On Thursday, April 30th, the Texas Senate Natural Resources & Economic Development Committee (Committee) voted to approve H.B. 40. As discussed in a previous post, H.B. 40 is a response to the fracking ban enacted by the city of Denton, Texas during the latter part of last year. The Committee voted unanimously in favor of the bill. If enacted, H.B. 40 would prohibit localities from enacting legislation governing oil and gas operations. In its current form, H.B. 40 would permit localities to adopt legislation regulating “surface activity that is incident to an oil and gas operation, is commercially reasonable, does not effectively prohibit an oil and gas operation, and is [not] otherwise preempted by state or federal law.”
H.B. 40 moved quickly through the Texas House of Representatives. In March, the House Committee on Energy Resources voted to approve the bill. A couple of weeks later, the House of Representatives voted to pass the bill. H.B. 40 appears to be poised to receive a similarly fast-paced approval by the Senate. H.B. 40 is sponsored by Representative Drew Darby.
Several detractors and supporters of the bill testified before the Committee. The detractors argued against the “commercially reasonable” standard of H.B. 40. According to the detractors, the “commercially reasonable” standard is too amorphous. In addition, some detractors suggested that the bill would result in the undoing of a number of environmental ordinances enacted by localities. Supporters for the bill stated that H.B. 40 was necessary because hydraulic fracturing and related activities need to be regulated by one entity.
Read H.B. 40.
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.
