeks to ensure consistent statewide regulation of the oil and gas industry. HB40 AUTHOR’S / SPONSOR’S STATEMENT OF INTENT of HB40
Darby said his bill would do away with the “patchwork of inconsistent regulation that undermines” the future economic potential of the state’s most valuable natural resource.
“In the absence of this bill, a statewide patchwork of oil and gas regulation is likely,” Darby said. Source
HB 40 promotes consistency, fairness and lawful use of local ordinances by clarifying the responsibilities of cities and the state for regulating the oil and gas industry. Todd Staples, TXOGA
“I think that it’s going to provide more certainty and consistent behavior by operators,” said Burleson, managing partner in Burleson in Houston. “We think it’s a very good bill.” Texas Lawyer
This law ensures that Texas avoids a patchwork quilt of regulations that differ from region to region, differ from county to county or city to city,” said Governor Abbott. Source
The Texas Oil and Gas Association praised the bill, saying it would prevent cities from adopting a patchwork of local regulations that could slow down the state’s drilling boom and threaten its energy-reliant economy. EnergyWire
However, the parties contend that recently adopted municipal regulations create a patchwork of inconsistent regulation that undermines the safe and efficient production of oil and gas. C.S.H.B. 40 seeks to ensure consistent statewide regulation of the oil and gas industry. HB40 Bill Analysis
Through hours of hearings, Drew Darby (the author of HB 40) and other legislators honed a message about the purpose of HB 40: We need regulatory certainty! Oh, how horribly the industry would suffer if it were subjected to a patchwork quilt of local laws! Frack Free Denton
Update to add another statement about intent:
“We have to have orderly regulation, and that can be done if the industry, the citizens, and local governments work together and not against each other,” said Mills. “We certainly understand that you can’t go in and start drilling next to homes and churches and schools — there has to be set-back provisions.” Alex Mills, president of The Texas Alliance of Energy for Houston Business Journal, Oct 1, 2015, 2:58pm
Recent social media exchanges between Steve Everley and me hinted that consistency is not what industry is after in HB40. When asked for an acceptable setback distance, he said that it depends on geology. When pressed further for a specific setback distance in the Barnett Shale geology, he said it would depend on where in the Barnett Shale. And so the conversation continued.
Therefore last night’s testimony at the Denton City Council meeting by Ed Ireland was not a total surprise to me.
The video is here. Ed Ireland starts at 7:35:17. But you don’t have to watch it because I transcribed the pertinent part.
Gregory: Is it accurate that commercially reasonable might change based on what your able to sell it [oil and gas] for?
Ireland: I think that’s one component but there are a lot of components of that calculation and it’s going to vary, not only by that but, by municipality. So what might be commercially reasonable in one municipality may be totally different from another. So there is not going to be a statewide standard about commercially reasonable.
Gregory: Wha, explain that please.
Ireland: Well, for example, a setback requirement in one city might, in a court, be deemed to be commercially reasonable but that same setback could be different in another municipality, or a commercially reasonable setback could be different in another municipality.
Gregory: …Simply because of the opinion of the court? Or because of the…
Ireland: …Because of the entire situation. I mean, everything that will be considered to go into that calculation for that particular area. That’s why HB40 did not specify any kind of a statewide standard because it can vary.
Gregory: One of the other things imposed upon us by the state … that it’s commercially reasonable by a reputable and prudent operator. Is that an acknowledgement that all operators aren’t necessarily prudent and good players?
Ireland: (Defers answer to attorneys. Note: he is paid by operators regardless of their standard for operating.)
joking about deflection and laughter
Hawkins: I’m trying to understand what you just said. If it’s found that Fort Worth’s [ordinance] is commercially viable, and let’s say Denton had the exact same ordinance, are you saying that it could possibly be found that it wouldn’t be found commercially viable here just because it’s in a different place?
Ireland: Well there again, I would defer to the attorneys on that because, but that’s my understanding, is that it’s not necessarily one standard that would apply in south Texas or in Denton or anywhere else. It’s the total circumstance of a situation is going to have to be considered and that’s going to be litigated or adjudicated or whatever the proper term is.
Hawkins: I don’t know how that makes sense to me. Thank you though.
Briggs: My sentiments, exactly. I don’t really understand that too much. So you’re saying that most of these definitions are more than likely going to have to be determined in court. And that could mean something different for each city. Is that what I’m hearing?
Ireland: That’s my understanding but, again, I think that entire argument is the legal side of it and [Uh oh! I think I’ve really stepped in it here!] I’m really not qualified to …
This is a multiple choice test on the intent of HB40:
What is the true intent of HB40?
- HB40 because patchwork quilt fracking ordinances are too hard.
- HB40 because we demand patchwork quilt fracking ordinances.
- HB40 because we will frack where and how we want.
- HB40 because we will sue you for everything.
- HB40 because trial attorneys need more work.
- HB40 because all of the above.