However, the impacts of this generational shift in American energy production may also be seen closer to home for residents of energy producing states. The American shale energy boom has brought modern energy production activities into areas, including many urban and suburban settings, not possible in previous decades. The presence of energy production in these areas, and the temporary activities associated with production (particularly increased noise, truck traffic, bright lights, and other issues during preproduction stages) have prompted local and state officials to introduce ordinances, laws, and regulations to control these activities.
States traditionally relying on oil and gas production, like Texas and Oklahoma, have seen local governments struggle to strike an appropriate balance in the regulation of shale energy activities. Most local governments have sought to regulate oil and gas production in the interest of their citizens, but some local governments have been pushed to impose onerous regulations on energy activity in order to thwart development of oil and gas resources. These efforts, including the proposal of lengthy setback distances and other provisions that would amount to “de facto” bans of energy production within the jurisdiction, have prompted the energy industry to react with various efforts to influence local elected officials and their constituents on shale energy matters.
Local officials have been attacked for refusing to capitulate to the politics of ambush by environmental groups and activists, many of whom were wholly supportive of natural gas as a key energy source until it became affordable and widely available due to the shale revolution. Well-funded antagonists have driven health fears through the use of tactics and messages, some of which were found to be wholly fraudulent. For example, plaintiffs in a case against a Texas energy company alleging water contamination from shale energy production were found to have “attach(ed) a garden hose to a gas vent – not to a waterline” in order to “light and burn the gas from the end of the nozzle of the hose. The demonstration was not done for scientific study but to provide local and national news media a deceptive video, calculated to alarm the public into believing the water was burning … [and] alarm the EPA.”
The cities of Denton, Texas and Stillwater, Oklahoma have struggled against this backdrop to find the appropriate regulatory approach to shale energy related challenges in recent years. The efforts of activists to restrict shale energy development in these jurisdictions and the reaction of pro-industry advocates in the respective jurisdictions provides an illustrative comparison of different approaches for engaging community leaders and stakeholders in the shale-energy era. A comparison of the approaches and ultimate outcomes in the two cities provides clear evidence that energy providers must work to educate and collaborate with communities to find acceptable solutions for all parties.
DENTON, TEXAS
Background and Demographics
The City of Denton, Texas is located in North Texas. Denton is 73.8% Caucasian, 48.8% male and 51.2% female, with a median age of 27. Approximately 79.5% of the population in Denton is eligible to vote. The City of Denton sits in Denton County, which has been known as the “reddest” County in Texas because no democrat held a seat in a partisan office.
Despite the conservative inclinations of Denton County and surrounding areas, the city has been a hotbed for various forms of activism, including recent anti-shale energy campaigns. The activities of anti-shale activists in North Texas were consistent with actions of radical environmentalists in other states in that they rely heavily on outside funding and organization to augment their lack of local support. Opposition to shale energy production in North Texas is driven by a small group of devoted activists, several hundred citizens in a sprawling metropolitan area of more than 6.5-million residents who are funded and supported by an array of state and national environmental groups.
A leading activist across the Barnett Shale and specifically in Denton is Sharon Wilson, best known for her blog “Texas Sharon / Bluedaze: Drilling Reform.” Although Wilson holds herself out as an organic local voice for citizens, she is a paid employee of the Washington, D.C. based nonprofit group Earthworks and has been active in other anti-fossil fuel campaigns in other parts of Texas and other states.
Wilson worked in conjunction with the Denton Drilling Awareness Group, which was involved in local oil and gas drilling ordinance discussions for years, and other activists to launch the Frack Free Denton campaign. This campaign sought to pass a ban on hydraulic fracturing. The Frack Free Denton campaign was promoted by non-profits, such as Earthworks, in order to shape policy in a local community.
2014 Ballot Initiative
Despite years of activism that resulted in an increasingly onerous local ordinance on shale energy production, some Denton residents were eager to completely drive shale energy production out of the city. This led to the organization of a 2014 citizen petition initiative “to ban hydraulic fracturing” within the Denton city limits. The petition was submitted to the Denton City Council on May 7, 2014 following a campaign organized and funded by the “Frack Free Denton” organization. Other local and national environmental advocacy groups, such as Earthworks, supported this effort.
Pursuant to the City Charter, the Denton City Council certified the petition on June 3, 2014 and scheduled a public hearing on the issue during the July 15 City Council meeting. The City Council took public comments on the petition at the July 15 meeting and voted to reject the proposed ordinance. Therefore, the proposed ordinance appeared before City of Denton voters on the November 4, 2014 ballot as a “Proposition Regarding the Prohibition of Hydraulic Fracturing.”
The leaders of anti-industry sentiment among voters in Denton were activists that aggressively worked over the last several years to drive health and safety concerns about shale energy production. These persistent grassroots activities of a relatively small group of activists in the area drove fears about environmental health impacts into the local population.
