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August 25, 2011 MinutesCity of Denton City Council Minutes August 25, 2011 Hold a discussion and receive staff and public input regarding gas well drilling and production generally, and also including such activities in the City of Denton; consider regulations in effect in Denton for gas well drilling and production (Phase I); and consider proposed regulations for gas well drilling and production in Denton (Phase II). ➢ Welcome and Introductions ➢ General Drilling and Production Overview ➢ Recent Activities Within the City of Denton ➢ Phase I Amendments ➢ Phase II Topics of Discussion ➢ Public Input The attached document represents the minutes as taken by the stenographer present at the meeting. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PHASE II GAS WELL REGULATIONS THURSDAY, AUGUUST 25, 2011 6:30 P.M. - 8:30 P.M. CIVIC CENTER 321 EAST MCKINNEY STREET PHASE II GAS WELL REGULATIONS 1 AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 (P R 0 C E E D I N G S) MS. KAMP: My name is Pete Kamp, I'm On behalf of everyone on the City Committee members, thank you so much for agreeing to serve and for putting your time and dedication into this project. Most especially, thank you citizens for being here. This is what the public process is all about. We want and need your input. I'm going to -- let's see, we have some other City Council members here. If you would please stand up so I can see you. We have James King over here, Dalton Gregory, Kevin Roden, and Jimmy Engelbrecht back in the back. Okay. And that does make a quorum. This is a posted meeting. And what we have to do, according to state law and to open meetings, is what I'm going to do is I'm going to call a City Council meeting to order. And during this entire process, according to state law, council members may not speak. We cannot ask questions. We cannot answer questions. Again, tonight is all about the citizens and this committee. If we do lose a quorum during this time, it could be in ten minutes or it could be in three hours, if everyone's up to that, then I will come up or one of my colleagues will come up and adjourn the PHASE II GAS WELL REGULATIONS 2 AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 meeting. That doesn't mean that it adjourns the meeting for you guys or the committee members. Okay. So I just wanted to make that clear. Again, thank you so much. I know seeing these faces I don't need to encourage a lot of you to speak up because you do and we appreciate it very much. I heard that snicker over here. Please do ask questions, listen, take notes, and I think that this will be a terrific process that we can get through by listening to you guys. And I don't have my glasses on either, of course. I determine that a quorum is present. The City Council of the City of Denton, Texas hereby convenes its meeting this Thursday, August 25, 2011 at 6:37 at the Civic Center, 321 East McKinney Street in Denton, Texas. Again, thank you so much, guys. This is our Assistant City Manager Fred Green. MR. GREEN: Welcome to this evening. We appreciate you coming and we appreciate those of you in the back. If you could work your way to the front a little bit where you can certainly hear and see this live presentation, we would appreciate it. It might prove to your benefit. Let me just cover some things that you probably need to know. We have water back in PHASE II GAS WELL REGULATIONS 3 AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 the back here, cool water. If you need water, you want to get a drink, just go back there and grab a bottle of water. We'll give it to you and you can drink it during the proceedings. We also have our restroom right back over here, and we have a Coke machine and a drinking fountain back over here. So that's the location. There's nothing behind me that will offer you any comfort, but certainly those areas can give you what you may need when you need it. Let me talk a little bit about what we're here for. And in a moment we are going to turn this over to the Gas Well Task Force for you to provide input, but there are some things that I think you need to know. I want you to remember that you've been given a white card. Those of you that do not have a white card, please raise your hand and we'll see to it that you get one. This is your sign-in sheet with your name and address and your e-mail address. It gives us the opportunity to contact you and let you know what's going on in the process as we develop this Phase II Gas Well Ordinance. So please, please fill out a white card. Now, you'll see on the card that there's a place where you can write, I want to speak or no I do PHASE II GAS WELL REGULATIONS � AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 not want to speak. If you wish to speak, write your comments down that you want to talk about on the front or the back. There is plenty of room. And when you're ready to speak, when you feel you want to talk, raise your hand and hold your card in the air. A staff inember will come by and pick it up and take your card to the chairperson who will call your name. Now, she may have 10 or 12 cards in her hands when that happens. So that then gives us the opportunity to not forget you and keep you in the mix for speaking to the Task Force. If you do not wish to speak, if you don't want to speak at all but you do want to make comments in writing, please feel free to do so. But leave the card with us. So that we can gather those cards and give them to the Task Force so that they can review them. So either way, we are going to get your comments. Either at the microphone, or if you do not wish to speak, in writing. If you do wish to speak, and they call your name and because you turned in your card, please use this microphone in the center aisle and speak clearly. Because we have a court reporter over here who is recording every word. The minutes are being taken so that we can see what was said and know everything that PHASE II GAS WELL REGULATIONS 5 AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 transferred in this meeting between you and the Task Force. So, consequently, please speak clearly into the microphone. That will help us greatly in keeping track of what was said. We are asking you also to keep your comments to three minutes. And we have a timekeeper who will let us know by raising his hand that you have exceeded three minutes, and at that point, you will need to close it down. That will give time for everyone to speak. So that kind of covers the white card. But remember, if you wish to speak, just hold your white card up and a member of the staff will pick it up and bring it to the front for you. We are going to -- and, incidentally, I want to introduce some other members of the staff that are here tonight also. You've seen the council members. There are some key staff that are here. Our City Manager, George Campbell, is sitting over here. Planning Director Mark Cunningham over here. Darren Groth, our new Gas Well Administrator. Dr. Kenny Banks in the environmental department is over here. And John Cabrales, our Public Information Officer, is here, also. So they are here to observe and to take notes and keep track of tonight's proceedings. I would like to spend just a minute PHASE II GAS WELL REGULATIONS � AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 telling you what we're here for. The Gas Well Ordinance is a complicated issue, and the council chose to approach a new Gas Well Ordinance in a very deliberate way. That is to divide it up into two parts. Part one, or what we call Phase I, of the ordinance is rather simple. It covers things such as permits, fees, and inspections. It also established the new Gas Well Inspection Division that is lead by Darren Groth. And his people are responsible for investigating all complaints and for doing inspections of the gas wells. They will also be responsible for the inspection and the review of Phase II ordinances. They will be responsible for carrying out all of the responsibilities of the ordinance that is finally adopted. What we wanted to do though is that we felt that we needed three things. One, we needed your input to make this work. We need citizen input for the complicated or technical aspects of Phase II. We wanted your input. We also needed some broad-based expertise to help us develop that ordinance. That broad-based expertise should know -- come from a lot of disciplines that can coach us and give us input to make Phase II a viable ordinance. That's the reason for the Gas Well Task Force that you have before you. PHASE II GAS WELL REGULATIONS 7 AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 They were selected by input from city staff and city council who vetted names that they all had and finally came up with these three that everyone felt had a broad expertise and knowledge that can tell us, the staff, how this Gas Well Ordinance should really look and what should be included in that Gas Well Ordinance. We feel that their work is really important because they're like consultants to us. Fundamentally, what they are going to do is take your input, combine it with their expertise as well as the legal issues involved as well as operator issues as well as state laws. All of which have to be vetted through this process. And they will provide for the city staff what they believe to be the best approach and the best elements to include in Phase II. The staff will put that together in the proper form, vet it through legal, and present it to the City Council. The City Council will then take that ordinance and it will have public hearings on the ordinance for you again to provide input. Now, this is not the only meeting the Task Force is going to have. They're going to have several public meetings to allow public input. But, PHASE II GAS WELL REGULATIONS : AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 remember, this is not a question and answer meeting, and it is not a meeting whereby you