Trinity East's Vapor Chase

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

The commission voted to deny, and Trinity East's managers went on Christmas vacation knowing the hurdle had just gotten higher. But by the time everyone was back, Joe Alcantar, chairman of the Plan Commission, had moved for the body to take a second look at the permits, prompting outrage from opponents, befuddlement from fellow commissioners and an ethics complaint for an alleged breach of open meetings law. "It was an extraordinary procedure for the Plan Commission to reconsider a denial when there had been no apparent change in facts," Commissioner Ridley later recalled.

Extraordinary, sure. In Sally Wolfish's six years on the commission, she said she'd seen it happen twice. But it wasn't that extraordinary if you considered the fact that Alcantar was an appointee of Mayor Mike Rawlings, who was at the time warning that the city could face a lawsuit if Trinity East didn't get its permits.

"It's clear that there was a lot of institutional interest in having the Plan Commission approve these applications," Ridley said.

Trinity East's parent, Keystone Exploration, did have some experience both with getting stymied at the municipal level and in suing as a result. In December 2010, it sued Flower Mound when the town's oil and gas board wouldn't grant it an exemption to the town's stringent drilling ordinance. "Keystone filed in the district court and then nothing has happened," said Terry Welch, Flower Mound city attorney and a former member of Dallas' gas drilling task force. "I don't think they have the money to start fighting it."

But it wasn't just a question of money, Welch said. Would it even be in their best interest? "There's all kinds of case law about technical lease issues, but none about what is the power of a city to regulate gas drilling in corporate limits," he said. "There really isn't. So there is a lot of uncertainty and a lot of questions people don't know the answer to on both sides. Who wants to step up and be the test case?"

Or to suffer a precedent-setting loss, on either side?

There was also the matter of the lease renewal the company signed in 2011, which cautioned in crystalline terms that an unwieldy City Council — the municipal police power — could derail its plans. "When Trinity East signed this lease agreement originally, legally they weren't allowed to drill in parks or a floodplain," Councilwoman Angela Hunt said. "They knew that. They've been watching the city tell the Park Board and the public for months that there would be no drilling on parkland."

Apart from the alleged "breach" Cothrum referenced in his memo, Trinity East won't talk about suing the city.

Hunt, who was a commercial litigator before she joined the council, said she'd take the case any day. The mayor, on the other hand, was publicly fretting about the possibility, saying a "deal has been cut," but leaving the shape of that deal a mystery. It may have been Suhm's pledge to assist Trinity East that had him worried. Either way, that was about to be exposed to daylight. On February 6 the Observer obtained a copy of the agreement Suhm signed with Trinity East, pledging to help the company drill parkland while at the same time assuring the City Council that there were no such plans.

Three weeks later, the council convened so Suhm could explain, and so Hunt and Councilman Scott Griggs could ask questions. As it happened, they were the only ones who had any.


Even Suhm's practiced look of pained forbearance had to have been tested that day in City Council chambers. It was quiet in there, like everyone all at once held their breath — everyone except Hunt, who was at that very moment accusing Suhm of various acts of mendacity, committed mostly by omission.

Suhm tried to explain that she'd been tasked by the council with sniffing out new sources of revenue for the city. She tried to explain that in 2008 she was facing down a $90 million budget deficit. And that the city had maxed out its credit card on a $1.35 billion bond package approved by voters in 2006. And that, through all of it, she had managed to put that budget to rights without raising taxes, per Mayor Tom Leppert's instruction. That's what this hearing was for, after all. To let Suhm get it all out in the open, explain things. None of it mollified Hunt.

"You had every opportunity to clear the air on this, Mary, and we had to wait five years to get the facts," she said. "I'm telling you, I don't buy it."

She wasn't buying City Attorney Tom Perkins' legal opinion that Suhm was in fact within her rights to authorize the lease, either. "I believe we need an independent investigation on this to look at all the facts and make a separate legal conclusion about whether there was any wrongdoing."

Griggs said he found it troubling that a "side deal" was signed within five days of a council meeting where drilling parkland was understood to be verboten. "The difference is only five days," Griggs stressed. "Every single briefing made the point there will be no drilling on surface parkland. That represents a fundamental policy within the lease."

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13 comments
fracquestions
fracquestions

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.

Vndallas
Vndallas

jeez, fort worth has a shitty skyline.

WCGasette
WCGasette

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

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

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? 



director21
director21

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

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

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.

dallasdrilling.wordpress.com
dallasdrilling.wordpress.com

@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.

fracquestions
fracquestions

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

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.

 
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