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January 10, 2012TO: Members of the City of Dallas Gas Drilling Task ForceFROM: Dallas Cothrum and Mark HousewrightRE: Concerns with Task Force Recommendations
Via Electronic Delivery
As representatives for several energy companies, we felt compelled to express our serious concernsregarding recommendations to be sent to the Dallas City Council, which were recently approved by the
Task Force.
In our opinion, some of these recommendations will result in the likelihood of no future applications forgas drilling in the city of Dallas. We think the record speaks for itself. Of the many changes beingrecommended or considered by the Task Force 164 come from existing ordinances of other cities. Thereare 99 recommendations that came from either the Southlake or Flower Mound ordinances. Since thecurrent ordinances in those two cities went into effect, there have been zero wells drilled there. Two ofthe largest operators with vast urban drilling experience, XTO and Chesapeake, have announced theywill withdraw from those areas. There is little doubt that the adoption of such changes in Dallas wouldyield the same results.The recommendations that our clients tell us would be "deal killers" are:
1)
Setback requirements
— the recommendation of "1000 ft. minimum distance from the boundaryof the operation site ... to the property line of protected uses", by itself, will for all practical
purposes eliminates the possibility of drilling in Dallas.
Assuming a square tract, an operator will need a vacant tract with a minimum of 134 acres tosatisfy the proposed standards. Few such sites, if any, exist in correct proximity and orientationto the properties our clients have leased from the City of Dallas. And if they did exist, the costfor a drillable tract would be $17,511,120 at $3per square foot 134 acres.We ask that an analysis be done by city staff to determine whether or not this eliminates drillingon any leased areas, and if that's the case, then the issue should be revisited by the Task Force.In short, the setback changes result in another moratorium.
2)
Parks
— prohibiting drilling and production in public parks is a complete reversal of the City's
position when the leases were sold. In fact, two of the pending drill sites are on park lands (one
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