can -- it's not a public hearing. It doesn't fit that criteria. What it really is is a meeting where you provide them with input and that's what they're seeking. They're looking for your input, your ideas, your concerns to include in this ordinance. Getting that will enable them to provide us, the staff, with the proper kind of ordinance that we can proceed forward with. So consequently, you're here and they're here, and we're ready to begin. Because tonight is the beginning of Phase II, creation of the Gas Well Ordinance, and it begins with you. We appreciate you being here. We appreciate your input. As I said, please keep your input to three minutes. That will enable everyone else to talk. Please be sure that you fill out your white card. That will enable us to have all of your input if you choose not to speak. If you choose to speak, we will have your card up here anyway. Now, the agenda for tonight looks something like this. We finished the welcome and introductions. We're going to get into general drilling and production overview that Darren Groth is going to present that to you, activities within the City of Denton that are currently underway, Phase I amendments, PHASE II GAS WELL REGULATIONS � AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 10 Phase II topics of discussion, and then public input. That's going to be the process that we're going to follow this evening. We have this room until 8:30 tonight so we're going to have plenty of time to hear you. If we run out of time for you to speak, be sure you write your comments down and give them to us so that we may have them for record. Thank you very much for coming. I will turn this over now to Vicki Oppenheim who will conduct the meeting. She is the chair of the Task Force tonight and we look forward to hearing from you. Thank you again. MS. OPPENHEIM: Thank you, Assistant City Manager and the staff and the City Council. I'm Vicki Oppenheim. I'm very pleased to be here tonight. This is an issue that's very important to me living in the City of Denton. I've lived here since 1995 and I'm very excited to see so many people here interested in this topic. And we are going to do everything we can to get your citizen input into the process. I just wanted to read a little quote to you. "Unless someone like you cares a whole awful lot, nothing is going to get better, it's not" Dr. Seuss. And though it's a very simple idea, it's really true. The crux of this process, the most important part of PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 11 this process, more than me sitting up here, any of us sitting up here, is you being in this audience and giving your input and telling us what you think is important for this process. I just want to say that we are all very committed to it. We are not being paid to be here. We are volunteering our time and we are willing to put in the hard work it will take to revise the ordinance. At this time, we'd just like to introduce the three of us and give you a little idea of who we are and why we are here. I've already talked about the fact that I've been here since 1995. I'm an urban planner and I happened to be working in Denton at the time when gas drilling was just starting in the Barnett Shale. Back in 2001 I worked for an engineering firm and we had gas companies coming in the door every day saying, we want gas well plats we want gas permits for Denton. And none of us had really heard about gas drilling in this area before. In fact, it was just recently discovered that there was the Barnett Shale here and that there were pockets of natural gas. Then I was also told, well, there's this new process. It's called hydraulic fracturing with horizontal drilling. And so a boom started of drilling here. And over the years the issue has evolved. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12 At that time, I thought about certain issues that might occur, spilling out grime water, perhaps visual impacts, tree removal. But over the years, the complexity of this issue has emerged. And now we know there are possible air quality issues and other issues. So the reason I'm here is because I still think it's an important issue for the city. I think there are great things going on in the City of Denton. I'm very excited about what we're doing here in the city, and I really want to be part of this process. Now, I'll turn the mike to Tom LaPoint. MR. LAPOINT: Thanks, Vicki. My name is Tom LaPoint. I'm a professor of biology, specifically in environmental sciences at University of North Texas. My wife and I have lived in Denton since 2000, and my specific background in environmental science is in aquatic toxicology. Basically, I study where chemicals go in aquatic systems and what they do to organisms once those chemicals get there. So I've had an interest in water quality, but also in water quantity. And one of the reasons I'm interested and very pleased to be on this task force is questions about what happens to the water and the larger issues of water PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 13 use in hydraulic fracturing, particularly. So thank you and I'll leave it at that. MS. OPPENHEIM: And now John Sigmund. MR. SIEGMUND: Yes. I need to start by saying that many of you know that I have a long history in the petroleum industry. And I need to point out that I'm now retired and my interest is in quality of life and not with the oil companies. But having said that, I probably need to go briefly over the things that I have done in the oil business and other activities that I've been in. I was born and bred in Texas. Actually, I grew up on agricultural area in Gainesville. I attended the University of Oklahoma. I am a petroleum engineer. I was an officer in the U.S. Navy. I went back to graduate school in Oklahoma and was hired by Exxon to go to Peru. And that was a great time. I was just out of school, and really enjoyed that. But I came back and wanted to come back to the States. I came back to do production research in Tulsa. From there they asked me to go to Libya on a one-year-long assignment. I spent 13 years in Libya for Exxon. I then decided I wanted to do something else. And I left Libya and with the idea of operating a PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 14 commercial ranch that I owned on the Red River. And I did that for a while. But then a friend of mine asked me to be general manager of the Santa Fe operation in Nigeria. And I did that up -- for a short period of time because it was too interesting to turn down. But I really wanted to run my ranch. So I did that. I ran the ranch for about three years. I got that out of my system, and I went back -- kind of missed overseas. I went back overseas with Roy Huffington out of Houston and Indonesia. And that was a great time. We loved Indonesia. But I decided that I wanted to come back to the States. And I did that and organized Sigmund Inc. Which was an oil field operation in Gainesville; Sherman; Marlow, Oklahoma; and Greenville, Arkansas. That was a bad time to get into that kind of business. That was in early 1981. You probably remember what the interest rates were at that time. Anyway, I did that for about five years and finally decided to shut it down. And I then became branch manager of A.G. Edwards Wachovia -- what became Wachovia and finally Wells Fargo & Company. I retired from the financial business in December of 2010. I'm retired. I live in Southridge with my wife, Joy. And as I said at the beginning, my PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 15 interest right now is not with the oil companies. My interest is quality of life, and that's probably the same thing a lot of you are interested in and particularly water pollution and so forth. And, again, I very much encourage your input to help us to do the best possible job in getting a very usable organization set up to control and really improve this area. Thank you very much. MS. OPPENHEIM: Thank you, John. I also want to just before we get started, talk about the meeting that Tom and I attended on Monday formed by the Denton Stakeholder Drilling Advisory Group. Now, that's not a group officially affiliated with us, but I just want to point out, it's very important that citizens find all different ways they can in getting informed and educated on this issue. Two different speakers talked about their experiences on similar panels and task force. One was from Flower Mound and one was from Ft. Worth, and there were two important themes that emerged. One was that, as I said, very important that residents become informed and educated on the issue so they can participate. And, secondly, it's a very complex issue. There are many legal, environmental, economic issues to consider. And not everyone's going PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16 to get what they want. That was something they pointed out. But if the process is good. And if we can get everybody involved, in the end everyone will have an ordinance that they like. So we're hoping we can have the best possible process and have a variety of needs for input. Right now the City of Denton is developing social media, and there's also going to be a page on the web site that is -- the web site posted up on the screen there. There's going to be a form where you can contact us. And this information will go directly to us on any issue that you may have with gas drilling or any other question that you may have. And we will do our best to get back to you. We also plan on having numerous other meetings. We plan on creating a survey based on what we find out tonight. We plan on doing anything we can to get your input. So we are open to ideas. And please send us your ideas. Now I will turn the mike over to Darren who will go over some other city information. Thank you. MR. GROTH: Thank you, Vicki. I just want to quickly -- as we pointed out on the agenda that Fred showed you initially, right now we're just going to go over some general drilling production. Kind