Saturday, November 16, 2013

Buyer Beware: Informed Consent and Gas Wells

The local politics of gas wells boils down to the conflict between the surface and mineral estates. Developing minerals can harm the surface. Protecting the surface can render minerals worthless, because inaccessible.


But one of the big problems in Denton right now is that the two wealthiest interests in the surface and mineral estates are not in conflict. Land developers can build to maximum capacity right up to gas wells without informing homebuyers about the industrial activities that will occur near them. Witness the Vintage situation with DR Horton. Without enforcement of setbacks on new home developments and without stricter disclosure rules, big developers have nothing to lose from gas wells on their property. And we all know that the gas companies are vested under older rules in place prior to the development of homes. So, new surface developments don’t jeopardize their mineral holdings.

It’s a win-win for the big money guys. The only losers are the unsuspecting folks who actually live there and breathe in the fumes. And when they try to sell their homes (as many are doing and plan to do in the Vintage area) they have to disclose the presence of gas wells. So, they take the financial hit in addition to the risks to their health.

As a friend of mine says, “buyer beware” should apply to the big land developers and not just the home owners. The big companies should beware that if they want to develop land in Denton, they will need to know either that they cannot build closer than 1,200 feet from gas wells or they will need to fully and accurately inform potential buyers about nearby gas wells.

This issue is playing out again – this time with a proposed development by Bob Shelton near Ryan Road (see the image above). He wants to rezone about 75 acres from Neighborhood Residential 2 to Neighborhood Residential 3. There is one gas well on the site and, according to a letter from Mr. Shelton in City Council’s back-up material for their meeting this week (item 5D); there are two other approved drilling sites (one of which is just 400 feet from Ryan Elementary). These sites do not show up on the Railroad Commission website, but there is a 105 acre plat in the backup material for City Council that does seem to show them (though it is fuzzy and hard to read).

City Council rejected this request last week. But the Mayor was absent for that vote and so he has put it back on the agenda.

As always, these things are so damn complex it is hard to know what to say. But here are some points to consider. First, from Mr. Shelton’s letter to Mayor Pro Tem Pete Kamp:

So, maybe the development is actually a good thing, because if it works it would mean that site near Ryan Elementary that has been approved (I the City?) would never actually get developed. But, then again, who knows whether this statement is true – it would be good for City Council to press this point and ask what law he seems to be referring to here that would require him to obtain these waivers. And, by the way, my records show that this is actually a well where the majority of mineral owners are based in Denton – many right near the well and some others up on W. University Drive.

And then, consider this from Mr. Shelton’s letter to Mayor Burroughs:

And here is the notice he proposes using:

I’d be interested in hearing the thoughts of City Council on this. After all, this is their ruling ideal (I think) for when it is acceptable to have people living close to gas wells. That is, it is only acceptable when they have given their informed consent. But what does that actually mean in practice and would a notice like this be a good practice?

Is this notice good enough? It is certainly better than no notice at all. So, would it be alright to have homes just 250 feet from a gas well if the homeowners had signed such a notice?

I think it hinges on the question of whether potential buyers would really understand what they are getting into with just these words. I wonder if City Council could require land developers to show potential buyers some videos of actual drilling and fracking operations near homes (they can use footage from the Vintage area). I know this might sound over the top, but how else will folks really understand what “drilling and production for natural gas” really means? 


  1. Ok, so the developer would be required to show potential new home buyers this document but what about re-sale? As anyone who has bought a home knows any documentation can be hidden in "plain sight" or pooh poohed away. When we bought our home in Decatur we specifically asked about the minerals, which did not convey with the sale of the home, we were told "don't worry about it they will never drill for oil out here" no they did not drill for oil but they did put a great big GAS WELL right next to our home.
    I think if developers want to purchase and build homes on these sites they should have to take as much risk as the people purchasing the homes. If the developers also had to worry as much about depreciation or decline in quality of life issues perhaps they would not purchase these tracts of land with gas well sites on them. This would mean the people who own the minerals and own the surface would have to choose which source they want their money from, minerals or sale to developers. The greed of people who want to make money of their surface rights and their minerals rights has caused this conflict with many innocent homeowners paying the cost in more than one way.
    If I were a developer I would not buy a tract of land with gas wells or gas well permits on it so to bad for Mr. Shelton. Leave a buffer and quit trying to squeeze as many homes as you can around these industrial use areas.

