2019-035 Active and Non-Active Gas WellsDate: March 1, 2019 Report No. 2019-035
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Provide information about the number of active and non-active gas wells in the City of Denton,
and information on setback distances.
DISCUSSION:
During the February 5, 2019 Council Meeting, Mayor Watts asked for information concerning a
survey of active and abandoned wells within Denton, and information to facilitate the discussion
on setback distances. For the purposes of this report, the term “abandoned” is synonymous with
the term “plugged” to distinguish wells that obtained a permit by were not drilled, wells that did
not produce any significant yields and were not developed, and similar situations that did not result
in an actual developed well. Table 1 summarizes the current status of gas wells in the City of
Denton. “High” priority wells are those that are <300 feet from sensitive uses, “Moderate” priority
are those that are >300 to 1000 feet, and “Low” priority are those that are greater than 1,000 feet.
There are 290 active gas wells in the City of Denton, and 25 plugged wells. Of the 290 active
wells, 60(18%) are high priority, 124 (45%) are moderate priority, and 106 (37%) are low priority.
Table 1. Current status of gas wells in the City of Denton (count and percentages of total
active wells).
High Moderate Low Total
Active 60 (18%) 124 (45%) 106 (37%) 290
Plugged n/a n/a n/a 25
Setback distances
Setback distances were discussed with Council during a work session on September 11, 2018.
This information included information from published literature, City of Denton staff information,
and legal perspectives on gas well setbacks. The following information is an excerpt from that
Agenda Information Sheet provided in this work session.
Setback distances for municipalities in Tarrant and Denton County
In 2017, Fry, Brannstrom, and Sakinejad published an article entitled “Suburbanization and shale
gas wells: Patterns, planning perspectives, and reverse setback policies” in Landscape and Urban
Planning 168:9-21. The article summarizes their research on setbacks and reverse setbacks in
Tarrant and Denton County for 48 municipalities. Figure 1. below summarizes the setback and
reverse setback requirements from their research.
Date: March 1, 2019 Report No. 2019-035
Figure 1. Reverse setback distances (gray bars) and setback distances (black bars) in
municipalities in Denton and Tarrant counties (as of February 2015).
From Fry et. al., (2017). Suburbanization and shale gas wells: Patterns, planning perspectives, and reverse setback
policies. Landscape and Urban Planning 168:9–21.
Of the 48 municipalities surveyed by Fry et al., 9 use reverse setbacks to regulate how close new
residential homes can be built to existing gas well facilities. Five municipalities (approximately
56%) of the reverse setback distances are 250 feet or less, and four municipalities (approximately
44%) have distances that are greater than 250 feet. However, it is important to note that direct
comparisons of setback distances can be complicated by the methods used to measure the distance.
Some municipalities, for example, measure the setback distances from the wellhead to the wall of
the protected structure on the adjacent land. Others may measure from the nearest piece of
equipment to the wall of the structure, and others may measure from the site boundary of the gas
well site. Denton currently measures from the site boundary of the gas well site, which is the most
conservative approach. Additional distance is provided for the reverse setback in cases where a
plat for a proposed residential subdivision exists, as the measurement in this case will be from the
boundary of the gas well development site plan to the closest lot line of any undeveloped lot.
Taking this measurement method into consideration, Denton has one of the more stringent reverse
setbacks in the area for this particular type of reverse setback. Denton is also one of the two
municipalities in the survey that require developers to note the location of existing wells within a
specified distance on the deed, plat, or site plan.
In terms of standard setback distances, 30 (approximately 62.5%) of the 48 municipalities surveyed
have setback distances that are 600 feet or less, while 18 (37.5%) have setback distances that are
greater than 600 feet. Of those that are great than 600 feet, the most common setback distances
is 1,000 feet. As outlined above, the method of measuring the setback distance can have an
influence on the true separation distance.
Date: March 1, 2019 Report No. 2019-035
City of Denton Staff conducted a survey of setback distances and were able to collect information
from 38 municipalities in the Dallas Fort-Worth metroplex. On a per city basis, 27 (approximately
81%) of the municipalities in the staff survey have setback distances that are 600 feet or less, while
11 (approximately 19%) have setbacks greater than 600 feet. The most common setback distance
for cities in the “greater than 600 feet” category is 1,000 feet (73%), and one city within this group
has a setback distance exceeding 1,000 feet (Flower Mound; 1,500 feet).
