Texas Outlaws Local Fracking Bans

The Texas legislature recently wrapped up its 84th session, and the oil and gas industry won a major victory during the session—the passage and signing of a bill that effectively nullifies Denton’s recent fracking ban and forbids other municipalities from enacting similar regulations. On May 18, Governor Greg Abbott signed into law House Bill 40, which preempts local regulations of a wide variety of oil and gas drilling activities.

Energy companies and industry groups supported the bill while environmentalists and several local officials and municipal organizations opposed it. Energy groups felt that the bill was necessary to prevent inconsistent oil and gas regulations throughout the state. Opponents of the bill claim that the law will erode the authority of cities to regulate local health and safety. They also claim that the definition of “oil and gas operations” is too broad and will cause confusion as to what local governments can regulate.

The Texas House modified the bill somewhat to address some criticisms from the Texas Municipal League. Legislators added language listing areas that cities could still regulate, such as fire and emergency response, traffic, light, and noise, as long as the rules are “commercially reasonable.” The bill also allows cities to enact setbacks between drilling sites and certain buildings. The bill also contains a safe-harbor provision, which protects cities from legal challenges if their ordinances have not triggered litigation in the past five years.

The law is a direct response to the city of Denton’s recently passed fracking ban and immediately went into effect, as it was passed by more than a two-thirds majority in both chambers. Shortly after the bill was passed, Vantage Energy notified the city that it intended to resume its fracking operations within the city limits and has since done so. City officials have not challenged the new law in court, but the city council has demurred on completely removing the regulation from the city’s ordinances to give city officials and activists more time to research the city’s ability to modify the regulation to incorporate the new law’s restrictions.

Keywords: energy litigation, Texas, fracking, Texas Denton, preemption, municipal regulations, Abbott, Vantage Energy

_{Courtney Scobie is with Ajamie LLP in Houston, Texas.}

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