  2. The notice to home buyer is a little outdate and prejudicial don't you think,
    buyer is husband, of course first, and secondly wife. Maybe it is a single woman or a woman and her partner or a man and his partner, or maybe just someone like me who does not want to be labeled. Plus, the notice should have to be notarized and signed independently of closing. At closing people have already sold their homes, let their lease expire, or usually pushed into a closing date due to school starting or job starting so it is hard to back out of the home buying process when presented with a little notice to "home buyer" like this. It should be present at the time and offer is accepted on a home.

  3. The devil isn't in the details if the big picture never changes.

  4. And sometimes gas gathering pipelines can be placed across land adjacent to a drilling site rendering the land useless for future development. Developers were never told about that and can't say a lot about it when it happens.

  5. At issue is not whether the buyer is informed, they can do all the research they want and even sign forms indicating they were told. The issue is what can happen later if the buyer is informed. As the Vintage situation proves, having a well near a home is not the same as drilling new wells near a home. DR Horton told me there was a well and I could see the well before purchasing a home in that subdivision. I looked at the city records and found that only one well was planned for the site and since that well existed, I thought it would be ok to buy the house. All of a sudden, eagle ridge is drilling new wells without them or DR Horton or Denton telling home owners. I learned that Denton went to court to stop eagle ridge from drilling the new wells, but the judge allowed it. What protection do we have when we obtain information that tells us there is a well, only one well is planned and approved, the city has a process to add new wells that includes notification, but operators like eagle ridge don’t follow the process?

    1. Even if the City's initial decision is favorable to eagle ridge, there is the possibility someone else can appeal the decision to the ZBA. "Any
      person aggrieved by the decision" has the right to appeal (see TEX. LOC. GOV’T CODE, Section 211.010). For example, a neighboring property owner might appeal the approval of a project or the
      issuance of a permit. If that happens, the original applicant faces the need to go to the hearing to defend his project.

  6. Why should City Council require developers to protect citizens? City Council should protect citizens. They're too busy giving favors to Eagle Ridge and friends. Peggy tweeted last night that "Tim Crouch gets appointed chair of citizen committee." Tim speaks on behalf of Eagle Ridge (
    Just another example of City Council cowing to Eagle Ridge. Eagle Ridge is a bully that frightens our city, and Mansfiled too (, with their threats, lies, and intimidation. But at least our City Council fully supports their spokesman. Watch out Mansfiled, Tim may soon get appointed to one of your committees.

  7. I agree it is the role of Council to protect citizens and a good way to do that is to require developers to toe the line. Not only can we not trust the owners of drilling companies, we cannot trust developers.

    I doubt that anyone remembers the little saga of Unicorn Lake and how Bob Sheldon bulldozed the entire hillside of pin oaks that the city had designated to be preserved. If the neighbors hadn't raised hell, the violation would probably have been swept under the rug.

    A citizen group calculated that the 200-odd mature trees killed were worth thousands of dollars apiece under the current tree code. Sheldon's 'dozer team left a few trees along the fence line and in a nod to the neighbors (who bought those houses primarily because there was a "protected" forest behind their back fences), Council told Sheldon to build six fewer McMansions so the last 50 trees would be spared. No fines were levied and I was told that having to give up those six lots "was punishment enough".

    Environmental destruction and human health hazards will not be avoided until Council knows we will stand behind them when developers and drillers start sending in the lawyers, and that we will pay taxes to hire inspectors and enforcers so that nobody can slip anything over on us.

    And it drives me crazy when I hear that Denton is unfriendly to development and the requirements must be "streamlined". I think that when an industrialist or developer or driller wants to do something in my community they need to have to jump through as many hoops as it takes to ensure that they aren't going to destroy our community.

    1. Big interest wins again. Last night council members fell over themselves thanking DCTA for finally planting a few trees. What about the neighbors that had to deal with the issue before DCTA finally complied? No mention of the citizens. Just like Eagle Ridge and their rights. What about our rights as citizens? We should be vested too. But no, we get more wells in our backyard.

  8. I would guess the Ryan family owns the minerals under this property. Have been told there is a clause in the lease that prohibits drilling on the original Ryan Homestead, which I believe is east of the proposed wellsite. Another example of a prominent Denton family (that has obviously done a lot for the community) making millions off the Barnett Shale.

  9. Is drilling for natural gas the same as drilling a well? If not, what is the difference between all of the natural gas drilling and the water well drilling in Vernon NJ?

    1. The water depth throughout NJ is less than 100 feet, likely around 30-50 feet in Vernon and less than 10 feet nearer the coast. The Barnett Shale is roughly 7,000 feet below ground. Sorry, the scale is not at all similar. Nice plug for your company though.

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