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Master Plan Document

Master Plan Document

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Published by raymond_crawford

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Published by: raymond_crawford on Jan 10, 2012
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 January 10, 2012 TO: Members of the City of Dallas Gas Drilling Task ForceFROM: Dallas Cothrum and Mark HousewrightRE: Concerns with Task Force Recommendations
Via ElectronicDelivery 
As representatives for several energy companies, we felt compelled to express ourserious concerns regarding 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 nofuture applications for gas drilling in the city of Dallas. We think the record speaksfor itself. Of the many changes being recommended or considered by the TaskForce 164 come from existing ordinances of other cities. There are 99recommendations that came from either the Southlake or Flower Mound ordinances.Since the current ordinances in those two cities went into effect, there have beenzero wells drilled there. Two of the largest operators with vast urban drillingexperience, XTO and Chesapeake, have announced they will withdraw from thoseareas. There is little doubt that the adoption of such changes in Dallas would yieldthe same results. The recommendations that our clients tell us would be “deal killers” are:1)Setback requirements – the recommendation of “1000 ft. minimum distancefrom the boundary of the operation site … to the property line of protecteduses”, 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 aminimum of 134 acres to satisfy the proposed standards. Few such sites, if any, exist in correct proximity and orientation to the properties our clientshave leased from the City of Dallas. And if they did exist, the cost for adrillable 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 thiseliminates drilling on 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 inanother moratorium.2)Parks – prohibiting drilling and production in public parks is a completereversal of the City’s position when the leases were sold. In fact, two of thepending drill sites are on park lands (one adjacent to L.B. Houston Golf Course and one on the Gun Club). Not only were these sites advertised in theoriginal RFP, but they were also specifically identified by city staff before theleases were purchased. It will result in a breach of agreement.3)Noise continuous noise monitoring is extremely expensive. The additionalcosts will likely make operations unaffordable. Also, the proposed noiserestrictions should be reasonable and achievable.We believe noise should be averaged over several readings and should bemeasured at a reasonable distance from the padsite to allow for mitigation.4) Emissions – since wells in the city of Dallas are expected to be dry gas wells,vapor recovery equipment should not be required. However, if any wells requiresuch equipment due to the volume of emissions, then the 95% recoveryefficiency level is virtually unachievable on an ongoing basis. 92% is morepractical and TCEQ prefers 90%. In addition, it’s important to define whata “Hydrogen Sulfide field” is and what “producing H2S gas” means. The TaskForce should keep in mind that even the natural gas we burn in our homescontains trace elements of H2S.We recommend using the definitions in Texas TAC 16 Part 1, Ch. 3.36 todefine H2S fields and wells.5) Pad Site Operations -- produced water or wastewater pipelines may benecessary to reduce the footprint of the well in some cases. Not only have thesesystems already been approved by the Park Dept. and the Corps of Engineers,they can also reduce truck traffic and redundancy of equipment. These linescan allow the production facilities be located in industrial of less intrusive areas.We recommend that this be a part of the normal SUP process.6) Duration of Permit there can be no time limit on drilling activities. Thesewells will require very limited re-working, re-drilling and other operations formany years.Other issues are critical but not necessarily “deal killers”. We will addressthose items in a separate memo next week, but we felt that it was important toput absolute deal killers on the table ASAP. We will be happy to provide experttestimony on any of the list above to the Task Force. In fact, we really would

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