A Colorado energy company claimed the city of Denton’s moratorium on new gas wells has caused it hardship and received a waiver this week to drill five gas wells on land owned by a former Dallas Cowboy.
In a 6-1 vote Monday afternoon, the city’s Zoning Board of Adjustment granted Vantage Energy a waiver to the moratorium. Several years ago, the company became the new owner of many old wells on the city’s west side, including the interest in 148 acres owned by Brian Baldinger, a host and analyst on the NFL Network who was an offensive lineman for the Dallas Cowboys from 1982 to 1987.
The board is a quasi-judicial body under the city charter and serves as the final arbiter in zoning questions. In Vantage’s case, the company had to show a “unique and undue hardship” that was not self-imposed and, by approving the waiver, the city would not harm adjacent properties and would do so “in harmony” with the purpose of the drilling moratorium.
Assistant City Manager John Cabrales said the City Council’s application criteria for waivers to the current moratorium was specific and narrow, but it was possible other energy companies could go before the board and ask for a waiver.
That being said, there aren’t any waiver applications pending and the city isn’t expecting any, Cabrales said. Moreover, a waiver doesn’t guarantee a company can drill, just the right to apply for permits.
Board chairwoman Barbara Gailey, who voted with the majority, said she agreed that the moratorium put an undue hardship on the company. Before casting his lone vote against the waiver, board member Marshall Surratt cited his concerns about the projected 30-year life of the gas wells and any homes or businesses that might be built there in the future.
Company representatives told the board that they were caught off-guard by the moratorium, which was enacted in May and is set to end Sept. 9 unless the council extends it. Vantage had submitted a new site plan for the property and got new permits to redevelop the gas wells. But before the company could drill, it needed to grade the land.
Hickory Creek runs through the property, which is near U.S. Highway 380 and Nail Road. By the time Vantage secured approval from the Federal Emergency Management Agency for new floodplain maps, the permits from the city expired.
The representatives told the board that they understood the purpose of the moratorium was to stop noncompliant gas well development.
“We are willing to work with the city to move these projects forward,” said Seth Urruty, an asset manager with Vantage.
Two Denton residents spoke against the waiver during a public hearing.
Cathy McMullen cited the company’s inspection record, saying it showed that Vantage took a long time to bring the old well into compliance with basic safety requirements, including a shut-in valve.
Ed Soph told the board the purpose of the moratorium was not to get compliance with the current ordinance but to address its weaknesses, including one that allows new homes to be built close to old wells.
Currently, the nearest house to the Baldinger unit is about 2,100 feet away, staff said. Baldinger, who lives in New Jersey, has no house or other buildings on his land. He said he bought the land in 1992 as an investment.
Urruty told the board that the company considered it critical to both drill and hydraulically fracture the new wells as a unit. The company has already drilled and fracked “long-term” wells for the area, he said.
“Fluids will contaminate the well if we wait too long,” Urruty said.
Without the waiver, Vantage stood to lose about 10 percent of production from the 16 wells planned for that unit, or about $14.4 million, Urruty said.
That translates into a total loss of $900,000 per well to the mineral rights owners, according to documents Vantage submitted to the city.
Baldinger said he didn’t sign an oil and gas lease until about 10 years after he bought the land. He retains about 18.5 percent of the interest in the units, according to county tax records. Another company, Western Chief Oil & Gas Co., was the first to drill on his land.
After Vantage took over, Baldinger said he got a call and a letter from Vantage about the change. The company negotiated with him for additional land needed to expand its operations, he said.
In his 13-year career, Baldinger played 143 games in the NFL. He left the Cowboys to play with the Indianapolis Colts from 1988-91 and the Philadelphia Eagles from 1992-93. He can be seen on Playbook as well as the NFL Network’s signature show, NFL Total Access. He also is a regular contributor to NFL.com. He began his broadcast career on Fox Sports in 1997.
Baldinger said he was aware that Vantage planned to begin drilling the wells in October and wouldn’t be finished with fracking and bringing the wells into production until May.
That is, if Denton voters don’t ban fracking in November.
Baldinger said he was not a part of Vantage, but he won’t get his royalties if the company isn’t able to drill and frack the wells on his land.
“I’m a businessman,” he said.
Vantage is a “little bit” concerned about the possibility of a ban, he said, but he was told that the local initiative was being pushed mostly by college students and some university faculty.
“I can’t imagine anyone in Texas banning fracking,” Baldinger said. “Texas could secede from the union and be OK.”
The City Council adopted a moratorium on new drilling permits just before a standstill agreement with another operator, EagleRidge Energy, expired. The city has had a long-running dispute with EagleRidge over its operations reworking old wells in new neighborhoods, which had that company’s operations drilling and fracking as close as 250 feet from homes.
Meanwhile, a petition signed by nearly 2,000 registered voters in Denton has forced an initiative to ban hydraulic fracturing on the November ballot. Hundreds of residents, and dozens of industry representatives, turned out to speak on the issue at one of the city’s longest-ever public hearings on July 15.
Resident Adam Briggle, who is a professor at the University of North Texas, said he wasn’t surprised by attempts to downplay the community’s concerns and involvement.
When people are far removed from the consequences of their decisions, it’s hard for them to see implications other than the financial ones, Briggle said.
In this case, it’s hard for people not living in Denton to see the effects that hydraulic fracturing is having on the community’s character as well as public health and safety, he said.
County property records show that few Denton residents are mineral rights owners who benefit directly from the wells being operated here, Briggle said.
PEGGY HEINKEL-WOLFE can be reached at 940-566-6881 and via Twitter at @phwolfeDRC.