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As Cities Get Testy, Regulators Mull Oversight of Urban Drilling

The Railroad Commission wants to beef up oversight of oil and gas wells in cities, and ease tension between the industry and the growing number of urban Texans living next to well pads, compressor stations and disposal wells.

A well pad is flanked by Fort Worth's skyline on Sept. 27, 2013.

Turns out, oil and gas drilling makes some city slickers cranky. 

The Railroad Commission of Texas is mulling how to beef up oversight of oil and gas operations in cities, aiming to ease tension between the industry and growing numbers of urban Texans who find themselves living next to well pads, compressor stations and disposal wells.

“In current times, we are looking at a state in which drilling does not necessarily occur in less populated, rural areas, as it once did years ago,” Christi Craddick, the commission’s chairman, said last week. “We have heard the concerns expressed by those living in urban areas where drilling is occurring.”

The statements came after Craddick instructed Milton Rister, the agency’s executive director, to “explore the potential need for an emphasis on inspections in highly populated, urban areas throughout Texas,” in a report due in January.

Precisely what a new policy would look like is unclear, but Lauren Hamner, Craddick’s spokeswoman, said “nothing is off the table,” and the agency will reevaluate how it handles a range of activities, including oil and gas production and the disposal of oilfield waste.

The move drew mixed responses from those who have voiced concerns about the industry’s effects on quality of life.    

Oil and gas companies face increased pushback as the industry's footprint extends into cities – particularly those sitting atop the Barnett Shale, which stretches some 5,000 square miles across North Texas.

The biggest battleground has been in Denton, which last month voted to become the state’s first city to ban hydraulic fracturing, or fracking. But concerns about noise, traffic and the environment have swirled in other city halls. In the past three years, Dallas and suburbs Southlake and Flower Mound have enacted polarizing ordinances that the industry considers de facto bans on drilling. And some residents of Mansfield, emboldened by Denton’s move, are calling for similar restrictions. 

Meanwhile, other towns including Azle, Irving and Reno have raised concerns about a spate of unexpected earthquakes that have shaken the region – a phenomenon thought to be linked to nearby disposal wells, deep-underground resting places for liquid oilfield waste. In the past year, the Railroad Commission has hired a seismologist and approved requirements that companies submit more information before drilling disposal wells.

“I’m grateful that they’re acting, and if it took us spearheading the charge, I guess that’s what it took,” Lynda Stokes, the mayor of tiny Reno, said of the agency’s latest move. “Bless their hearts. What a job that they have, because they really don’t know what to do.”

The leader of Denton’s grassroots movement against fracking, however, doesn’t put much stock in Craddick’s announcement.

“To me, it was just kind of a statement to placate us,” said Cathy McMullen, president of Frack Free Denton. “I think a lot of Texans have lost faith that any state agency is going to help us.”

McMullen said she doubts inspections would do much good, unless the agency also started levying more penalties on operators who break the rules. What’s more, she said, Denton’s biggest beefs with the industry concern air quality – an area over which the Railroad Commission has no jurisdiction. Those duties fall to the Texas Commission on Environmental Quality.

Though North Texas has hosted the prominent battles between operators and local activists, the Railroad Commission says its initiative – however it might look – would extend across the state. 

“It’s unfortunate that any Texas community does not feel safe in their own community,” Hamner said. “For Denton or any other to suspect we don’t care about that is a very serious, unfortunate situation.”

State lawmakers will also jump into the fray in the coming session, including some who want to discourage cities from throwing up roadblocks to drilling.

Rep. Phil King, R-Weatherford, on Wednesday filed the session's first pair of bills addressing the issue. One would require cities to get the attorney general's blessing before enacting or repealing any ordinance by voter initiative or referendum, the tool Denton activists used to push that city's fracking ban. Another would require cities that tighten drilling regulations to reimburse the state for any lost tax revenue. 

“Everybody needs certainty and clarity," he said. "So we don’t have a city-by-city fight."

The debate comes as producers face pressure on another front – the market. Crude prices have tumbled more than 40 percent since June, spurring concerns about idled rigs and plummeting profits in the coming months.

Alana Rocha contributed to this report. 

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