These fears may lack a sound scientific or factual basis, but are consistently communicated nonetheless. Further, the advent of social media platforms has provided a vehicle for effectively driving these pseudo-scientific (often baseless) fears into a community. These so-called “Not in My Backyard” or “NIMBY” responses were borne out in the hydraulic fracturing ban election results. Additionally, the efforts of the energy opposition was aided by the perceived missteps of a small local operator who did not act responsibly in their drilling operations close to residential areas.
The powerful health and safety messages driven by the opposition were not rebutted by the industry, but rather message points focused exclusively on economic gain. This led the residents to vote to ban hydraulic fracturing. Voters in Denton failed to respond to the core message of the anti-ban campaign: economic benefits of energy production in Denton. The industry-led campaign focused almost entirely on economic data, through the release of information from academic studies and other sources.
While this economic benefit information is of interest to many voters (i.e. reinforcing opinions of core GOP activists), it did not assuage pursuable voters’ concerns about aesthetic, health, and safety impacts that have been amplified through local activist and targeted social media efforts in North Texas. The non-response by the industry to the environmental and health claims was perceived to the public as a sign of guilt, and the failure to educate on the facts of the energy drilling and production process only enriched the opponents’ argument. Frack Free Denton supporters argued that industry was asking Denton residents to trade their health and clean environment for economic gain. The notion of this tradeoff, whether real or imagined, was an effective tool for gaining the support of persuadable voters. At the local level, claims of environmental threats translate to health concerns. As the public debate was characterized, few residents were willing to vote to trade their health and the health of their families for a job.
Ultimately, the hydraulic-fracturing ban passed in Denton with the support of many Republican-leaning voters and other persuadable voters due to the failure by industry to inoculate and educate against unfounded claims regarding the health and safety risks of shale energy production in Denton. The hydraulic fracturing ban proposition passed on November 4, 2014 by a margin of 58.64% to 41.36%, with 14,881 votes for the ban and 10,495 votes against.
Even though the university atmosphere and the liberal voice exist in Denton, the election results show that the ban passed because many persuadable Republican voters supported the ban. Denton voters supported Governor-elect Greg Abbott, Lieutenant Governor-elect Dan Patrick, and other Republican candidates in the November election. The electorate voting for these Republican candidates also supported the hydraulic fracturing ban by a 17-point margin. Additionally, though there was a voting site on a university campus, the average age of Denton voters was 51.9 years old; and of the 27,491 residents who voted in the November election, only 1,711 registered in the 90 days prior to the election.
The passage of the hydraulic fracturing ban in Denton was a defeat for the energy industry and provided a template for radical anti-energy activists in Texas and elsewhere in the U.S.
Texas Preemption Bill in Response to Denton Ban
Texas oil and gas industry associations challenged the Denton ban in court, but there was also a push by the energy sector and other business leaders to ensure that other local governments did not emulate this extreme ordinance.
Additionally, the matter was quickly addressed in the 2015 session of the Texas State Legislature. House Bill 40 was introduced by Representative Drew Darby on March 10 in response to these concerns. The bill provides that oil and gas regulation is the “exclusive jurisdiction” of state regulators. Further, “a municipality or other political subdivision may not enact or enforce an ordinance or other measure…that bans, limits, or otherwise regulates an oil and gas operation within the boundaries or extraterritorial jurisdiction of the municipality or political subdivision.”
As the bill moved through the Texas House and Senate, a bipartisan compromise was brokered that added language allowing local governments to regulate “only aboveground activity related to an oil and gas operation that occurs at or above the surface of the ground” through the enactment of regulations “governing fire and emergency response, traffic, lights, or noise, or imposing notice or reasonable setback requirements.” However, these local regulations are required to be “commercially reasonable” as they may not “effectively prohibit an oil and gas operation conducted by a reasonably prudent operator.”
Additionally, the law provides that local measures that have “been in effect for at least five years” and have allowed “oil and gas operations…to continue during that period” are presumed to be commercially reasonable and valid. Members of the Texas House and Senate eagerly supported the bill, which was signed into law by Governor Greg Abbott on May 18, 2015.
STILLWATER, OKLAHOMA
Background and Demographics
The City of Stillwater is located in the heart of Oklahoma, only 229 miles north of Denton, Texas. With a population of 47,186, Stillwater is 79.5% Caucasian, 50.6% male and 49.4% female, with a median age of 24. Just over 85% of the population is eligible to vote.
In 2014, Stillwater voters gave Democratic Gubernatorial Candidate Joe Dorman 50.5% of the vote, while Republican Candidate Governor Mary Fallin received 47% of the vote.
Ultimately, Fallin would win Payne County by a margin of 5.6% and the state of Oklahoma by a margin of 14.8% in her successful reelection campaign. Additionally, Stillwater has elected Democrat Cory Williams as their State Representative since 2009.
