On November 4th, Denton became the first city in Texas to enact a ban against hydraulic fracturing. The next day, several members of the oil and gas industry and the state of Texas sued Denton, alleging that the ban was invalid. It is possible that other parties are also planning on suing Denton over the fracking ban. Mendocino and San Benito counties may be following in Denton’s footsteps.
Mendocino and San Benito counties passed legislation on November 4th prohibiting hydraulic fracturing. A fracking ban was on the ballot in Santa Barbara county, but the ban was defeated. Observers have noted that unlike Santa Barbara, oil and gas operations in Mendocino and San Benito were not extensive. Thus, the impact of the bans is expected to be minimal. Mendocino and San Benito counties are not the only localities to adopt anti-fracking legislation. Several localities throughout California have enacted similar measures.
The anti-fracking measures will likely be challenged by oil and gas operators and landowners. It is possible that the state of California may also sue the localities just as Texas responded to the Denton fracking ban. The Western States Petroleum Association (WSPA) has already filed suit against the city of Compton’s fracking moratorium. In fact, although the lawsuit is still ongoing, Compton has withdrawn the moratorium.
The fracking bans can be challenged on several grounds. First, opponents of the fracking bans can argue that the local measures are preempted by state law. In 2013, California enacted Senate Bill 4—a bill that permits oil and gas operations to continue while the state studies the potential impact of hydraulic fracturing on the environment. State lawmakers attempted to pass a moratorium on drilling until the studies were completed, but the bill was defeated. Second, parties challenging the bans can argue that the anti-fracking measures constitute unconstitutional takings. The WSPA raised both arguments in its suit against Compton. Observers have noted that a takings claim brings the added dimension of a potentially significant verdict against the counties. Many argue that localities may rescind their fracking bans rather than risk incurring a large financial obligation.
Read Senate Bill 4.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