of give you an overview of why you guys are here and what Phase II PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 17 is for. It's really for the municipal regulation part of it. And why do we want a municipal regulation? What's the purpose of the ordinance? Oil and gas drilling, it's kind of unique land juice. And a lot of municipalities, as Vicki mentioned, back in 2000 may not have had that ordinance. So as you look to see what kind of regulations you want to have in place, you're going to adopt those rules. And through time they may need to be amended because these industrial sites they undergo ongoing maintenance and well activity that lasts for, you know, quite some time. So that need to tweak that ordinance is there. Once you do, what kind of aspects do you want to have in mind? So you want to look at that ordinance as far as what it's going to control. And that ordinance really is designed to protect the health, safety, and general welfare of the public and the quality of the environment. So getting that balance in regulation is what the purpose of that is. And we're kicking that off with this meeting. And we can encourage the orderly production of available mineral resources. This next slide kind of shows -- a little fuzzy, I guess. The Denton Municipal Airport is on the right side of that photo. And you can see as you go PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 And if you look at it, really just to give you an overview, you break it down into four major processes. There's a lot more and there's a lot that goes into it. But if you look at those four, it's broken down really into exploration, well development, production, and then site abandonment. So going through each one of these, you'll see at first you go through the exploration. That's when an operator will try to identify what's there. What the mineral assets that they may have under the ground. And the photo shows a vibrator truck doing a seismic survey. That's probably a term you've heard. It's a way for an underground map to be created. That's the exploration part of it. Once you know what you are drilling for, you'll get into the development stage and that involves the construction of one or more wells. What you will do is prep the site. That will clear and grade. You'll build access roads and post the signs that you need. Then you go into drilling and also fracing of the site. I got a couple of photos here that kind of give you an PHASE II GAS WELL REGULATIONS : AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 19 example of what I'm talking about. This photo will show a clear and graded site before they really start. It's a level pad out there. That's a cleared site. You have to build an access road. You have to get to the site. You need to post some signs there, making sure everybody is aware of what's happening behind that access road. And then moving and drilling. You'll see this drilling rig. It's probably the most visible sign you'll have at the location. It will be up there for a couple of weeks, maybe two to three weeks, depending on how long and what they are doing. But that's probably what you'll notice the most. Then they move to fracing. You'll see a photo of fracing activity going on at the site. And afterwards, if you drill, it may start producing. And that, as you can see on the slide there, is the process of extracting the gas or hydrocarbons. And then you want to make sure that it's separated and there is ability to bring that gas to market so you can sell it. And there is additional pertinences required to do that. So you will see the well head located on that site. You'll see storage tanks, the separators that are removing water and separating the gas. You can see some additional PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 20 pertinences. There may be a lift compressor, some meters, and other physical equipment on that site. But once the production life ends, you can move to the site abandonment phase. And that's the plugging of the wells and restoring of the site. So after the usefulness is over, there are some requirements that the operator has to go through. Currently in our ordinance we have some provisions. Those four listed there say that the well must be abandoned in accordance with the Railroad Commission rules. No structures can be built over the well after completed. P&A, that's plugged and abandoned. The operator must clean that site and repair the property. And then there's a security instrument that remains in place along with the insurance. Those are the four stages that you really go through. And now I'm going to turn that over to Mark Cunningham. He's the Director of Planning. He'll go over the next phase of the agenda. MR. CUNNINGHAM: Good evening. As Vicki stated earlier, that back in the early days of 2000 or so, drilling activities really picked up within the D/FW area. And in 2002 the City Council adopted a Denton PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 21 Development Code which included Subchapter 22 which is the city's drilling production ordinances. In 2002 when this code was adopted, my understanding is that Denton actually was one of the few cities in the area that actually had gas well drilling production regulations. From there on, other cities adopted their own regulations. But, as you know, as Vicki stated, things evolved and we became outdated with our activities and so forth. So in order to keep pace, in 2004 and 2005 Denton City Council did some updates. And our most resent set of updates were done in 2010. And those are the updates that are referred to as the Phase I updates. In addition to the Phase I updates, we also created the Gas Well Inspections Division. And Darren Groth is our Gas Well Administrator. In the back of the room, in the very back, we have Chad Howard, who's our senior gas well inspector. And we also have Raymond Hammon, who's a gas well administrative assistant. We also have Jack Molder, who is a gas well inspector who just is not with us tonight. So we do have an active gas well inspections team here going out and doing inspections. They're reviewing sites. They're reviewing site pads PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 22 and development plans and conducting site inspections and issuing violation notices and citations whenever such violations or citations are observed in the field. At the bottom of the screen, you can see the web site. Please visit the web side. There's a lot of information on the web site. When we submitted our Phase II amendments last year -- I'll just go through very briefly what the Phase II amendments included. They included fee assessments, which are on our web site, currently posted. We lowered the permissible noise level from 90 decibels to 75 decibels. We require gas well production -- gas well development plats within ETJ. And we also require that before you can do a gas well -- get a gas well permit, you have to do -- submit for review and approval a gas well site plan for activities within the cities. We reduced the life of the gas well plat from two years to one year. We shrunk the life of the gas well permit from one year to six months. You only have six months before the permits will expire unless you start -- unless you commence drilling activities. We also increased our separation of distance setbacks from 500 feet to 1,000 feet from protected uses, such as residential, churches, libraries, and hospitals, and those types of uses. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 23 Other types of uses that are considered non-protected uses like industrial and commercial uses can come within -- a gas well can come within 500 feet of those uses. If property owners all agree and all sign a waiver, you can bring a well up to 250 feet of a protected use. We limited the flaring activities between the hours of 7:00 a.m. and 7:00 p.m. except in the case of emergencies. We limit the height of storage tanks as well as on site activity equipment to eight feet. And during our gas -- Phase I amendments there was some very complex and technical issues that we just didn't -- felt that we could do justice to in a short time. The goal of the Phase I amendments was to try to do some quick quality of life fixes. So we deferred those Phase II, more technical complex issues, to now. As we started -- as we were going through the Phase I issues, these are the questions or these are the topics, rather, that we received -- that we collected from the citizens. Included: Vapor recovery or air quality morning; environmentally-friendly completion; freshwater well pollution; prohibition of city water for fracing; development permit process for seismic testing and address explosive testing; use of recycled waters during fracing; and also to only allow PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 24 chemical-free fracing; establish prohibitions against gas well flaring; the use of close loop systems only; and require operators to produce timelines for operational events and to mail -- to let affected parties know by way of some type of mailing notification. There is also the express that there should be prohibition for compressor stations, collection stations, tank farms, land farms within the city limits. We want to continue on the Phase II portion of our Gas Well Drilling Production Ordinance. And as Fred said earlier, this is the -- this is the first official step, so to say, where we are asking you to provide your input. Provide your comments. To provide any information that you think is relevant to our Gas Well Task Force so that they can begin to get information and frame creative framework of what the Phase II ordinances will be. So at this time I will go ahead and turn back the meeting to our Gas Well Task Force just to listen to your input and comments. As Fred said earlier, if you have a card and if you do desire to speak, if you would raise your card, myself or another staff inember will come. We'll collect those cards. We'll