Regulatory Reform

Texas Legislature Preempts Denton Fracking Ban

Texas-preemption

Last November, citizens of Denton, TX voted via referendum to ban the oil and gas well stimulation technique commonly known as hydraulic fracturing or “fracking.” The outcome was significant since the city sits on top of the Barnett shale play, the third largest onshore natural gas producing field in the U.S. Although a handful of municipalities and counties across the country have banned fracking or related activities, Denton is the first city with significant oil or natural gas deposits to do so.

Last year, ALEC briefly wrote about the lawsuits filed in Texas challenging the legality of the ban and suggested that the Texas Legislature may decide to act in 2015 in response to the ban. That possibility became a reality earlier this week when Gov. Greg Abbott signed into law legislation that would preempt local efforts to regulate a wide variety of drilling-related activities.

While ALEC does not maintain model policy specifically preempting the regulation of oil and natural gas extraction, ALEC does maintain preemption language for other issues such as pesticide use and other agriculture regulations, collective bargaining and minimum wage laws. The primary reason states may be interested in local preemption is to ensure a stable business environment that is able to promote economic development and job creation. Forcing employers to negotiate a “patchwork” of laws and regulations from city to city or county to county makes it significantly more difficult for them to conduct business within the state.

Texas remains, by large margins, the top producer of oil and natural gas in the country. This lofty achievement has benefited Texans greatly by providing the state with almost $6 billion worth of revenue in fiscal year 2014 through severance taxes.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and …

+ Regulatory Reform In Depth