Regulatory Reform

Lawsuits Filed in Response to Fracking Ban in Denton, TX

In what many pundits have described as a “wave election,” many candidates who embraced and campaigned on the principles of free-markets and limited government saw great success this past Tuesday. In contrast, however, the citizens of Denton, TX voted via referendum to ban the oil and gas drilling technique commonly known as hydraulic fracturing.

Proponents of the ban cited contamination of groundwater and seismic activity associated with the disposal of wastewater as reasons to support the ban. Interestingly, there has never before been a proven documented case of hydraulic fracturing contaminating aquifers and the precise relationship between injection wells and seismic activity remains inconclusive.

This ban is significant since Denton sits atop the Barnett shale play, the third largest onshore natural gas producing field in the U.S.

As expected, lawsuits have already been filed challenging the legitimacy of the ban. One Wednesday, just one day after the vote, the Texas Oil & Gas Association (TXOGA) sued the city of Denton on the grounds that “a ban on hydraulic fracturing is inconsistent with state law and therefore violates the Texas constitution.” Likewise, the Texas General Land Office, which regulates mineral development on state lands, also filed a complaint in state court, calling the ban “arbitrary, capricious and unreasonable.”

The benefits of hydraulic fracturing are well-documented and vast. With the development and advancement of drilling technologies—including hydraulic fracturing—the U.S. in 2013 produced over 2.7 billion barrels of oil, the most produced domestically since 1989. Similarly, in 2013 the U.S. produced record levels of natural gas—24.3 trillion cubic feet (Tcf) of domestic dry production. North Dakota’s oil boom is credited to these new drilling technologies and has led to increases in rates of employment, higher wages, and, just recently, free college educations.

It will be interesting to monitor these lawsuits as well as any potential activity, if any at all, that the Texas Legislature may take next year in response to the ban.

In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and…

+ Regulatory Reform In Depth