Sunday, August 11, 2013

Government for the Corporations: More on Mineral Properties in Denton

I’ve been digging into the Denton Central Appraisal District’s 2013 data on certified appraised value of minerals on active accounts in the City of Denton. I am interested in knowing who is making the royalty money and where they live.  

In my last post, I reported my findings that roughly 85% of local mineral wealth is held by energy companies like Devon and major land development corporations like Robson and Hillwood (which is also acting as the energy company as it develops Hunter Ranch). I estimate that all together this represents something like $75 million (of a total of about $85 million).

That leaves something like $10 million (more or less) unaccounted for. Who owns this remainder?

The biggest owner I left out of my last post is the City of Denton at $3,226,840. Denton Independent School District (DISD) owns $96,850. Interestingly the University of North Texas (UNT) is listed at $0 for 2013 (but in 2012 it was $13,970; in 2011 it was $30,420).

There are 3,820 mineral properties listed as active accounts in the City of Denton. But that number is deceiving, because the vast majority of the wealth is concentrated in just a few hundred of those. Nearly 2,000 properties are appraised at $100 or less (800 are valued at $0). 2,500 properties are valued at $1,000 or less. Only about 500 properties are valued at $10,000 or more. Only about 135 properties are valued at $100,000 or more.
If you sort the list of active mineral property accounts by value from largest to smallest (starting with the largest property, owned by Devon, valued at nearly $2.7 million), you have to scroll a long way down until you find a mineral owner who seems to be an actual person actually living in Denton. The first 132 spaces belong to corporations and a few people with outside mailing addresses. That’s over $70 million or 83% of the total wealth before we get to (what at least seems like) a Denton resident.

It reminds me of all those Task Force meetings back when we were revising the ordinance and the only folks who came to speak in support of fracking were industry hacks from out of town. It might explain the unique narrative of urban drilling around here. Stories from rural communities are more wrapped up in struggling land owners, especially farmers and ranchers, and their decision about whether to lease their minerals. Think Promised Land…also think about the impetus for Gas Land, which originated when Josh Fox faced the allure of $100,000 to lease his mineral rights.

But I am starting to get the sense (though I need to dig around more, stay tuned for future posts) that most folks around here do not own the mineral rights under their homes or apartments. They are owned by far away and/or corporate interests. So our story is not nearly as much about locals wrestling with a dilemma about whether to risk damage to their land, community, and heritage for the promise of big royalty checks. For the most part, we don’t have that choice.

A major reason drilling is allowed is because minerals are considered private property and America is founded on respect for private property. Denton’s City Council members will tell you that they would like to do more to restrict drilling and fracking, because they are bad for public health, safety, and welfare – and the role of local government is to protect those things. But, they will quickly add, the role of local government is also to protect the private property rights of its residents. That is fair enough – it is a balancing act.

Yet whose property are we protecting? Thanks to the divorce of the surface and mineral estates, it is not simply the local residents’ who also own the surface property. The split estate might create a perversion where local self-determination is subverted into local protections for corporations and out of towners. See my next posts for more on this...
So, I will dig some more, but first a note about what 'local' actually means (e.g., a mineral owner with a mailing address in Sanger?) and where people actually live (e.g., what about a Denton P.O. box?). The data I have can’t answer these questions. But let me give you some sense of why I think they point to even less local ownership of mineral wealth than my last post suggested.

The largest single mineral property held by what appears to be a Denton resident is valued at $102,960. It’s owned, interestingly enough for those who know their Barnett history, by a family named Mitchell.

But here it gets tricky and I emphasize what APPEARS to be a Denton resident. It turns out there are lots of Mitchells. The $102,960 well has two names associated with it, Gerald and Nedra. That one gives a Denton address. But then there are wells with just the name Gerald Mitchell…and they give an Austin address. Other Mitchells have Denton addresses – but still others are elsewhere, like The Colony.

Then there are the two next largest single properties that appear to be owned by a Denton resident valued at $84,930 and $71,250. They are both owned by Eagle Farms (they own a total of $277,450). But does anyone know more about them? It is tough to say if this really counts as local ownership.
So, things get fuzzy quickly once we get down to the smaller leases. And it is frustrating slogging through the data (I can’t get the addresses to export into an excel file so it entails lots of clicking).

