Commercially Unreasonable: The Blueprint for Killing Local Control

The Texas Legislature is on the attack. And their strategy is  clear. They are going to eviscerate local control by giving the oil and gas industry the power to define what counts as a “reasonable” rule. Municipal oil and gas regulations will be judged on the industry’s terms.

Of the dozen bills that target local control, HB 40 (and its companion SB 1165) has the most momentum. This is a dangerous piece of legislation that could potentially undermine not just the ban, but also other protections won by communities over the years.

HB 40 expressly preempts local control over oil and gas, effectively making the Railroad Commission the City Council of Texas.

More specifically, this bill changes the standard for determining the validity of municipal oil and gas regulations. Currently, local rules are judged foremost in terms of the impacted communities: do they provide reasonable protections for health and safety and mitigations against nuisances? HB 40 shifts the standard to the industry’s perspective. It will require local rules foremost to be “commercially reasonable.” In other words, the test shifts from “does this protect the community?” to “does this allow operators to fully and effectively exploit minerals?”BRI

Armed with this new standard, the industry will be able to challenge a wide range of local protections, claiming now that they are illegal because they are not “commercially reasonable.” Just what counts as “commercially reasonable” is unclear, but we can be sure they will use this legislation not just to counter the Denton fracking ban. They will also use it to attack what they are now calling “extreme setbacks.” Denton, Flower Mound, Dallas, Southlake, and several other cities will be vulnerable. Anything the industry doesn’t like is now fair game for being illegal, because ‘unreasonable.’

Please let the legislature know you support community vitality above industry profits. Tell them to get their priorities straight and vote no on HB 40.

Contact the House Energy Resources Committee. Contact our Representative Myra Crownover. Contact our Senator Craig Estes. Here is a form you can use to easily email key representatives. Here is the contact information for all of Senators – tell them to vote no on SB 1165 (companion to HB 40).

Why Local Control Matters

The Denton fracking ban has sparked an important discussion about the political authority of municipalities and the role of citizens’ initiatives in a democracy. This is often couched under the label of local control, a core value that state legislators are now hypocritically attacking.

One of their strategies is an appeal to rule of law. In a nutshell, the argument is something like: “Local control is all well and good as far as it goes. But it is not an absolute value. Taken too far it becomes mob rule. The Bill of Rights prevents majorities from stripping minorities of their civil liberties. Just because an ordinance is passed by a city or citizens’ initiative, doesn’t mean it can trump certain basic rights that are afforded all U.S. citizens.” Here’s one example of this argument.

No one will dispute the possibility that local control can be misused to violate Constitutional protections. But this argument doesn’t apply to Denton’s hydraulic fracturing ban. As we’ve maintained all along, the ban is legally sound and indeed it is less restrictive than other valid Texas ordinances.

Denton’s law is not depriving anyone of their property rights (or any civil liberty). It is simply a recognition that the rights of all citizens to peacefully and safely enjoy their property trumps the imperative to maximize profit from mineral resources via a hazardous, uniquely invasive, and noxious well stimulation technique. Securing equal rights for all citizens requires limiting activities that harm others. In other words, property rights come with the correlative duty to respect the property rights of others.

Indeed, the rule of law argument actually favors the Denton ban, because it was the only remaining path to secure the basic rights of citizens put in harm’s way. Let us not forget for how long and hard the people of Denton worked to draft a set of reasonable rules. Leaning on systematically biased state laws, the industry refused to cooperate. On November 4, bad neighbors got their comeuppance.Like-a-Wolf-In-Sheepskins-wolves-25224841-245-205

In reality, the rule of law argument is a sheepskin atop the wolf of corporate power. The oil and gas industry owns the state legislature. They fund the campaigns of law makers and even regulators. As a result, they have been able to put in place a legal system that prioritizes their profits over health, safety, community integrity, and welfare.

This is why local control is so vital in this context: municipalities are the only level of government concerned with protecting the people exposed to the harms of fracking. Rule of law is only as good as the laws that are ruling. With vested rights, non-disclosure of chemicals, non-reporting of emissions, the dominance of the mineral estate, lax enforcement, and much more, the state allows the industry to run roughshod over the people. Those appealing to the rule of law at the state level need to get busy making some better laws. In the meantime, local communities will need to continue to stand up for the rights of those neglected by the state.