Trinity East's Vapor Chase

Drilling thousands of feet into the earth is a cakewalk compared with dealing with City Hall.

The city acreage did another thing too: It provided economies of scale the rest of the private parcels Trinity East was putting together in Dallas, Irving and Farmers Branch by themselves couldn't touch. "You've got one set of equipment for 20 wells, and it costs about the same to operate that as it does for five wells and we've got four times the production," Fort said. And it was that economies of scale, they believed, that held this web of properties together, made it worth producing. Not to mention the fact that the Dallas lease represented an integral link for the gas gathering lines connecting the properties in Irving and Farmers Branch.

It must have been heartening to see that so much of the groundwork at the municipal level had already been laid. City staff brought the council an ordinance change in September 2007 to remove "gas drilling and production" from the definition of mining, which was prohibited on parkland. This was critical, because parkland composed much of Trinity East's acreage.

"It was very clever," recalled council member Angela Hunt, a longtime opponent to drilling in Dallas. "And it wasn't described or discussed that way, and that was the effect of it. I voted against it anyway, but unfortunately council approved it."

City Council members Angela Hunt and Scott Griggs, opponents to drilling on parkland.
Mark Graham
City Council members Angela Hunt and Scott Griggs, opponents to drilling on parkland.
City Manager Mary Suhm made secret promises to Trinity East, but that was just fine with most City Council members.
Sam Merten
City Manager Mary Suhm made secret promises to Trinity East, but that was just fine with most City Council members.

Yet, by the time the City Council was briefed on the 8,000 acres Dallas planned to lease out, the message for Trinity East must have looked muddled, to say the least. In PowerPoint slides, city staff noted on two separate occasions, "There will be no drilling on city parkland."

The council was reminded, though, that the yearly budget was banking on gas drilling money.

"You'll remember that when we approved the budget, we approved the budget that included $20 million worth of revenues that were necessary to balance the budget that came from the oil and gas drilling," then-Mayor Tom Leppert told the council.

"We're six months into the budget now," Suhm picked up, "and it would be difficult to be able to make up this money."

There was little doubt the city wanted to develop its resources, but the question any driller should have been asking themselves by now was: How? Especially when Mark Duebner, the city staffer heading up the natural gas effort, assured the council that the leases the city was prepared to sign would not guarantee Trinity East and XTO the right to drill.

And when the Park Board met the following June, board Vice President Delia Jasso (who is now a council member) put forth a motion to approve subsurface drilling on parkland, but with one big caveat: Drilling on the surface of parkland should be prohibited. As Trinity East's managers would later note, the best places to drill — the most isolated, unpopulated, out-of-sight tracts, perfect for a battery of blaring diesel generators and glowing derrick lights — were on undeveloped stretches of parkland! But the drumbeat against it only got louder.

Later that month, then-Councilman Mitchell Rasansky sought further assurance that the surface of city parkland would remain unmolested. He didn't exactly get the answer he was looking for.

Yes, then-Park Director Paul Dyer said, but also no. There was one other property Trinity East was considering for drilling. It had been leased by radio station KVIL to site a tower that distributed its broadcast. Ownership had since reverted back to the city. It was a wild parcel behind the L.B. Houston Golf Course driving range.

"Well, that means it will come back to council, if there will be?" Rasansky pressed. "The city of Dallas has taken great efforts to ensure that none of the surface level will be disturbed."

At that point, Duebner, the lead city staffer, spoke up. He said they had only recently learned from Trinity East that the city owned the radio tower tract. It wasn't in the lease yet, he added, and would have to come back to the council for approval.

But it never did, and instead the tract quietly made its way into the final contract, much to the relief of Trinity East.

No one bothered to mention to council that in some quarters, drilling on the radio tower tract was a foregone conclusion. The deal Trinity East managers made with the city, they say, hinged on it. The company's plan didn't work if there weren't enough drill sites. "We made it a condition that we have drill sites before we would close on the lease — drill sites on the city land," Fort said. "The radio tower tract was critical, and it was a point of discussion, and it was a condition to our taking that lease."