Local Activism
Like Denton, Stillwater has a vocal contingent of local activists that have sought to obstruct and discourage energy-production activities in the Stillwater area. These activists operate as “Stop Fracking Payne County” and have appeared at state legislative panels and in the local community meetings speaking in opposition to shale-energy production.
The similarities between the message points of the activists in Denton and Stillwater are no coincidence as the two groups have frequently promoted similar materials on social media.
Ordinance Proposals
There was a discussion regarding revisions to the natural-gas drilling ordinance in Stillwater in the late months of 2014. The Stillwater Land Development Committee and the Planning Commission proposed recommendations to the City Council for consideration as they took up the issue in early 2015.
The Planning Commission passed recommendations that included overly burdensome standards, such as a 2,200 foot setback from a “protected use.” If this recommendation was adopted by the Council it would have created a “de facto” ban on the industry activity in the city.
Council Decision
On July 20, 2015, Stillwater passed more reasonable and balanced revisions to their oil and gas ordinance. The ordinance is reasonable and protective of all stakeholders and is a tremendous improvement from the recommendations provided to the Council as well as the Council's first draft of the ordinance.
Specifically, the setback distance was reduced from a proposed 2,200 feet to 400 feet for most structures, except for protected uses, which were set at 660 feet. Additionally, the City added a reverse setback distance of 400 feet for developers.
The City adopted a favorable dust mitigation standard, where Stillwater no longer requires a daily water application but allows an operator to use best practices to reduce dust and only use clean water as necessary. The only section in the ordinance regarding traffic restrictions relates to the permissibility of the City Manager to designate specific routes. Further, the ordinance only requires that air quality and odors meet the applicable and balanced standards adopted by the EPA and ODEQ.
Largely following the Fort Worth ordinance, the noise standards adopted in the ordinance allow noise levels to be measured at the property line of a protected use. The ordinance now allows operators to exceed the ambient noise level by five decibels during the day and three decibels during the night.
With regard to fencing requirements, there was no longer a requirement for masonry walls around a pad site but requires only temporary fencing during drilling and completion and permanent fencing during production phases. Also, the ordinance permits a reduction of the eight foot minimum height of a fence when the site is adequately landscaped.
This ordinance imposes reasonable standards and avoided a de facto ban on the industry. This type of more balanced approach protected the human health and environment of the host community, while avoiding unnecessary burdens on energy production.
Engagement of Council through Education
In Stillwater, education of the Council and staff were of great importance and impacted the outcome in the City. In order to promote a successful partnership between the industry and the community, Stillwater followed the essence of the Collaboration Compact Model.
The Collaboration Compact Model uses the following process to create a positive corporate-community partnership. In pertinent part, the model calls for:
- Assessment of host community and energy producer needs and an initial determination of where they might coincide; identification of each stakeholder’s objective and priorities facilitates this evaluation;
- Alignment of those needs to reflect the mutual interests of both primary stakeholders leads to discovery of areas of agreement;
- Concurrence as to what constitutes a mutually acceptable outcome; creation of a “win-win” result for both parties; and
- Development of a comprehensive program designed to secure the desired outcomes and unite the interests of each party; honest and open communication between shareholders and impacted third parties is required.
By utilizing the Model, Stillwater considered viewpoints from all parties, and values of both were respected.
Importance of Student Voices
With Stillwater being home to Oklahoma State University and several members of Council being employed by this higher education institution, it was essential for college students to be very involved in this debate. Students carried a strong message and delivered concerns about economic prosperity and the importance this sector was to their generation’s future. Hearing from thoughtful young leaders on the subject was a necessary approach revealing an industry not comprised of the stereotypical “old men in suits.” These young vibrant voices, tending to support green initiatives and values protecting our planet, through their studies learned the “truths” about the industry; and still strongly support the development of shale energy resources in-and-around Stillwater.
The engagement of students who were passionate on this subject and have them voice their opinions through comments before the Council, impacted the outcome in Stillwater because city leaders heard from the “future generation” and valued their picture of the future for Stillwater and Oklahoma.
Students were far from the only voices heard on the issue. Members of the local business community as well as veterans also weighed in on the need to regulate energy production in a fair and reasonable manner.
Shaping Outcomes by Supporting Staff and Elected Officials
Throughout the entire public conversation over the proposed ordinance, the pro-energy advocates provided relevant factual information and did not seek to engage in adversarial debates with environmentalists regarding incomplete and misleading talking points.
The message to the City was consistent, focusing on the positive balance of health and safety of the residents and protection of the environment, while not infringing on the constitutional right to develop minerals and further domestic energy production. Striking this balance is consistent with decades of regulatory examination and judicial consideration. In fact, the U.S. Supreme Court has opined, “[t]he governmental power to interfere by zoning regulations with the general rights of the land owner by restricting the character of his use, is not unlimited, and, other questions aside, such restriction cannot be imposed if it does not bear a substantial relation to the public health, safety, morals, or general welfare.”
