Saturday, December 7, 2013

Signs, Signs, Everywhere Signs: A Big Idea for Informing Prospective Homebuyers


We know that vested rights means that the future of fracking in Denton is likely to include drilling close to homes – despite our best efforts to prevent this situation. The best that we may be able to accomplish now is to make sure that people are fully informed about the presence of nearby gas wells when they buy a home (and perhaps even when they rent an apartment). How do we ensure people really are giving their informed consent to live close to gas wells?

On this question, I recently received an e-mail with what I think is a brilliant idea. The source of this idea said it may be best if he/she remains anonymous. So what follows is a lightly edited version of the e-mail she/he sent me. I would very much like to hear opinions about this. And I would also hope that City Council will consider this idea.

There is, of course, no way realistically for the City to police notifications for homebuyers. So, regardless of any terms of such an agreement, it’s highly unlikely that each and every prospective buyer - both initial and subsequent buyers - will be properly informed.

However, there may be one way to ensure that any prospective buyer who visits the site prior to purchase is properly advised: Simply revise the gas well and/or sign ordinance to require that a large sign, minimum x by x with letters x feet high, which so states information about gas well proximity be placed at each entrance to any new development with a gas well onsite or within X feet.

The signs will have to be clearly visible - not behind a bush, shrub, tree, or fence - and will have to be maintained in good repair by the developer and, later, the HOA. It will have to be erected prior to any disturbance of ground for construction and will have to remain fully visible at all times through the life of the development. The long-term requirement is necessary, because one never knows when a well will be re-drilled or converted from a vertical to a well with lateral lines or what kinds of redriling future technology will make possible.

Required signage will be a low-cost item for the developer (and later HOA), will inform all viewers equally, will be easy for the City to police, will not tread on any mineral rights holders, and will likely not be fodder for court challenges.

Of course, the signs may render some land effectively undevelop-able, at least for residential...but that's the trade-off: short-term revenues from gas wells or long-term revenues from (quality?) development.

9 comments:

  1. Just an FYI: Grand Prairie, TX amended its Gas Drilling Ordinance 2 weeks ago (November 19, 2013) to include an "Intent to Permit." Going forward, it requires that all operators submit an "Intent to Permit" when they first submit their applications for permit(s) for wells to the City for a specific drilling site. It would not require them to do much of anything but pay the City a $100 fee and then let the City know that they do plan to drill additional wells in the future.

    That way, when development comes within 300 feet to 700 feet of a drilling site, then the future home owner will be notified by the builder in their paperwork. If there is no "Intent to Permit" filed, then the operator would not be allowed to drill in the future. And so it goes...

    This is one of those, "oops," moments when a city discovers that they never considered that a housing developer would come in and build homes right up next to a drilling site...even though the protected use setbacks for "established protected uses," is currently 700 ft. Apparently, the Ordinance doesn't work the other way around. So, now buyers will be told about a drilling site that is near their NEW homes and the future plans of the operator. But the details were sketchy, at best, when it was presented for a vote.

    We think this is still a very murky issue.

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  2. What you are describing is called slander of title. Signs (that I jokingly suggested in a previous post) would be really unfair to a developer who is not receiving anything from the gas wells, like the Rayzor Ranch developer.

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    1. How is this unfair? I am curious to see this idea in the round - can you please make the case? Thanks.

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  3. Because the value of their property has been decreased by the city placing signs & they received nothing as far as bonus/royalty. Still asking Ms. Wolper to weigh in!

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    1. Interesting - but arguably this would better reflect the actual value of their property, because it would let the market actors work on full information (home buyers will know more about the area) - so it may not decrease the value of their property so much as establish a fair and accurate value based on full knowledge for a free market transaction.

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  4. What if the sign said a child molestor lives in the neighborhood or that the developer has installed faulty pipeline valves? They are both true but I would think the city would be liable for the drop in property value if they put up a sign.

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    1. interesting - but aren't child molestor's required to notify neighbors? so is the difference just the nature of a permanent sign? And I don't see a problem with a faulty pipeline valve sign...I am looking at it from a prospective buyer point of view and that would be nice to know. So maybe some of this disagreement hinges on the point of view - existing resident v. potential buyer...?

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    2. Did you see the Developer said the signs would impact the title to the land & the requirement is unenforceable?

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  5. Compared with accepted techniques using full-scale rigs and benchmark drill pipe, Coiled-Tubing Drilling (CTD) can significantly decrease environmental influence. CTD is mostly a reentry drilling service that enables operators to more competently find hydrocarbon pouches still untapped in the reservoir. Reentry wells reduce the locality at the exterior impacted by drilling, but also reduce the volumes of iron alloy, cement, and drill cuttings conceived in the drilling method with Hydraulic Well Fracturing Process. Coiled-tubing technologies replace the customary rigid, jointed drill pipe with a long, flexible coiled pipe string. This can reduce the cost of drilling, as well as supply a smaller environmental footprint. In particular, less drilling grime is needed, which decreases the use of nonrenewable assets and minimizes the promise for unplanned issues. Coiled tubing furthermore uses slim hole drilling techniques to accomplish very cost-effective drilling and less impact on the natural environment. In supplement, because drilling procedures are not cut off for pipe connections, CTD can use shut" mud circulation methods, which decrease the risk of spills and blowouts.

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