From
Cindy Mendez, Environmental Quality Manager
Title
Ordinance amending the Code of Ordinances, Chapter 13, "Health and Sanitation," Article XIX, "Gas Drilling and Production," Section 13-504(f) "Gas Well Permit Required" to allow additional gas well permit extensions
Presenter
Jim Cummings, Environmental Services Director
Recommended Action
Approve
Analysis
On January 18, 2011, the Gas Drilling Ordinance was updated to include a five year expiration date on all new drilling wells padsites with one two year administrative extension and further extensions to be granted by City Council. Since that time, natural gas prices have continued to drop and drilling has become uneconomical and many wells have been shut in. In October of 2008, about 200 drilling rigs were situated in the Barnett Shale but today it is not uncommon for less than five rigs to be operating at any given time. Forecasts for price increases are not favorable for the next few years due to massive oversupply. These extensions will offer relief to companies that have invested in the development of the pad site and for mineral owners in the leasing units. This ordinance amendment was reviewed by the Public Safety, Health, and Environment Committee on June 3, 2015.
Financial Consideration
Applicants will be charged $1,500 per extension request per pad site for the amendment to the existing pad site permit.
Body
AN ORDINANCE OF THE CITY OF GRAND PRAIRIE, TEXAS, AMENDING THE "HEALTH AND SANITATION" CHAPTER OF THE CODE OF ORDINANCES OF THE CITY OF GRAND PRAIRIE, TEXAS BY AMENDING ARTICLE XIX, "GAS DRILLING AND PRODUCTION," SECTION 15-504 (f), MAKING THIS ORDINANCE CUMULATIVE; REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH; AND TO BECOME EFFECTIVE UPON ITS PASSAGE, APPROVAL, AND PUBLICATION
WHEREAS, gas well operators have invested considerable funds developing gas well pad sites and to running pipelines to existing pad sites; and
WHEREAS, gas well drilling has become uneconomical due to low natural gas prices; and
WHEREAS, drilling on existing pad sites is more favorable than the development of new pad sites should a gas well permit expire due to the economic environment:
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS:
SECTION 1. That Chapter 13, Article XIX, Section 13-504 (f) if hereby amended to read as follows:
For gas drilling permit applications received after January 18, 2011, all initial drilling activities shall be required to cease five (5) years from the date of permit issuance for the initial gas well for a particular pad site. Any permits that contain authorization for the drilling of gas wells that are not drilled within this timeframe shall be modified by the city to remove any reference to the undrilled gas wells. An operator may apply for a one time three two (2) year administrative extensions from the City’s Environmental Services Director. The Environmental Services Director shall be authorized to require such measures as necessary to minimize the impact of the additional drilling activities upon neighboring properties as a condition of the approval of the each administrative extension. Any additional extension requests or the appeal of a denial of an administrative extension shall require City Council approval in accordance with Section 13-510. Extension requests, whether administrative or requiring City Council approval, shall be requested in writing at least six (6) months prior to any drilling permit expiration date. All extension requests shall be an amendment to the gas drilling permit and the fee required in 13-505 (b) shall be assessed. Any rework or re-frac operations shall comply with this article.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, ON THIS THE 16TH DAY OF June, 2015.