On August 15, 2008, the day the city finally inked a lease agreement with Trinity East, Suhm signed a second agreement that wouldn't surface for another four and a half years — a single sheet of paper that could explain why Trinity East was so very copacetic while much of City Hall characterized central aspects of its drilling plan as unconscionable. Far from pledging to shield city parkland from drilling, Suhm was "reasonably confident that Trinity East can be granted the right to use the 22-acre tract referred to as the radio tower tract ... as a drillsite location ..."

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13 comments
fracquestions
fracquestions like.author.displayName 1 Like

Brantley, you did a pretty good job of describing the whole enchilada and detailing why TE has no legal RIGHT to drill in parks and floodplains, but you missed the one key element that set the stage and brought us to where we are today. It is important to recognize who, among us, stood up in defense of clean water, clean air, clean soil, our health, our safety, our property values

The massive efforts of key environmental leaders including Raymond Crawford, Jim Schermbeck, Molly Rooke, Rita Beving, Peter Wilson, Jenny Land, Marc McCord, Jeff Jacoby, Cherelle Blazer, and others starting in mid-2010, who had educated themselves on the legal and technical merits of the issue of urban gas drilling, were the only impediment to drilling being allowed in Dallas. Without their monumental efforts drilling would have been approved and Dallas would already be reaping the same environmental degradation, health problems and descreasing property values that our neighbors to the west are experiencing today.

dallasdrilling.wordpress.com
dallasdrilling.wordpress.com like.author.displayName 1 Like

@fracquestions There are many Dallas citizens who spoke at countless planning commission hearings and city council meetings. While one or more may start the ball rolling, "it takes a village"to change their universe.

Vndallas
Vndallas like.author.displayName like.author.displayName 2 Like

jeez, fort worth has a shitty skyline.

WCGasette
WCGasette like.author.displayName like.author.displayName like.author.displayName like.author.displayName 4 Like

Interesting this:

[...]"They can make a profit, they say, but not if wells haven't been spudded by the expiration dates. There are ways, Blanton says, of "throttling down" production on a well, to extract less gas and wait for the prices to come back up. He knows they will. They always do. "But that's our decision," he said. "It's no one else's decision. Let us make those choices. It's not them with the money in it. It's not them with the exposure."[...]

The more we hear Mr. Blanton pontificate, the more we realize that it's quite possible he has no idea what he's talking about.  He told the Irving City Council on (March 20, 2013) during a round of questioning that the gas from the University of Dallas-City of Dallas Lease at 3400 Tom Braniff was going to the Dr. Pepper Bottling Plant in Dallas. We think maybe he is throwing up a lot of the smoke and the mirrors. 


And since when are drilled, producing wells "exploratory"?  The smell of rotten eggs is not coming from the gas.

Katarina
Katarina like.author.displayName like.author.displayName like.author.displayName 3 Like

Trinity East needs to diversify.  The rest of the world is going solar, and very successfully.  Since this area of the country has more than 200 sunny days a year, it's time to forget about fracturing and start building solar panels.

cjbwalton
cjbwalton like.author.displayName like.author.displayName like.author.displayName like.author.displayName 4 Like

Great article, but may I point out one statement which I very much doubt has any basis in fact?

"Trinity East spent planning, preparing, consulting, chasing down a paper trail at the appraiser's office and leasing more than 10,000 acres of private and public land in Dallas County, from Irving to Farmers Branch — a mosaic of mineral rights in which Dallas city property was simply a large piece of a much greater whole — the figure was easily four times $19 million."

$76 million? Really? With 25 years of experience in oil and gas work, I have to wonder where that money was spent. Not into personnel with only one floor of employees. Not into title work as what could be cleaner and easier title than municipally owned minerals? Not into well site preparation, no well sites have been approved. Likely not into environmental site assessments as the possibility of drilling has never been near. Perhaps there were suhm city kickbacks, but with the frequency that Trinity East threatens litigation, I'd better not suggest that.

It sounds like they are big gamblers over at Trinity East. Not all gambles pay off - this is especially true in the oil and gas business. This was a questionable $19,000,000 gamble. At $76,000,000 it just looks like idiocy. 

By the way, if the company is out of money and experiences any more well casing failures, will they be well enough funded to handle the clean-up? 



fracquestions
fracquestions like.author.displayName 1 Like

You raise a very important question - if TE does have a major problem will they be financially able to handle it, or will they simply bankrupt that small part of Keystone, walk away from the cleanup and let citizens pay for their mess?

