Bill Would Change How Local Governments Regulate Drilling

Update, March 20, 2013: HB 1496, which would limit how cities could restrict or ban drilling and fracking, is scheduled for a hearing in the Land and Resource Management Committee Monday, March 25 at the Capitol. You can find the agenda here.

Original Story, March 8, 2013: “Local control” is a term you hear a lot of from Texas elected officials. That’s no surprise in a state where lawmakers extoll the benefits of limited central government and bottom-up policy making. But, according to some, there are also times when local regulations can become confusing and cumbersome. Specifically, when they pertain to regulating oil and gas drilling.

“Tarrant county is a great example,” State Rep. Phil King (R-Weatherford) said at a recent panel discussion on the oil and gas boom hosted by StateImpact Texas. “[It has] 34 municipalities within the county each one has different laws regarding drilling. In fact, there’s one community that’s completely outlawed any drilling.”

A bill filed this legislative session by State Rep. Van Taylor, R-Plano, would not take away the right of local jurisdictions to pass those restrictions, but it may make them much more difficult to accomplish.

The bill, HB 1496, would change Texas eminent domain laws, to consider any regulation that restricts drilling for oil and gas as a “taking” under the law. It would mandate that local governments that pass those laws compensate property owners who are prohibited from drilling. In essence, if a city says a company can’t drill on your land, they may have to pay you what the drillers would have in royalties.

“What this bill would do was make cities have to condemn a mineral interest if they decide no drilling inside the city limits,” said Rep. Taylor.

That might raise red flags in communities that want to be able to limit drilling in as inexpensive a way possible, putting cities on the hook for vast sums of money if they wish to ban drilling or keep rigs away from places like schools and parks.

When asked, Rep. Taylor agreed that the bill would make the prospect of limiting drilling more expensive, but argued the the current system amounted to “confiscation without compensation.”