During this process, the City was provided with well-researched best practices and suggested specific language that should be incorporated and included reasoning as to why those suggestions should be adopted. By explaining the impact and effect that certain proposals would have on the actual industry practice while acknowledging the value of clear and reasonable regulation on energy production in populated urban and suburban environments led to a successful ordinance.
Oklahoma Preemption Bill
While there was no local hydraulic-fracturing ban passed in Oklahoma, pro-energy advocates and elected officials were concerned about the temptation for local leaders to follow the model of Denton and cities in other states, such as Colorado and New Mexico, by enacting ordinances to effectively ban energy production in their jurisdictions. Therefore, Oklahoma’s legislature followed the lead of Texas and enacted an ordinance regarding local bans on energy production and other similarly extreme measures.
Oklahoma legislators responded to these concerns with Senate Bill 809, introduced by Sen. Brian Bingman and other co-sponsors. Senate Bill 809 allows local governments to “enact reasonable ordinances, rules and regulations concerning road use, traffic, noise and odors incidental to oil and gas operations within its boundaries” to the extent that these provisions are not inconsistent with the state statutes and regulations.
Local governments “may also establish reasonable setbacks and fencing requirements for oil and gas well site locations as are reasonably necessary to protect the health, safety and welfare of its citizens provided such ordinances, rules and regulations” do not “effectively prohibit or ban” oil and gas operations. In short, the law provides local governments with a specific set of areas where they may regulate to protect their communities in a reasonable manner, while all other aspects of oil and gas regulations are “the exclusive jurisdiction of the Corporation Commission.” As with House Bill 40 in Texas, the bill moved through the legislature and was signed into law by Governor Mary Fallin, May 29, 2015.
This mandate for a reasonable balance is simply codifying black letter law in addressing important stakeholder interest. For example, in Penn Central Transportation Co. v. New York City, the U.S. Supreme Court determined several factors must be considered when determining if the balancing of interests has not been done properly: the economic impact of the regulation, the extent to which it interferes with investment backed expectations, and the character of governmental action.
Peaceful Coexistence – Protecting Host Communities, While Ensuring Energy Security
The communities of Denton and Stillwater are very similar however the outcomes in the two cities suggest that the distinctly different approaches produced very different results.
While pro-energy advocates in Denton sought to persuade members of the voting public at a late stage through chiefly economic messages, representatives in Stillwater sought to build equity and trust among city leaders by presenting elected officials with thoughtful and well-researched information throughout the development of the ordinance.
An ordinance ultimately was passed by Stillwater. This ordinance was drastically different and more balanced than the initial proposed ordinance. This outcome demonstrates not only the value of constructively engaging local officials, stakeholders, and students with information on aspects of energy production, but it also provides a way forward in other communities using the Collaboration Compact Model of engagement.
The approach taken in Stillwater produced an outcome that addressed the concerns of all stakeholders and represented a far better model than the costly legal fights and enduring negative publicity that continue to emanate from Denton. State laws passed in Texas and Oklahoma may have reduced the chances of a catastrophic local measure, such as a hydraulic-fracturing ban, but there are still substantial opportunities for environmental activists to push local policymakers to enact harmful ordinances if industry is not engaged in a proactive and productive way.
Finding the correct balance between protection of human health and the environment and ensuring domestic energy production is too important to leave to political gimmicks and slick campaigns or conversely to overblown and inaccurate scare tactics. Only through successful engagement and collaboration can this issue be meaningfully addressed. Each year our country fills the coffers of government’s intent on killing the men and women in our military and disrupting our national interests. With abundant and affordable energy, we can ensure our national security, bring our jobs back to the U.S. and seek even greater global environmental protections.
Together communities and energy advocates must work together to address the possibility of real concerns, while not imposing overly burdensome standards. Critical lessons can be found in the tale of two cities – Denton, Texas and Stillwater, Oklahoma.
The U.S. is in the midst of new revolution comparable in scale and impact to other historical shifts that have frankly changed the world. This 21st-century revolution – the shale energy revolution – has impacted global energy markets and balances-of-power much like the internal-combustion engine did during the industrial revolution of the 19th century and as fiber-optics did in the digital revolution of the late 20th century.
Traditionally, oil and gas resources in the U.S. have been produced by way of a vertical drilling process that sought to tap hydrocarbon resources contained in naturally formed pockets or “traps.” Mastering this traditional production process allowed America to become a global leader in early oil and gas production, but the American leadership position began to wane midway through the 20th century as American consumption soared past production in economic expansion during the 1950s and 1960s. Meanwhile the energy center of gravity shifted to the Middle East as massive Arab and Persian fields ramped up production of cheap oil. 
