Southlake Times > News
Natural Gas Drilling
By Christina Rowland
The city of Southlake held a city-wide SPIN meeting Monday night to discuss natural gas drilling in Southlake. Chesapeake Energy also attended the meeting and gave a presentation concerning their company.
The natural gas deposits located inside the Barnet Shale have peaked the interest of companies like Chesapeake. The Barnet Shale is a very large natural gas reserve that stretches across 20 North Texas Counties. The gas is located about one-and-one-half miles below the surface. The reserve was originally thought to only stretch across 15 counties, but that number has been updated to 20 and could change again as drilling technologies improve.
To drill in the city of Southlake, a company must first buy or lease the mineral rights to a piece of property, then must apply for a specific use permit (SUP) and then a gas permit from the city.
Chesapeake Energy currently has leases in Southlake with Rucker and Gateway Church according to Jerri Robbins, the media relations officer for Chesapeake Energy Company, but the company is seeking no further leases at this time. The company indicated that it could revisit the decision to drill in the city at a later date.
According to Ken Baker, the director for planning and development services for the City of Southlake, city staff has not received applications from any drilling companies for the SUP that is needed to start drilling.
The permit fee for the SUP in Southlake is $15,000, which is double the cost of some of the surrounding areas.
“The reason that the permit fees in Southlake are higher than surrounding areas is due to the submission requirements of the ordinance for an application to be submitted being more detailed and comprehensive than what other cities are requiring,” Baker said. “The administrative cost to evaluate and review a permit application is higher than other cities. The city believes that it is essential that the substantial information outlined in the ordinance be provided to properly evaluate drilling applications in a manner that is in the best interest of public health, safety and general welfare of the citizens.”
The permit fee is not the end of the fees paid for drilling rights.
“There is a requirement for a checking account requiring $15,000 to be deposited and maintained at a constant level for each pad site. There is a $15,000 padsite permit fee, as well as $8,500 per well fee, $1,500 pipeline fee, as well as double the price per foot for a pipeline easement, because the property values are increased in Southlake as compared to other cities in Southlake,” said Robbins.
The city intends for high permit fees to also cover road maintenance, all processing fees for the permits and the cost of any technical advisors the city would have to hirer to review the submitted information.
“It is the city’s intent that the financial costs associated with processing the gas drilling SUP application and enforcing the ordinance not be paid for by the taxpayers,” Baker said. “As such, the fees are set at a level in which the city feels that it adequately covers its administrative costs without passing this financial burden on to the taxpayer.”
In addition to high permit fees the city has also set strict guidelines on where drilling can occur in respect to how close it is to buildings and public property.
According to the city oil and gas ordinance, no well may be drilled closer than 1,000 feet from any residential structure or commercial building or within 1,000 feet from the boundary line of any abutting property with a public building, hospital, institution, or day care center.
Although Chesapeake has halted any further leasing for the time being other companies have not. The city does have rigorous requirements, but they say they are not trying to discourage drilling in their city; they are trying to look out for everyone’s best interest and according to Baker the city at some point might even lease their own land.
“There is no doubt that gas drilling will produce revenue for property owners and the city in terms of lease agreements and royalties and help stimulate the local economy,” Baker said. “However, it is the city’s job to ensure that the drilling and production of the gas be conducted in a manner that protects the public health and safety and the current economic investment of property owners by ensuring all necessary precautions for the safeguarding of people and property are implemented.”
Not all land owners in the city will be approached to lease their mineral, even if they want to be. Some places are reachable through drilling sites outside the city, but until any energy company actually applies for the permit and meets all the regulations no one will start getting royalty checks.
The natural gas deposits located inside the Barnet Shale have peaked the interest of companies like Chesapeake. The Barnet Shale is a very large natural gas reserve that stretches across 20 North Texas Counties. The gas is located about one-and-one-half miles below the surface. The reserve was originally thought to only stretch across 15 counties, but that number has been updated to 20 and could change again as drilling technologies improve.
To drill in the city of Southlake, a company must first buy or lease the mineral rights to a piece of property, then must apply for a specific use permit (SUP) and then a gas permit from the city.
Chesapeake Energy currently has leases in Southlake with Rucker and Gateway Church according to Jerri Robbins, the media relations officer for Chesapeake Energy Company, but the company is seeking no further leases at this time. The company indicated that it could revisit the decision to drill in the city at a later date.
According to Ken Baker, the director for planning and development services for the City of Southlake, city staff has not received applications from any drilling companies for the SUP that is needed to start drilling.
The permit fee for the SUP in Southlake is $15,000, which is double the cost of some of the surrounding areas.
“The reason that the permit fees in Southlake are higher than surrounding areas is due to the submission requirements of the ordinance for an application to be submitted being more detailed and comprehensive than what other cities are requiring,” Baker said. “The administrative cost to evaluate and review a permit application is higher than other cities. The city believes that it is essential that the substantial information outlined in the ordinance be provided to properly evaluate drilling applications in a manner that is in the best interest of public health, safety and general welfare of the citizens.”
The permit fee is not the end of the fees paid for drilling rights.
“There is a requirement for a checking account requiring $15,000 to be deposited and maintained at a constant level for each pad site. There is a $15,000 padsite permit fee, as well as $8,500 per well fee, $1,500 pipeline fee, as well as double the price per foot for a pipeline easement, because the property values are increased in Southlake as compared to other cities in Southlake,” said Robbins.
The city intends for high permit fees to also cover road maintenance, all processing fees for the permits and the cost of any technical advisors the city would have to hirer to review the submitted information.
“It is the city’s intent that the financial costs associated with processing the gas drilling SUP application and enforcing the ordinance not be paid for by the taxpayers,” Baker said. “As such, the fees are set at a level in which the city feels that it adequately covers its administrative costs without passing this financial burden on to the taxpayer.”
In addition to high permit fees the city has also set strict guidelines on where drilling can occur in respect to how close it is to buildings and public property.
According to the city oil and gas ordinance, no well may be drilled closer than 1,000 feet from any residential structure or commercial building or within 1,000 feet from the boundary line of any abutting property with a public building, hospital, institution, or day care center.
Although Chesapeake has halted any further leasing for the time being other companies have not. The city does have rigorous requirements, but they say they are not trying to discourage drilling in their city; they are trying to look out for everyone’s best interest and according to Baker the city at some point might even lease their own land.
“There is no doubt that gas drilling will produce revenue for property owners and the city in terms of lease agreements and royalties and help stimulate the local economy,” Baker said. “However, it is the city’s job to ensure that the drilling and production of the gas be conducted in a manner that protects the public health and safety and the current economic investment of property owners by ensuring all necessary precautions for the safeguarding of people and property are implemented.”
Not all land owners in the city will be approached to lease their mineral, even if they want to be. Some places are reachable through drilling sites outside the city, but until any energy company actually applies for the permit and meets all the regulations no one will start getting royalty checks.
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