give the cards to the Task Force, and they will PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 25 call your name so that you can also provide your input. Again, we ask that in order to allow courtesy and opportunity for everyone to speak, we do desire you to speak, and we ask that to the best of your ability you limit your comments to approximately three minutes. And, again, we thank you for coming. And we ask, please, even if you don't want to speak and you do have a comment, that you submit your card and return the card back to us. We want to be able to use the contact information on that card to provide you with information regardless of whether you speak or not. Again, this is our initial process to get your information and establish a dialogue and to hopefully create a gas well drilling production set of regulations that takes into consideration your concerns, your inputs, and your comments. MS. OPPENHEIM: Thank you very much. I have quite a stack of cards here. So I want to make sure that everybody gets a chance to speak. So I'm just going to call the names and do the best I can to read the names. And I'll just start with Will Wooten. And you can come up to the mike, please. MR. WOOTEN: Hey, how are you doing today? I live on 1508 Broadway, so I live pretty close to the PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Razor Ranch gas well that was put in a couple of years ago. I was actually at public meetings about that way back when the City Council voted to let it go in right next to a hospital. Which I think is the reason why we have these ordinances coming now. Which is a little late for the hospital. I really feel like this is not a complicated issue. I was at that meeting on Monday or Tuesday also and, yes, the ordinance is very complicated. But that's just if you allow the gas wells to come in the first place. I don't think we should allow them to come into the city in the first place. I don't want this meeting to go without someone saying the word "climate change." This is a big issue, and I don't really expect the City to do much about it. But someone has to got to say that we need to do something about climate change. And we might as well start here and not wait for the Feds to do anything. I want you to do your best to raise the insurance that -- I think Flower Mound raised it from 1 million to 25 million. I think that's really important. Raise the environmental fees as much as possible, and, basically, get every dollar out of them that you possibly can to make it uneconomic for them to PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 27 come to the city. And another thing is, they said at that meeting a couple days ago that 80 percent of the wells don't even produce anything. So why are we letting them come in the first place if 80 percent of the wells don't produce and all we get stuck with is a piece of land that we can't use ever again? The waivers to 250 feet; you should try to just get rid of that and get all the way to stay at 1,000. Because. It's not just the people that live in that area. It's the people that live in the entire city that are important. So they're just getting bribed anyway. They are getting money from the company to let them -- and they're saying, sign this waiver and we'll give you a bunch of money. But then the gas well doesn't produce anything. And the last thing I'll say is that banning the city water use, that's just putting the water problem on someone else. MS. OPPENHEIM: Okay. Thank you very much. James Wall. JAMES WALL: How are you doing? I'm James Wall. I'm from Flower Mound, Texas. And we went through this for the last couple of years in Flower Mound. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 : As a concerned citizen, I got involved with gas drilling and ordinances and things like that. But like every other town in North Texas, we were a little bit unaware with gas drilling and we got behind the ball, actually. Right now we've got more wells in Flower Mound than I'd like to see. But that's just what happened to us. You're starting from a place where you Back when we started, there wasn't much What we knew when we first began was what the industry had told us and it was all, you know, flowers and roses. At any rate, a couple of things that we have learned -- what we were doing in Flower Mound ordinance -- we've got a pretty strong ordinance now in our town. But one of the things that I picked up on, you know, fairly recently is the fact that the approval process that we go through. Right now we have administrative approval where, you know, if they meet criteria on a petition, they just get approved for well sites. And then once the site gets approved, they can pretty much expand that site without too much other review. So when you start PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 29 same pad. And nobody knew that was coming. So one of the ways to kind of control that is through both zoning and special use permits. If you're changing zoning in a particular area, like -- these are all very industrial sites, by the way. They're not rural. So when you put one of these things in and approve the permit for it, there should be, like, a special use permit or SUP. So that that can also entail public hearings like this one where people actually can come and give some input on a change that's going to be made at one of these sites. Even after the permit has been approved, if there's going to be a change where they're going to add other wells to that particular pad, someone in the community should have a say-so in that. And so I think if you can change your ordinance or amend it to include special use permits for doing that, that would be a good thing. And just a comment, too, I saw the map that he showed with all the well sites -- MS. OPPENHEIM: Time is up, but. MR. WALL: I saw that he showed all of the well sites next to the airport here in Denton. And you see how it's all just pocketed out there. And it's just PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 30 such a shame because you'll never be able to build a neighborhood there or a shopping mall or any expansion at all because you cannot build on pipelines or wells. MS. OPPENHEIM: Thank you very much for coming tonight. Hatice Salih. MS. SALIH: A huge thank you for everyone including the Task Force and the City of Denton staff for allowing us to do this tonight. I would like to speak to the issues that we all seem to be interested in. And that is public health, public welfare, and the environment. The good news is that we are not the only kids on the block who are doing this. And, in fact, I would like to speak to some of the ordinances that Flower Mound has already passed. They're considered to be the gold standard and should be included in our new drilling ordinances. I only wish to touch upon bonds, letters of credit, insurance, environmental pollution reliability coverage. And I will read a little bit about the newest one. The bond: The bond shall be executed by a reliable bonding or insurance institution authorized to do business in Texas acceptable to the town. The bond shall become effective on or before the date the oil, gas, or combined well permit is issued and shall remain PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 31 in force and effect for at least a period of six months until the expiration of the permit term or until the well is plugged and abandoned and the site is restored, whichever occurs first. Letter of credit: The letter of credit shall be issued by a reliable bank or other financial institution acceptable by the town authorized to do business in Texas and it shall be effective on or before the date the permit is issued. Insurance: In addition to the bond or letter of credit required pursuant to this article, the operator shall carry a policy or policies of insurance issued by an insurance company or companies authorized to do business in Texas. The most important one, please. Environmental pollution reliability coverage: Operator shall purchase and maintain in force with the duration of the oil, gas, combined well permit insurance for environmental pollution reliability applicable to bodily injury, property damage including loss of use of damaged property or of property that has not been fiscally injured or destroyed, clean-up costs, and defense including costs and expenses incurred in investigation, defense, or settlement of claims all in connection with the loss arising from the insured site. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 32 Coverage shall be maintained in an amount of at least $10 million per loss with an annual aggregate of at least $75 million. And the last thing I would like to say is, we need to be mindful of the fact that we're all mortal and we need to remember that we have to leave that planet as intact as we can for the future generations. Thank you. MS. OPPENHEIM: Thank you very much. We now have a letter that was presented to us by Representative Myra Crownover, and Tom will read that as part of this record. MR. LAPOINT: Thank you, Vicki. The Honorable Myra Crownover sent this today and requested it be read into the record. So we want to make sure to do that so I'll take the time to if you don't mind. It's dated August 25, 2011. "As the Vice Chair for the Texas House of Representative Energy Resources Committee, I've seen firsthand what can be accomplished when government officials, affected citizen, and industry work together to solve problems. Two years ago I authored and passed House Bill 2259 to protect landowner rights. House Bill 2259 requires oil and gas companies to clean up surface equipment and plug older, inactive wells. Also, during the most resent legislative PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 33 session, I joint authored House Bill 3328 that requires gas drilling operators to disclose the chemicals they use in the fracing process. House Bill 3328 makes Texas the first state in the nation to require disclosure and is