The Texas Legislature introduced House Bill 40 this week. The House Committee on Energy Resources voted 10-1 to approve the legislation for consideration by the full House. HB40 is among a number of bills filed after Denton residents voted a city-wide ban on fracking into effect last November. This bill seeks to “explicitly confirm the authority for regulation of oil and gas activities within the state”, and thereby preempts any municipality from superseding state law and oil and gas regulation by the Railroad Commission (RRC).
While the bill would not allow cities to ban oil and gas operations, it does allow municipalities to create local regulations around surface activity like truck traffic and noise of an operation nearby as long as the measures are commercially reasonable. A recent amendment clarified “commercially reasonable” as a “condition that permits a reasonably prudent operator to fully, effectively, and economically exploit, develop, produce, process, and transport oil and gas.”
From Texas HB40:
The authority of a municipality or other political subdivision to regulate an oil and gas operation is expressly preempted, except that a municipality is authorized to enact, amend, or enforce an ordinance or other measure that regulates only surface activity that is incident to an oil and gas operation, is commercially reasonable, does not effectively prohibit an oil and gas operation, and is not otherwise preempted by state or federal law.
The bill is supported by the oil and gas industry. Environmentalists and municipalities who oppose the bill are concerned with the rolling back of local control, as the legislation would render local protections irrelevant to the oil and gas industry.
Follow the bill through the Texas Legislature with the Texas Tribune Legislative Guide.
Carissa Ries
carissar@banksinfo.com