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Deja Vu: OPEC's Recurring Oil Production Dilemma

Deja Vu: OPEC's Recurring Oil Production Dilemma

Saudi Arabia, OPEC’s largest producer…

Andy Tully

Andy Tully

Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com

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A Potentially Massive Win For Fracking In Texas

Gov. Greg Abbot’s signature is all that’s needed to impose a ban on the ability of Texas’ cities to limit potentially harmful oil drilling practices, including hydraulic fracturing, in their jurisdictions.

The measure, which easily passed both houses of the Republican-led Legislature, was welcomed by industry groups as a much-needed rein on “overregulation” and denounced by environmentalists, who said it deprived municipalities of control over their local environments.

Abbot has not involved himself in in the debate over the bill, which the state House passed in April by a vote of 122-18 and the Senate passed 24-7 on May 4. Nevertheless, the governor is expected to sign it. Related: A Point To Consider Before Lifting The US Oil Export Ban

The Texas Legislature worked quickly to draw up and pass the law since November, when Denton, a college town about 40 miles north of Dallas-Fort Worth, enacted a law banning hydraulic fracturing, or fracking, in its jurisdiction. Supporters of the Denton ordinance cited fears of earthquakes linked by some studies to fracking and other potential threats to public health and safety.

The state law, however, is based on the rights of oil and gas companies to do as they please on the property they own. But while it forbids bans on underground drilling, it allows some “commercially reasonable” above-ground restrictions, including setting distances between wells and businesses, schools and homes, excessive noise or light after dark and limits on truck traffic. Related: This Deal Could Completely Change North American Energy Dynamics

Besides forbidding bans on underground activity, the state law includes prohibitions against any bans on fracking, limits on injection rates at wastewater disposal wells and rules requiring drillers to install and regularly inspect underground shutoff valves at some onshore wells for use in emergencies such as violent weather.

Supporters of the measure say it was necessary to unify both state and local rules on energy drilling and to prevent a statewide jumble of conflicting laws that threaten energy production in a state that has prided itself as a major US source of oil and gas. The author of the bill was Rep. Drew Darby, a Republican from San Angelo who serves as chairman of the House Energy Resources Committee.

Texas’ energy industry praised the legislation as both good for business and strict enough to protect the environment. Related: How Shale Is Becoming The .COM Bubble Of The 21st Century

Todd Staples, president of the Texas Oil and Gas Association, said the Legislature’s success in passing the bill would “keep Texas communities safe and our economies strong. … [It] provides cities with authority to reasonably regulate surface level oil and gas activities, while affirming that regulation of oil and gas operations like fracking and production is under the exclusive jurisdiction of the state.”

Opponents, including many local politicians and environmentalists, said it robs localities of control of their own jurisdictions.

“I think this is a sad day for Texas, a sad day,” said Andrew Dobbs, program director for the Texas Campaign for the Environment. “I think a lot of local governments are going to have a rude awakening over the next few years. … This is a power grab [by the industry] that is going to be difficult to roll back.”

By Andy Tully of Oilprice.com

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