now a model for the nation. The passage of House Bills 2259 and 3328 would not have happened without years of hard work and collaboration between all affected parties. In fact, I know neither piece of legislation would not have passed if all parties had not worked together. In that spirit, I would like to commend the City of Denton for forming this Task Force and I would encourage everyone involved to find ways to work together to ensure that any action taken by the City protects the interests of all affected parties. Sincerely, Myra Crownover." MS. OPPENHEIM: Thank you very much. Next is Benjamin Kessler. MR. KESSLER: Hey everyone. My name is Ben. I'm a student at UNT. I study philosophy and economics. So there's only a few students here, but I'm going to go ahead and speak for all students and say that we're not really into this kind of, like, going to a public meeting and talking about, like, this ordinance and that ordinance and this whole, like, huge list of PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 34 regulations. And, you know, we're in our 20's. And it's kind of -- it's kind of almost a game to us that you can't win. And what we want is no fracing anywhere in Denton or really anywhere close to any of us. But we see how this works. And so if you can make it so that fracing is, basically, impossible through this big list of regulations and make it expensive in all sorts of various ways. Make them buy insurance, increase the setbacks, a mountain of permits. All of that is great and, you know, you don't have to say "ban fracing" in there, but that's what we want. So, again, you may not see us come to these meetings all the time and engage in the nitty-gritty details of this kind of process. But I can say that we're going to fight this. And any fracing that does end up happening -- because we know if the regulations are good enough, people are going to frac. We're going to get sick. It's going to destroy the land. And it's going to be -- it's going to be all fraced. In a short amount of time, it's going to affect this county for a very long time. And we're going to resist. And I just want everybody to know that and, hopefully, that will help you plan your -- the PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 35 regulations that we are trying to do here. And make it easier for all of us and our children and their children and so forth. Thanks. MS. OPPENHEIM: Thank vou verv much. Phyllis Wolper. MS. WOLPER: Thank you. I'm Phyllis Wolper. And I'm a citizen of Denton and I own my own business here in Denton. I'm a Realtor, so I'm very concerned about property values. It is the subject that I always speak about. Basically, when you have a well, a fracing site, that's the last use of that site for, basically, anything. It's ruined for anything else. The city can collect a lot of money off of it while it's happening, but afterwards where is it going to get the tax dollars. And in light of this causing losses in property values, is this city prepared for reduced property tax base, possible cost of clean up of multiple super fund sites near our schools, churches, parks, and hospitals, and the cost of replacing the huge amount of fresh water that's lost in the fracing process? Basically, is gas drilling best and highest use of this land? And, frankly, I don't think so. But I'm a realist. I know this is going to happen. So what I would like to ask is that all well sites be considered PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 36 heavy industry and only permitted by special use permits. And keep decisions in the hands of the Planning and Zoning Commission. Require recycling of all the fraced water and not allow these companies to use our fresh water supplies. We're having a drought and we do this every few years. So water is very, very important. And have all chemicals -- or require that all chemicals used must be open for inspection as part of the permit. And if any fracing company claims a trade secret chemical that they -- excuse me, they have to go to court and declare -- have a court judgment. Because we need to know what's in there. If those chemicals land near my house and there's two or three other different fracing companies or drilling companies around me, how am I going to know which one polluted my property unless we know exactly what's in there. So I want to also ask that they be required to put tracing chemicals in there so that we can prove who did what. That they must be required to state everything that's in there. Thank you. MS. OPPENHEIM: Thank you. Steven Forde. MR. FORDE: Thank you for inviting us. I would agree with most everything that everyone has said PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 37 here today. The list that you first put up there of proposed Phase II regulations, I would endorse all of those including the need for zoning. And we should control this by zoning. Apparently, that's a way of doing it. But I attended, along with some other people that I see here, the forum a couple of days ago that Professor Adam Briggle put on that was very informative. I think the City should retain James Bradbury as legal council. He was there. He had very useful information about what the cities legally can and cannot do. But my main point is the industry is going to threaten the City with lawsuits on the basis of taking us. That is, the regulations are too strict. They will say that you're, basically, robbing us of the use of our property. And, actually, Representative Crownover's reference, the property rights was the rights of the industry as well as the surrounding homeowners. I think though that given what Phyllis Wolper just told us -- the point is that their activity on this well site is a massive taking of the property values of everyone around it. So I think, basically, what the City needs to be prepared to do is to push back on these takings argument because a well is a massive taking, too. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 It reduces property values drastically and permanently in the immediate vicinity. It makes that site unusable for anything, I guess, as our friend from Flower Mound told us. There will never be a house there. There will never be a shopping mall, if you want a shopping mall. There will never be a park there. So, essentially, they can sell the land or whatever happens to it and, you know, it's more than just a matter of them being deprived of their right to use the land. They're taking that out of circulation permanently. I don't think that the surrounding houses and homeowners should be able to sign a waiver, someone said this earlier. Because, again, that means they're signing away not just their rights, but the rights of any future owner of that home. We don't allow those people to instal substandard electrical work or plumbing, even though it would harm no one but them. Because it's the future owner that might get stuck with this massive problem. We should not allow them to waive the length restrictions either. I mean, the point is that this kind of activity has future consequences that all amount to takings. So what I'm doing is sort of proposing arguments that the City can use to push back against PHASE II GAS WELL REGULATIONS : AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 39 this takings thing. And there's also a big problem that these well sites are drilled by company number one. By the time it's up and running, it's been sold to company number two. By the time you have any problems, it's, you know, five companies down the road. Are they liable? They are all going to argue that, you know, it's not us. I don't know how you solve that problem, but that does need to be solved. MS. OPPENHEIM: Thank you very much for your comments. Sue Smith. MS. SMITH: Sue Smith. I live at 1819 Crescent. I like to breathe fresh air and I would like to drink clean water. With fracing process, I don't think that's possible. I would like to encourage you to press the City Council to lobby the state legislature. I think that's where the main problem lies. When this first came up, everything was raised -- well it's a state law. Oh, it's a state law. We can't do anything; it's a state law. So if you can lobby our legislature, that's pie in the sky, I realize. But try to impress upon them the importance of what this stuff is doing to us. In the meantime, please make the regulations as strong as the law will allow considering PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .� the health of us, our parents, our children, and our grandchildren. Think of your mother. Would you want this well in your yard? MS. OPPENHEIM: Thank you. Ben Claybour. MR. CLAYBOUR: Yes. My name is Ben Claybour. And I would just like to encourage the Task Force or the Council to strike some sort of balance between the needs of the citizens and the needs of gas companies and mineral owners. I think in city government or -- there's other aspects where you don't want to be known as the city that is discouraging business. We can argue that Wal-Mart is bad for city business or bad for local communities. But, on the other hand, I don't want the City to try and keep Wal-Mart out of my community. I don't think that's appropriate use of city government. And the landowners -- Mr. Forde was discussing the landowners and the takings. The gas companies are not the ones that are -- they're in the middle. The people that are losing their property rights are the mineral owners like the Razors. It's not -- the gas companies don't really have a call in that. The gas companies are not the ones that benefit one way or the other. They don't own the PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 41 property. So this talk about takings and stuff like that, that's between the mineral owners, which is the Razors and the Robsons. And you have to balance these needs between the other things. I don't think most of the people that I work with have a problem with most of these regulations. But we need -- we don't need to have a constant revision of the rules. We don't need to have this SUP for every well site. We need to come to some sort of conclusion. And then the companies can make rational decisions about whether or not they want to do business here. MS. OPPENHEIM: Okay, thank you. Devin Taylor. MR. TAYLOR: Devin Taylor, 2710 Eagle Drive. I just want to reiterate what's already been said and add a little bit to the zoning requirement. Gas production is a use of land that is wholly inappropriate to be near residential or commercial uses. It is an industrial use. It permanently destroys the land in a way that it can no longer be used for residential or commercial use. And it needs to be buffered from residential or commercial uses. It is industrial areas. It is not inappropriate, but it needs to be rezoned in order to use those land uses. