The issue of urban drilling has become a political maelstrom tearing at the fiber of our peaceful community. The Town of Flower Mound, known to have one of the strictest oil and gas drilling ordinances in north Texas, recently supported a decision by its Oil and Gas Board of Appeals, standing by the Board’s ruling regarding the denial of fifteen variances requested by Red Oak Gas to permit a drill site on the property now known as the “River Walk.” The decision was unanimous and the Board will defend its decision in Denton County court. The Town’s decision on this particular application does not seem to be arbitrary given that as of May, the Town has already provided drilling permits for 21 wells on 9 separate drill site locations, most in less densely populated areas.

Passions related to urban drilling in Flower Mound run deep on both sides, from the “just say no to drilling” campaign, to mineral owners who feel overly restrictive town ordinances are denying them their rights, which they say constitute an undue taking of their property. Conversely, citizens who have invested significantly in their residences feel that urban drilling without tight restrictions threaten the value of their properties and the beauty of their environment. This may sound intransigent; but ask yourself how much you would pay for a home with a four acre production facility 300 feet from your backyard? There is no doubt that the atmosphere in Flower Mound is supercharged and battle lines are being drawn around this topic. Obviously, the issues are complex, both politically and legally. Texas was built on oil and gas; consequently there is strong case law that supports the right to extract minerals. To the confusion of many, the law is consistent in holding the mineral estate as the dominant estate, and as such, it takes precedent over the surface estate.
   

Many legal and energy experts opine that several area cities could face costly litigation if they don't reconsider their seemingly recalcitrant setback rules separating homes from gas wells. Those supporting 1,000 foot setbacks cite noise reduction, safety, property values and a pristine Flower Mound as reason enough to prevent the proliferation of “sub-division” wells. The genesis of any such litigation would be in the undue taking of property, in this case the minerals, which could result in millions of dollars of potential liability related to the value of the unrecoverable minerals. It stands to reason that if an individual owns property that has significant value and a company has invested hundreds of thousands of dollars for the right to capture that value, that city policies rendering both the minerals and the investment valueless will be challenged.
    

Many other cities who have been confronted with this possibility have either backed off stricter restrictions or opted to adopt less stringent rules to avoid potential litigation. With Red Oak’s filing of their appeal, Flower Mound has become the recipient of the first salvo in what could be a long and arduous battle. Remember, this is not a lawsuit; it is an appeal of a governmental ruling. Existing legal precedent notwithstanding, there is not necessarily a clear cut favorite in this matter. In this case, Red Oak has been denied fifteen separate variances related to its drilling application. If the Town’s decision was only related to offsets, it might struggle to prevail since it has received letters of support for the drilling application from the offset land owners. However, the denied variances include issues related to the floodplain, environmentally sensitive water issues, protecting upland and riparian habitat, tank battery location and right-of-way issues. Even if the Town loses in regard to the setback issues, it is possible that it could still prevail in blocking the application by being successful on only one of these remaining issues.
    

If litigation evolves from urban drilling, it will not turn on the angst of those town citizens who are generally in opposition. The issues are specific and differ for each location and those immediately affected by such drilling will have the loudest voice in the courtroom. As the possible number of drillable locations diminish and as companies struggle to find a drill site that can meet town restrictions, the outcry from both sides of this issue will grow louder. So far the town and its Council have chosen to stick to their collective guns, choosing to fight each battle on its merits and resisting efforts to loosen restrictions, to the dismay of many mineral owners. It is a very interesting and sensitive balancing act with which our town leaders have been burdened. Both sides have very legitimate arguments regarding the dispute over urban drilling and something to lose depending on its outcome. It seems almost certain that with swords drawn and deep lines etched in the dirt on both sides, that in the foreseeable future the debate will rage, the newspapers will continue to follow the issue and many of us may be jamming courtrooms to discover the definitive answer.
Chuck Elsey is the senior member of Elsey & Elsey, a general practice law firm located in Flower Mound.