Legal perspectives on gas well setbacks
The first draft of the proposed Gas Well Ordinance amendments was revealed before the Texas
Legislature passed House Bill 40 (“HB 40”). HB 40 was adopted in reaction to the Frack Ban
Ordinance that Denton citizens approved at a November, 2014 election. The Legislature reacted
to the Frack Ban Ordinance by adopting HB 40. HB 40 was the Legislature’s pronouncement that
the State of Texas, and not Texas cities, has exclusive jurisdiction over the regulation of oil and
gas operations. Most of the regulatory authority exercised by Texas cities, including Denton, was
stripped away. Despite this, the Texas Municipal League was able to successfully lobby the
Legislature to provide cities with limited regulatory authority, provided that such city regulations
meet a strict four-part test. In summary, (1) municipalities can only regulate surface activities of
oil and gas operations; (2) regulations must not effectively prohibit any operations; (3) regulations
must not be otherwise preempted by state or federal law; and (4) regulations must be
“commercially reasonable”.
City Staff, together with in-house City attorneys and outside legal counsel, compared the initial
draft of the Gas Well Ordinance amendments with HB 40’s four-part test. Many ordinance
provisions were recommended for deletion or revision to satisfy HB 40. One of the provisions
were the setbacks to Protected Uses that new and existing oil and gas well pad sites were required
to meet. HB 40 allows a city to impose “reasonable setbacks”, but this term is not defined in the
bill. During one of the 2015 Legislative Committee meetings concerning HB 40, there was one
legislator from a West Texas city who believed that 1,000 feet was a reasonable setback for cities
to use. Aside from this Legislator’s statement, no one else proffered a reasonable setback distance.
City Staff and the City’s attorneys analyzed a 1,000-foot setback based on the number and location
of existing gas well pad sites, together with the residential housing growth trends within the City.
Then they analyzed the proposed 1,000-foot setback against HB 40’s four-part test. Finally, they
analyzed the legal risk of a federal and state constitutional “Takings Claim”. The recommendation
was for new gas well pad sites to meet a 1,000-foot setback from Protected Uses. Existing gas
well pad sites were recommended to meet lower setbacks distances for each new well they drilled
on the existing site. A majority of Council agreed with these recommendations and adopted them
as part of the 2015 Gas Well Ordinance amendments.
Reverse setbacks only apply to Protected Uses when they encroach upon existing gas well pad
sites. In the last few years, there has been very little drilling activity within the City, but much
growth in new residential subdivision construction. In several cases, these new residential
subdivisions have encroached upon existing gas well pad sites. HB 40 did not address residential
subdivisions encroaching upon existing gas well pad sites. Thus, some Denton citizens called for
increasing the current reverse setback distance to 1,000 feet or greater.
Date: March 1, 2019 Report No. 2019-035
Even though HB 40 did not address, and does not apply to, reverse setbacks, there are still legal
risks associated with increasing the reverse setback distance higher than 250 feet. Currently, a
250-foot ring is measured around the boundary of an existing gas well pad site. A surface
developer cannot develop any residential lots or homes within the 250-foot ring. Increasing the
ring outward to 1,000 feet yields a higher acreage amount of unbuildable land. As a result, property
owners of large tracts of land, real estate professionals, and builders voiced their oppositions
during public hearings and via emails to increasing the reverse setback distance beyond 250 feet.
They claimed that large reverse setbacks would prevent them from developing their land to
construct residential subdivisions. Several claimed in public that increasing the reverse setback
would make a greater case for a federal and state constitutional “Takings” claims against the City.
After further legal analysis, the City’s attorneys recommended that the reverse setback remain at
250 feet. A majority of Council agreed and adopted a 250-foot reverse setback as part of the 2015
Gas Well Ordinance amendments. The risks associated with mandating a larger distances for
reverse setbacks include litigation and risks for legislative preemption, which would likely be
driven by real estate, development, land owner, and mineral interests.
Staff will be glad to provide any additional information upon request.
STAFF CONTACTS:
Kenneth Banks
General Manager of Utilities
940.349.7165
Kenneth.Banks@cityofdenton.com
Aaron Leal
City Attorney
940.349.8376
Aaron.Leal@cityofdenton.com