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 42 Currently, there are gas wells in Denton in rural zoning districts and in neighborhood, residential zoning districts. And if you look at a zoning map, there will be this perfect 500-foot square of residential NR-2, NR-3 land that, but that will never be residential. And it's deceptive and it's surrounded by neighborhoods and this is -- this could be handled by zoning law. By making a requirement that gas wells only be placed in industrial zoning. If you want to put a gas well off Teasley, rezone the gas pad site to industrial. Create proper buffering for the surrounding land uses. Because even 30, 40, 50 years from now, that site will never be appropriate for neighborhood or residential use. Thank you. MS. OPPENHEIM: Thank you very much. Joyce Poole. MS. POOLE: Thank you for hearing us this evening. We think it's important to be participants in this process. I am going to be one of the people who have been the living horror story of the oil drilling. Because prior to all of your current regulations, or the ones developed, they developed a well and wells behind my home. And I live on North Bonnie Brea. There are currently three wells there. There are -- luckily, we PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 43 got 600 feet between my house and the well site. In the process -- and this was in 1997 when they first started drilling. And about 2000 they were drilling another well. And they had the open pit with all the chemicals and dumping stuff in it. We had a terrible rain whatever year that was. I apologize I didn't research that tonight. But I can go back and get those records. The well -- flushing of all of that well drilling, backfilling, chemicals, everything. The wall broke on the dam or on the well. It flushed through my property and my neighbor's property, who was an organic farmer. She can no longer be an organic farmer. We had white/gray sludge in our lawns and in her cow pastures and it just was a mess. It ruined tires on heavy equipment that cost them a lot of money to replace. So we have lived through the horrors of prior good zoning. I would say that a minimum of 1,000 feet between residence, churches, schools, etc., as you have it, but nothing closer than 500 feet. I don't care where it is, nowhere. We have air issues that we suffered through because they flared that well. They also -- in the process of drilling, there is a vapor that comes off of PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .. the compressors, what have you. And on my roof to this day is a black film from when the wind changes direction there is a black film that comes in and lands on your roof. It looks like Chicago. And I used to live in Chicago, so I know what that looks like. The things that I would recommend from my past experience would be that closed loop system and no aboveground storage wells. Because we have wells back there that are about 25 -- or storage tanks that are about 25 feet high or higher. Three of them on that hill. I do have a question that I am not sure about the answer. Everyone has said that no future development will be on areas where there has been a well or if there are gas lines running under it. Well, with all of the horizontal drilling that's going to be interesting to track all of that since no one, including the Railroad Commission, even knows where all of those underground lines are. The Cole Ranch that is west of town I understand is just ant hilled with underground gas lines. And if they cannot drill on that, I would like to know. There have been four -- MS. OPPENHEIM: Time is up. MS. POOLE: -- four owners since then of my well. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 45 MS. OPPENHEIM: Okay. Thank you very much. Cathy McMullen. MS. MCMULLEN: Just for the record, I'm calling for a moratorium, again, until we can get some more substantial ordinances in place. We need the gas well inspectors to monitor wells and drilling sites in the City. They should be permitted to enter into facilities to instantaneous check readings for hydrocarbons. And the gas well inspectors should inspect all the wells within the City every six months. The operator must install and maintain equipment on-site to collect and recycle all flow-back and produced water so the amount of wastewater injected in disposal wells is reduced. When a water shortage has been declared, it shall be unlawful to use water from the City's water system for oil and gas drilling operations and production. That's a Colleyville ordinance. No water well permit shall be approved in the City for water for oil and gas well drilling. That's Colleyville. Pennsylvania recycles 100 percent of its drilling water related to multiple episodes of contamination. All operators must use a closed loop systems with no waste within the city limits; South Lake; Highland Village, and Bedford. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .� A zero emission plan, acceptable to the City, specifying the operators plan for operating without any substantial release of hydrocarbons in each phase of the drilling operation, fracturing, completion, and production. That's Lewisville. Vapor recovery used and seal them in a container with labels clearly indicating the site, date, specific well bore, perforation section, and the fracture stage. The sample must be deposited with the oil and gas inspector or a certified laboratory acceptable to the City; Lewisville. The operator may be exempted from this requirement if they agree to use a non-toxic tracer compound such a boron carbide or similar non-naturally occurring chemical or isotope in amounts suitable for detection should fluids escape the target formation. Use light colored paint for tank batteries or other equipment. All tank batteries and equipment cannot be taller than eight feet, and they should be 1,500 feet from public parks, religious institutions, hospitals, and schools. The following should not be allowed in the PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 47 treatment facilities. Electric motors -- electric prime motors shall be used for all purposes of pumping wells. No electric power shall be generated on location, Flower Mound. Require approval for a pipeline summary during the permitting process. Existing businesses, homes, and infrastructure should be given primary consideration to avoid the future destruction of property related to eminent domain. Require the gas companies to place a notice in the local newspaper 72 hours prior to each drilling event. That's Grapevine, Colleyville, Southlake. Require a written timeline account of all planned operational events associated with the permit. Must be updated weekly and thoroughly describing each event. Screening structures shall be installed completely around the well site and all fencing will be sufficient to screen from view the structures sought to be screened. It shall be installed within 30 days after production. It shall be -- and the need to -- the operators really need to open up an escrow account and put that in an escrow account so that we can access that so that we're not in that cycle they are at Rayzor Ranch where they've gone and left us down there with nothing. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .; The escrow function shall be equal to the total cost of purchasing and planting vegetation to include irrigation systems. Require special use permit for any gas well within the city limits. No drilling within a 1,000 feet of a floodplain. The setback of 1,500 feet for residences, churches, hospitals, nursing homes, concentrated gathering of residence to include apartment complexes and shopping centers. This is a Flower Mound ordinance and a suggestion from a high density population lawyer from Fort Worth. Blowout prevention equipment must be used on all well sites. No flaring or venting of natural gas wells within the city limits; Flower Mound. The drilling companies must hire an independent cleanup company of the City's choosing if a spill occurs, and we must require green completions; Flower Mound. MS. OPPENHEIM: Thank you very much. Ed Soph. MR. SOPH: Thank you for your time and work in this issue. I would ask that you consider using an established regulatory policy called the precautionary principal as a framework for your deliberations and decisions. A very brief definition of the principal is called the wingspread statement, which was written in PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .. 