Texas City's Fracking Ban Will Likely Cost Taxpayers Millions
Tuesday, December 16, 2014
December 16, 2014
AUSTIN, Texas -- The decision by voters in the North Texas oil and gas city of Denton to pass an ordinance that would ban fracking could cost their city millions of dollars a year, with several lawsuits already filed and more potentially on the way.
Hydraulic fracturing, or "fracking," is a process by which rock is fractured by injecting hydraulically pressurized sand and other chemicals suspended in water into the deep-rock formations where resources like natural gas and petroleum are found. The technique has been around since the 1950s, but recent advances have made it possible to access resources that were previously not commercially viable.
Fracking has led to a massive increase in Texas' energy production, with the state contributing heavily to the United States becoming the world's largest natural gas producer in 2010 and even beating Saudi Arabia to become the world's largest producer of petroleum this year. According a report released this week by the Congressional Budget Office, fracking has increased the United States' gross domestic product, reduced energy prices for consumers, and increased tax revenues. The budget surpluses that Texas has enjoyed the past few years are due in no small part to the exponential increases in tax revenues from the state's energy sector. However, fracking is not without its critics and opponents cite concerns over the chemicals used in the process, the noise generated, and other environmental issues.
The City of Denton is located on the Barnett Shale, one of the largest natural gas fields in the country, and city records show that there are currently 277 active wells within the city limits. The city had already enacted setback requirements for wells that amounted to a "de facto ban" on fracking, as described by the Energy in Depth blog. Denton became the first Texas city to officially ban fracking after voters approved an ordinance on the November 4th ballot, as Breitbart Texas reported. According to the Fort Worth Star-Telegram, both Texas Land Commissioner Jerry Patterson and members of the Railroad Commission have told city leaders that this ban is not valid under Texas law. Railroad Commission Chairwoman Christi Craddick also publicly voiced her opposition to the ban at an event sponsored by the Texas Tribune in November, vowing that her agency would continue to issue permits. "I believe it's my job to give permits, not Denton's," said Craddick. "We’re going to continue permitting up there because that’s my job."
Richard Burleson of Burleson LLP wrote an op-ed for the Houston Chronicle back in August that outlined some of the detrimental financial effects that a fracking ban could have on Denton:
"A recent report from The Perryman Group estimates that if fracking were barred, it could potentially cost Denton $251.4 million in economic activity and 2,000 jobs over the next 10 years; slash tax revenues by $5.1 million to the city; and reduce revenues to the Denton Independent School District by $4.6 million. That money would have to be made up somewhere in order to maintain essential city services. The guess here is that it would ultimately have to come out of residents' pockets."