I, too, wonder if they really have spent $76 Million because I doubt they ever had that much money available to spend, but that would depend upon how many acres of private land they leased and at what price. No doubt they spent well over $19 Mil, but $76 Mil does not sound plausible to me, either.

cjbwalton
cjbwalton

Trinity East is an LLC for just that reason.

cjbwalton
cjbwalton like.author.displayName 1 Like

Trinity East is an L.L.C. for a reason. The reason is to limit their liability.

fracquestions
fracquestions

@cjbwalton Exactly, and they will not hesitate to use that out if they deem it necessary, just like H. Ross Perot did on that $19 Million office tower he was building on Cole or Travis several years ago. Corporations are always willing to let the common people subsidize and socialize the costs of their failures.

director21
director21 like.author.displayName like.author.displayName like.author.displayName 3 Like

Part 3 of 3

Trinity East gambled that they would get their permits and drill without citizen opposition. They were wrong. CEO Blanton and President Fort are both attorneys, and they are aware of the language of the leases they negotiated and signed. They KNOW that drilling is prohibited in parks and floodplains. If they chose to pay the money and risk being denied permits to drill, then they did so knowingly and with forethought of action. Their timing was very bad! They ran into an obstacle that did not block drillers in Fort Worth, Arlington, Grand Prairie, Mansfield, Colleyville or other places across the Barnett Shale.

Unfortunately for Trinity East, neither the City Manager nor the Mayor has the right to sign away the police powers of the City of Dallas. Sadly, our inept City Attorney, who has already tendered his resignation (or retirement, as it were) has failed to so advise the City Council and City Manager of that fact. He is up to his neck in this charade, and he is trying to save face by siding with the Mayor and City Manager. The fact is, they ran into citizen opposition that was (and still is) far more knowledgeable about this matter than they were, are or ever will be because we chose to take the time and make the effort to educate ourselves and understand the issue inside and out. THAT is the difference!

director21
director21 like.author.displayName like.author.displayName like.author.displayName like.author.displayName 4 Like

Part 2 of 3

At the time those leases were signed there was almost zero public opposition anywhere and absolutely no opposition in Dallas because we knew little or nothing about the matter. It had not even been considered. Once we heard about it a rather literate group of us formed to educate ourselves, educate our fellow citizens, educate our elected and appointed leaders and mount a formidable opposition to drilling in Dallas. Regardless of what anybody else says, we have been successful specifically because we HAVE learned the facts and we HAVE told the truth, which is much more than can be said for industry or city government officials. And, because of our knowledge and preparation we have prevailed without the benefit of funding, support or organization. Ours has been truly a grassroots campaign to defend ourselves, our fellow citizens and our city against the invasive and destructive practices of gas exploration and production in a densely populated urban area.

What started as just a few concerned citizens has grown to several hundred concerned citizens in Dallas, and now we are being joined by hundreds of concerned citizens in neighboring communities who also want to protect their environment and the health and safety of themselves and their children. Drilling in parks is insane. Drilling close to a school is unconscionable. Only people lacking integrity and humanity would even consider doing that - or allowing that!

director21
director21 like.author.displayName like.author.displayName like.author.displayName 3 Like

Part 1 of 3

Great article detailing what has transpired on this issue over the past 5 years! Thanks, Brantley, for doing your homework. The key element that people need to take from this story is found on page 4, and is cited below:

"The contract said Trinity East understood that it had to get a special-use permit from the City Council to drill — a "police power that cannot be contracted away." The contract hedged the same way about drilling the Trinity River floodplain, which would first require an amendment to city ordinance. The contract Trinity East signed said, at root, that they did not have an unequivocal right to drill."

Texas law says that a person cannot legally sign away their rights under the law, even willfully. By the same token, a city cannot sign away its police powers, even if the City Manager wants to do it, and so the right of the city to establish restrictions and limitations on what a business is allowed to do within city limits is established in law, and cannot be signed away. Signing a contract that attempts to sign away the police powers of the city results in a contract that is null and void or voidable, in part or in whole, when challenged in court.

 
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