XTO is OUT!
After years of campaigning to drill for natural gas at Dallas’ Hensley Field and paying millions of dollars for gas rights on city land, XTO Energy has dropped its plan, city officials said Thursday.
The subsidiary of Irving-based Exxon Mobil notified City Hall that it no longer wanted its drilling requests on the agenda for the City Plan Commission’s Dec. 20 meeting, said David Cossum, assistant director of sustainable development and construction.
XTO’s about-face, just three weeks after the company renewed its requests, was the strongest indication yet that despite predictions of a flood of zoning applications, drilling in Dallas might draw little industry interest in an era of cheap U.S. prices for expensively produced gas.
It also gives the City Council a nearly open field in crafting a new ordinance with tougher rules — one that is in process but has not been published — to govern future drilling requests.
Although already delayed for months, any new ordinance is likely to be in place long before gas prices rebound and more drillers come calling.
In that case, the city could be in a position to invite future bids for mineral rights on city land in the knowledge that gas companies would have to adhere to some of the region’s strictest requirements.
The word from XTO apparently came in an email or phone call late Wednesday. Cossum said the city told the company it needed to send a formal letter by 5 p.m. Thursday to avoid having its request officially advertised for a Dec. 20 public hearing.
XTO did not answer directly when asked Thursday if the withdrawal was temporary or permanent.
“XTO Energy has asked the city of Dallas to delay planning commission action on our specific-use permits,” company spokesman Jeffrey Neu said.
The XTO shift leaves just one set of requests before the Plan Commission — those from Fort Worth-based Trinity East Energy, which with XTO paid the city a total of $34 million for gas rights in 2008. No matter what happens with the drilling requests, the companies don’t get the money back.
Raymond Crawford, an Oak Cliff resident who has pressed the city to take a tough stand on drilling and hydraulic fracturing, called XTO’s retreat only a partial victory.
“While I’m glad to hear of XTO’s move to withdraw from the Hensley Field location that was adjacent to a Dallas residential community, I still have great concerns about the plans that Trinity East has in place to begin drilling in the Trinity River floodplains and ecosystems throughout Dallas,” Crawford said.
“One of these locations is the L.B. Houston golf course, and I cannot imagine why the Dallas City Council would want to cast a legacy vote in approving this application.”
The leases gave the companies the right to produce and market gas from city land, but not the right to drill wells. That requires specific-use permits, or zoning changes, to authorize gas production, followed by well permits.
XTO focused on Hensley Field, the city-owned former Dallas Naval Air Station on the northwest shore of Mountain Creek Lake.
Since before World War II, the land has been home to enterprises ranging from military aviation and related maintenance shops to aircraft manufacturing and other industrial uses that left polluted soil and water.
Despite the site’s hardworking past, plans for drilling and hydraulic fracturing — or fracking — stirred opposition from nearby neighborhoods and people concerned about potential pollution of the lake.
Opponents even included the Texas Army National Guard, which worried that drilling and production rigs would interfere with helicopter training, and the Republic of Singapore Air Force, which trains helicopter pilots at Hensley Field with the Texas troops.
Trinity East’s plans don’t involve the old airfield, but they are complicated by involving designated floodplains.
City officials say drilling in a floodplain would require separate council approval of permits to fill land to lift it out of the floodplain — another likely controversy — on top of other necessary Plan Commission and council approvals.
That approach probably would still leave questions about potential spills and the logistics of protecting floodplains from drilling and production equipment, and the equipment from floods.
WHAT’S NEXT: Other drilling requests
On Dec. 20, the City Plan Commission will consider remaining requests from Trinity East Energy.
If approved, the requests would go before the Dallas City Council, probably in January. City officials say the requests would require additional floodplain-filling permits from the council.
Early next year, the council is expected to debate a new, probably much tougher ordinance governing future drilling requests.