Tuesday, September 4, 2012

EagleRidge wants out of the moratorium

The Denton Record Chronicle ran a story today about a shale gas operator, EagleRidge Energy, that is seeking an exemption from the current Denton moratorium for four of their wells (Northwest part of Denton).

EagleRidge is citing two reasons for their request. First, the moratorium is causing them economic hardship and exposing them to the threat of top leasing (if their leases expire prior to drilling, mineral owners can lease to another company). Second, their applications were submitted prior to the moratorium, which means that their project was effectively in the pipeline. The first reason seems to be the weakest - the moratorium is designed to protect the health, safety, and welfare of Denton citizens. If this causes companies short-term financial hardships, so be it. The second reason, however, seems more important. It raises a larger question about when companies can claim that they (and their wells and operations) are vested under older regulations. This rationale can be used even after the new ordinance is passed to claim that newer, stricter rules (based on improved understanding and technological capacities for reducing harms) do not apply to any given well, because it was put in motion prior to adoption of those new rules. As old wells are re-worked by smaller companies (that may be more likely to act irresponsibly due to tighter operating margins), this question of when a project is vested under old rules will become increasingly important.

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