Preserve Local Control of Land Use Planning and Zoning
Support legislation that would clarify that the state’s vested rights law does not apply to
subsurface mineral development as it relates to permits issued by the municipality for oil and
gas development activities.
ISSUE
Denton, Texas is a home rule city acting under its Charter adopted by the electorate pursuant
to Article XI, Section 5 of the Texas Constitution and Chapter 9 of the Local Government
Code. Denton, along with other cities in North Texas, identified that its gas well regulations
did not fully implement the goals of allowing gas well operations while protecting the
public’s health, safety and general welfare.
The rising demand for clean alternative fuel sources, and the advent of new drilling and
production technologies, including hydraulic fracturing, has encouraged mineral
development, including in the Barnett Shale gas play, a massive reservoir of natural gas
underlying a substantial portion of southern Oklahoma and North Central Texas. The most
active production zone of the Barnett Shale is situated under the highly urbanized Denton,
Tarrant, and Wise counties.
The City of Denton has witnessed significant conflict between increased drilling and urban
expansion. The conflict between land use issues, that of gas well operations and that of
surface owners seeking the peaceful and quiet enjoyment of their property, has become
commonplace. Potential harmful impacts of gas well drilling and production within
municipal boundaries fall heavily on neighborhoods and properties adjacent to gas well
drilling and production operations, and the balancing of interests of the mineral owners and
operators as against quality of life issues for those citizens working and living near drilling
sites and production infrastructure has proven challenging. By way of example, during our
ordinance review, citizens presented compelling evidence of the impacts of gas well drilling
in an urban environment, to include noise, dust, odor, light pollution, vibrations, fire safety,
visual aesthetics, surface property value impacts, negative changes to neighborhoods,
incompatibility of land uses, impacts to infrastructure related to public health and welfare
such as water wells, concerns over setbacks, landscaping, public notice, signage, issues
related to operating hours, operator insurance issues, road impacts, and other quality of life
issues. Additionally, gas well flaring, gas well completion techniques, closed loop systems,
vapor recovery units, water and soil impacts, other environmental impairment issues,
methods of plugging and abandoning wells, pits involved in gas well operations, emergency
operation plans, and other operational aspects of extraction of minerals trigger public health,
safety, property preservation, and order and security of the City of Denton and its inhabitants.
Gas well operations have the propensity for polluting or degrading streams, drains, recharge
features, or tributaries that may constitute or recharge the City of Denton’s drinking water
supply.
Notwithstanding these concerns, the City encountered substantial resistance from local
operators on its ability to prevent or moderate potentially harmful impacts of gas well drilling
and production activities on adjacent and proximate land uses.
PROBLEM
The concept of vested rights, in particular, is argued to restrict a City’s authority to address
impacts of gas well drilling: vested rights, regulatory takings, and preemption. This paper is
offered in support of the City’s Resolution asking the Texas Legislature to clarify the state’s
vested rights law.
“Vested rights” claims are grounded in Tex. Loc. Gov’t Code, Chapter 245, as interpreted by
the case of Harper Park Two, LP v. Austin, 359 S.W. 3d 247 (Tex.App.-Austin 2011). Under
Chapter 245, once an application for the first permit required to complete a property
development “project” is filed with the municipality that regulates the use of the property, the
municipality’s regulations applicable to the project are frozen in their then-current state and
the city is prohibited from enforcing subsequent regulatory changes to further restrict the
property’s use. However, these vested rights protections are lost to the extent that the
development being pursued constitutes a new or different “project” from the one for which
the initial permit was sought. A “project” is defined in Chapter 245 is an “endeavor” that
requires a series of permits to complete. It is the filing of the first permit in the series of
required permits that triggers the vested rights protection under the statute.
In the context of commercial or residential development, the application of the vested rights
law is somewhat problematic, as illustrated by Harper Park Two. In the context of gas well
drilling, it is even more difficult to apply. For example, assume that a gas well operator filed
a gas well plat in 1992, identifying one well and a series of tank batteries on the plat. In
2007, the operator desires to drill five more wells, one of which is on the pad site of the
original well, and three of which are on a pad site 5,000 feet distant from the original site.
What is the project? Is it only that pad site identified on the original plat? Is it one well, or
two wells, or five wells? Is the project the complete exhaustion of the mineral stores of the
mineral lease, no matter the necessity of burdening the surface estate with additional wells
and gas infrastructure? In an urban environment with underlying gas plays, the answer to
these questions determines the health and safety and the quality of life of a municipality’s
citizens.
SOLUTION
It is Denton’s position that the Texas Legislature never intended the vested rights analysis to
apply to subsurface mineral development and that legislative clarification is need in this
respect.