As you click through some of the mid-size and smaller leases, you start seeing more names of people and fewer names of corporations and trusts. Some of these have Denton addresses, like Richard Harris with a property valued at $65,820. But still, even at these smaller figures, many properties are owned by people outside of Denton. For example, there is a property valued at $58,610 owned by Brian Baldinger…who gets his checks at an address in Marlton, New Jersey. A little way down there is Donald Green in Fritch, TX. And then a company based in Massachusetts and another two out of Dallas. And then there is the Wallace family in Dallas. Then some folks in Plano, Argyle, Sanger, Azle, Highland Village, Ponder, Dallas, Richardson…Then an LLC in Whitesboro, TX and another in Dallas. Then Robert Selby in Paradise Valley, Arizona. Then an energy company in Carrollton and another in Midland, a corporation in Plano and another one from Broken Arrow, Oklahoma…

There is one property, Acme Unit 1H, that has 265 individuals with mineral interests involved. 230 of those properties are valued at less than $1,000 (most of these at $100 or less). I guess some are local residents - I didn't look (actually I did just peek at one valued at $260 and found that Mr. Oxley is in Frisco). But I did start looking at $1,000. I found at that level Mr. Boydston in Venus, TX, Ms. Irick in and Ms. Bowen both in Aubrey, a Ms. Vaughn in Plano, and a Ms. Lybrand in Mesquite, TX. At around $2,000 I found a company in Corsicana and Ms. Jones who gets her checks sent to a lawyer in Gainesville (a sign, I believe, of old family money - there seem to be lots of Jones on similar parcels of land and a Jones Family Trust). Around the $3,000 level I found three Wood brothers from Dallas and Mr. Higginbotham in Richardson and Mary Beal in Plano. Then around $8,000 - $10,000 the people are in Arlington, Nichols Hills, OK, Groesbeck, TX, and then there's Baylor University. At about $30,000 is a church based in Sioux Falls, SD. Then the company itself, based in Midland, seems to actually own 8%, which is $81,530 (this is in addition to its 70% lease).

Of the 35 records valued at more than $1,000 - I found 8 that look like individuals living in Denton. We need to add to that a $31,670 (3.3%) stake held by the City of Denton. But we are still looking at significant influence wielded by absentee mineral holders.
So as I dig into this more it is becoming clear that Denton residents are far from the main property owners. I'll keep digging...

I agree that a major role for local government is to protect property rights. But that means LOCAL property rights, not the rights of Devon, Enervest, EagleRidge, Legend, Vantage, Eagle Oil and Gas, or Hillwood Oil and Gas, or out of town absentee mineral holders.

Whatever happened to local self-government where the people put at risk by industry have a strong voice? Whatever happened to government of the people, by the people, and for the people?

Oh, right, corporations are people too.


  1. It should also be noted that any decision regarding drilling ordinances or decisions made by our city council should be weighed by what sort of personal interest do the voting members of the city council have in drilling rights? James King's father has 3 gas wells on his homestead on Country Club drive, plus multiple wells in the area. James King's wife, in-laws, and brother and sister in-laws have multiple gas wells in Krum under the lease name of Merritt. Don't get me wrong because I do like them, but I believe Chris Watts and Mark Burrough were receiving revenues also from gas well royalities when the voted for decisions related to ordinances and gas well drilling in Denton.
    I believe anyone who votes for or make decisions related to gas well drilling in Denton or whose family profit from the misery of other should recuse themselves from any decisions related to drilling activity which affects the citizens of Denton.
    I never really considered myself judgement or cynical before I started my quest to regulate drilling in Denton but that has changed. Do you really think the powers at city hall can be objective when making decisions regarding revenue which affects the city or their relatives? Do you really think our gas well administrator can be objective if negative press and increase public pressure reduces the number of gas wells in Denton. Think about it, this would mean the funding for the Gas Well administrators office would drop due to decrease permits and revenues, so the office staff would be greatly reducued or de-funded completely. No one is going to purposely get rid of their own city salary with benefits to include a nice retirement.
    The numbers of people who are negatively affected by gas well drilling far outweighs the corparations who take their profits and will be long gone when a gas wells fails or our city runs out of water, so why are more people not standing up to defend their rights to clean air, water, and a safe environment to raise their children?
    It can't be ignorance because plenty of smart people live in Denton!

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  3. So no one who owns Exxon stock in their 401K can vote on these issues?