1998. It is, "When an activity such as gas well drilling, processing, and transporting raises threats of harm to human health or the environment, precautionary measures, such as ordinances, should be taken even if some cause and effect relationships are not fully established scientifically." Rather than asking how much harm, pollution, or environmental degradation is acceptable, we must ask how much harm pollution and environmental degradation can be avoided. Drillers must establish that their processes are safe. The burden should not be placed upon the public to prove that the processes are harmful. If the drillers cannot prove, then they must provide safe alternatives to hazardous activities. And if they cannot provide safety alternatives, the activity should be prohibited. And I agree. There should be a moratorium on drilling in Denton until the new ordinances are in place. There are simply too many unknowns at this point to allow it to continue. Thank you. MS. OPPENHEIM: Thank you. Steven Friedson. MR. FRIEDSON: Steven Friedson, 2044 West Oak. I want to encourage the commission, and I want to thank you for your volunteering for this important task, PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 50 to consider requesting from the City, as has been stated before, an environmental lawyer that is an expert in these issues. I think that there -- as far as I know, there is no one on the staff that is specifically trained in this field, in environmental law. I know that you are going to get pushback that's going to say, you can't do it because it's illegal. The state law trumps what goes on in the city. And I think we've had plenty of examples where that is not necessarily true. We heard many things on Monday night about suits that were not successful. So I think we have the opportunity to push back on some of these issues. And I'm hoping that you will agree to do this. I'm also concerned about this issue of taking and working with a good faith partner in negotiations. We heard from I believe the woman that was on the federal bank in Dallas, this recent article in the New York Times that they're claiming, the gas companies, much more gas in -- that they can recover and the money they can make than is a reality. So if they're talking about taking -- if you, like, increase to 1,500 feet or 2,000 feet, I think there's an opportunity to question what kind of taking that actually is. We need in this complex issue somebody that's an expert. Thank you. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 51 MS. OPPENHEIM: Thank you. Gilbert Horton. MR. HORTON: Thank you. My name is Gilbert Horton, and I represent Devon Energy. And I do appreciate your willingness to volunteer with this task going to Phase II. I appreciate the opportunity to speak and present to you this evening. First and foremost, I would like to say that Devon Energy has a record of safe, responsible drilling, fracing, and production activities in the areas that we operate. We are one of the first ones to drill well back about 10, 11 years ago here in the City of Denton. And we are currently the largest producer not only in the Barnett Shale and not only in Denton's regulatory jurisdiction, but also we are the largest taxpayer in Denton County. Economic development of the Barnett Shale and environmental protection are not mutually exclusive. As evidenced that they do and can coexist, one only need to look at the drilling and production of hundreds of gas wells not only by Devon, but others in the City of Denton over the past decade. Denton's current regulations contain numerous safeguards and standard and an extensive permitting process that do protect the citizen's health, PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 52 Devon strongly encourages that the City encourages the Task Force to make no recommendation that would cripple the role that Shale gas development plays in the wellbeing of the citizens of Denton taking into account the economic impact in addition to health, safety, and welfare. Be careful of what your regulations and what overregulation may do to the economic benefits of oil and gas drilling. Now, as the City begins this process, we would like to be engaged with the City, the staff, and the Task Force to help educate when needed, to give recommendations so you can develop recommendations that are adequately balanced and, again, fact based. I think one of the things that you need to do this is to include representatives on your Task Force from other disciplines, including operators who are within Denton or other industry experts such as the Barnett Shale Energy Education Council. These type of PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 53 practices. Again, thank you. MS. OPPENHEIM: Thank you. Riki Young. MS. YOUNG: Good evening, my name is Riki I work for the Federal Emergency Management I was looking at purchasing another house because the City of Denton might take mine because of the expansion of Mayhill Road and they're annexing me. They don't want to provide me water or sewer, but they want to charge me more taxes. I'm going to read something to you guys because I don't want to misquote it. This is a valid study that was recently done by the fire department here in the county. "Recent gas well drilling in the Barnett Shale is believed to be the cause of several minor earthquakes in the North Texas area. The possibility exists for an earthquake caused by gas well drilling operations to trigger an earthquake in the active geological fault located in the area of Lake Ray Roberts. Such an earthquake could result in the catastrophic failure of the dam. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 54 "Should such an event occur, we will not be prepared. Our resources will be overwhelmed. The communities located to the east would be unable to reach Denton due to the loss of Highway 380, Highway 455, the Lake Lewisville toll bridge, and Highway 121. Those cities to the south of Denton would likely be dealing with their own high water issues and be unable to spare additional resources." I find that particularly disturbing. There is documented evidence that this type of drilling causes seismic activity and Lake Ray Roberts -- I mean, it would be awful. I mean, forget about land. I mean, everything would be destroyed. I mean, there would be nothing left. And, Ms. Joyce, I appreciate what you said from your personal experience. You mentioned the horrible rain that we had. I believe that was the federally-declared disaster in May of 2007. Was it earlier than that? Okay. Well, that was the only one that I knew of. The national flood insurance program is -- I mean, I could go on and on and I know I only have three minutes. But what she said struck a cord with me because we need to be prepared for -- mitigation. Let's look at mitigation and planning ahead and making sure that if we do this -- if we continue to do this, that we are PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 55 prepared for the consequences. I recognize that we are one of the only counties in the nation that has jobs and most of them are a result of, guess what? Natural gas drilling, right. Everybody wants money. But I agree with you, sir, quality of life. We have things in this town like the universities that have kept us going long enough. And nobody yet has mentioned the Haliburton loophole. I mean, I know that some people, from the suggestions that you had in your slide, mentioned let's do it chemical free. But they can't disclose the chemicals. I'm hoping that we can set a precedent for the rest of the country when it comes to this and because we're in a unique position. They want our stuff. Because it means money for them and it means money for us, too, because jobs and all that. I recognize that. But, shoot, make them pay for something. Plan. Plan ahead, you know. Let's make it to where we can still live here if something happens. And what she was saying about the water and how it -- and the horizontal fracing, I mean -- Big Spring, Texas, I don't know if you guys are familiar with them. But they ran out of water. Guess what? There was a company that bought water rights and some property in that town and they PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 56 sucked the whole town dry. Now they have no water. You know, just because you have a small piece of land that you designate and say, okay, this is what you can do with it. Tear it up. But they can go right under the whole freaking county. I mean, I don't know how far that stuff goes, right. I know, I think I'm yelling. I'm just -- I'm particularly passionate about this because I believe that water is liquid gold. And our air is gaseous gold. What are we going to do when we ruin it? MS. OPPENHEIM: Thank you very much. Cindy Spoon. MS. SPOON: Okay. Hello. My name is Cindy Spoon. I live on 2228 Lookout Lane, which is about a block away from a gas well on Windsor in between a big park and a church. And I am also here representing the student force in Denton. On August 21st, so four days ago, in the Denton Record-Chronicle they reported that earlier this week air quality monitors detected a carcinogenic chemical EDB -- I believe it's ethylene dibromide -- a carcinogenic being used at fracing sites that has been banned for 25 years. Why is this in our area? It's been banned for 25 years. So I want to ask, why should you trust PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 57 these companies to even abide by regulations? And I want to ask the Task Force to enforce strict enough penalties that if the site is caught, it makes it too risky for these companies to even drill here. I also want to express my, again, disappointment with the City Council for selling out our health like this. That's all. MS. OPPENHEIM: Thank you. Is there anyone else who wants to speak tonight? We don't have any other cards at this point. Thank you, Mari Metzgar. MS. METZGAR: Good evening. And I wanted to thank you -- thank the three of you for serving. This is such an incredibly-important issue. And for you to take your time and devote it to this topic and to helping the citizens of Denton and Denton County. We really appreciate it. One of the things that I think -- everything that's been said about, what should we do during the permit process and what should we do as we let the drillers, if we let them come in, I think those are all important. But what I want to reiterate and one of things that Ms. Joyce said, that the wells near her land have been sold four times. So I think what's really important is that as we go forward in the future that we develop a process to follow the changes in ownership PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 because they have to be held accountable. Whether it be whatever the restrictions, whatever the requirements that we hold forth, the insurance, maintenance, closing down the site. If ten years later and ten owners later, how do we follow that trail? So I think that's very important that we put that process in place. Thank you. MS. OPPENHEIM: Thank you. Is anybody else? MS. GARRETT: Hi. I'm Sarah Garrett. I just wanted to mention a couple of things. One, can we add oil to the ordinance? Right now it says gas. I just wanted to clarify they're also doing oil fracing. So they probably need to have gas on there, as well. Also, there probably needs to be a little bit more depth added to the production side. A lot of times -- well, I mean, Darren can probably speak to this. In my neighborhood they had a pump replaced. And so it would be nice if there was some type of way of tracking what type of activity happens. I think some people have mentioned that, but just for the benefit of the neighbors to know. Other thing, I guess I'd like to just reiterate what everybody said about bonding. That's probably really important to have a high enough market rate bond for the type of activity that's happening, a PHASE II GAS WELL REGULATIONS : AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 59 good security. And I look forward to contributing my written comments later. MS. OPPENHEIM: Thank you. Is there anybody else? Martin Garza. MR. GARZA: My name is Martin Garza from Dallas, Texas. I'm an attorney and I've been working on these ordinances since the first ordinances were drafted in 2002. Actually, I started working on them in 2001 on behalf of the industry. And I've seen how these ordinances have developed and changed over time. I've also monitored and worked on ordinances around North Texas over the past ten years. And I just wanted to highlight some things that I've heard this evening. One of things Mr. Green talked about was having the legal issues and operator issues and state law addressed. And I would encourage the City to add involvement within the Task Force to flush out legal issues, operator involvement, and the state law. We've heard some references to state law tonight, the legal issues. As an attorney and somebody who has been following this, they're really important. This is an ordinance. This is not architectural guidelines or engineering plans. It's legal issues. It's an ordinance. It's something that needs to be enforced. PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .1 And those that are being imposed upon need to understand what exactly is being said. So I would encourage the involvement -- if the City is going to have its attorneys involved, getting a history of the attorneys involved, as well. Because misunderstandings do lead to lawsuits, do lead to takings claims. And one clarification on takings, it was mentioned tonight that the idea of takings of other -- someone puts a well in and takes property values from others to press that takings claim. Takings, as one of examples brought to light, is a road being expanded taking the house next to it. That the City would have to reimburse. Takings is a governmental concept. I can't privately take something away and call that a takings claim. And notions like this need to be dispelled because when it all comes down to it, this is an ordinance and legal issue. So we need to be very clear about what's being proposed. Another comment tonight was about the eight-foot storage tank. That was something that was put into the ordinance and you have to understand what unintended consequences are. If I take a, let's say, a 20-foot storage tank and you require me to put an 8-foot storage tank, there's still going to be an amount of PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 61 water going there. All you've done is made me have to put, say, three storage tanks there. Is that really want you want? Three storage tanks and not just one storage tank. You have to understand what the industry does and what the industry needs to be able to -- to allow for the development. One of the slides put up earlier shows two things; health, safety, and welfare. Item number two was to encourage orderly development. Encourage orderly development not discourage it. And there needs to be a balance. There needs to be a cost/benefit analysis, realistic regulations, and realistically allowing the orderly development of the mineral resources here. So I hope that the City welcomes all views. But in doing that, it really needs to be all views. Legal issues, the operator issues, state law issues. And not such a narrow focus like I've heard this evening. MS. OPPENHEIM: Thank you. Is there anyone else? Rhona Love. MS. LOVE: Like others, I want to thank the three of you for serving in this capacity. I'm certainly no expert in this. But Ben, the student, I was very much taken by what he had to stay. You're in your 20's saying that this whole process doesn't mean a lot. I'm in my 60's. I had my career in academia. I PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 62 know what this is about. I don't like it anymore than you do. But it's critical. I'm sure you appreciate that. So we heard a lot about technicalities, but I want to say this one thing. What we really need, I believe, is city councilors who are going to have the courage and the integrity and the information to do the job we elected them to do, which is to protect interests of the citizens of Denton. And I imagine that after hearing this tonight, they know a number of us are watching and we're going to continue to watch. And I hope that they do the kind of job that would make us want to vote for them again. Thank you. MS. OPPENHEIM: Thank you very much. MR. ENGELBRECHT: I just wanted to say we've lost a quorum and I'm hereby adjourning the City Council meeting, not this the informal part. But the formal portion of having a City Council meeting is hereby adjourned. Thank you. You can continue. MS. OPPENHEIM: John iverson. MR. IVERSON: I'm John iverson, and I live at 804 Sandpiper not too far from a producing gas well down on the south end of town. There have been an awful lot of good ideas offered tonight. And what studying I've been looking at recently on gas wells, it sounds PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 63 like there is some technology that is new, more expensive, but could be brought into play that would help control any emissions that may occur either in the development process or production process. But I think one of the things that I haven't heard is that we passed ordinance and we have a well inspector. Those results of inspections need to be made -- I would implore the Task Force to put the requirement in that those inspection results be made public, published in the newspaper on a weekly basis. Put them on the City's web site so that the citizens can look at the ordinance that's been passed and say, is it working? As well as the City officials. And I appreciate the opportunity to speak to this Task Force and thank you. MS. OPPENHEIM: Thank you. Is there anyone else who wants to speak tonight? MS. WOLPER: I'm stealing my husband's time. I just want to again thank you for serving on this committee. I know how much dedication all of you have to it. And I do believe you will do what is best for this citizens of Denton. But what I want to say to the City Council, the Mayor, and to everyone here: Which one of you would drop a gas well within only 1,000 feet of your own home? PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .� Your child's school? Next to your church? Who is willing to do that? Unless you are willing to have it in your backyard against you and dealing with the consequences of it, then I urge everyone to do their utmost to make sure this doesn't happen to any citizen in Denton. Thank you. MS. OPPENHEIM: Thank you. Is there anyone else? MS. POOLE: Again, I'm Joyce Poole. I didn't have time to say this last little point. But I noticed in some of your presentation prior to the meeting was that you require upon a closedown of a well that the site be returned to original state or so on. But on an active drilling portion I live in where the wells are -- and, yes, the pad site, in itself, is kept. But the area where they had had the pit. And dug up the well or, you know, dug out the pit and after it collapsed, they just took all of the rocks and topsoil and left the topsoil at the bottom and left the rocks on top. And so it needs to go back to having the topsoil recommendation deep enough that will allow for -- in my case, it's a farmer that has that land. He can't put a crop on there again because it will tear up all of his equipment. Thank you. MS. OPPENHEIM: Thank you. Is there anyone PHASE II GAS WELL REGULATIONS AUGUST 25, 2011 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 65 else? MS. SALIH: I don't think anyone has spoken to this. I'm not only concerned about the quality of our ordinances, but I think that everyone needs to give equal time to how they are going to enforce these ordinances. Are we going to be in the position to? Are we going to be willing to? And I think that it's really important if we look very carefully at the letter of credit, the bond, and the environmental insurance. I think if we ask these production companies to be responsible and accountable, I think we'll be in a better position to enforce our ordinances, as well. And thank you to the three of you. MS. OPPENHEIM: Thank you. Is there anyone else who wants to speak? Well, I guess that's it for tonight. It's not the end of the process, by any means. We've just started. And so please look out for the page on the web site. Contact us. We are open to ideas and suggestions of how to go forward. And we'll be letting you know about another meeting probably in about another month or so to give you an update and get more input. Thank you. (End of proceedings.) PHASE II GAS WELL REGULATIONS AUGUST 25, 2011