Denton Fracking Ban

Today I will be discussing this article, about the recently passed fracking ban in Denton, Texas. Although it isn't directly a real estate issue, it has an interesting side effect pertaining to real estate.

Denton is a town of about 120,000 people that sits 40 miles north of Dallas along I-35 and is the home of the University of North Texas. Before this new law, they had already banned new wells from being drilled within 1200 feet of houses in the city. This new ordinance, however, places an outright ban on all fracking activity within the city. The ban was passed with 59% of the vote, which came in response to environmental and safety concerns over the air and water effects of the drilling, as well as concerns about the waste disposal protocols used in the industry.

One of the interesting effects of this ban is that which it has upon real estate values. The article brings up the fact that the ban prevents mineral interest owners the right to gain value from their property, but the real estate effects goes beyond that, even. If somebody had been looking to sell their mineral rights to a drilling company, that deal is moot now, as there is almost no value in selling mineral rights within Denton city limits. Additionally, this devalues fee simple estates as well, as mineral rights can be taken into account when selling fee simple property. Overall, this has the effect of devaluing desirable property in Denton, and even making desirable property undesirable.

However, it must be stated that the future of drilling in Denton is still in question after this ban, and that's without taking into account the mounting legal challenges against it. For one, this ban only affects hydraulic fracturing, but not any other form of drilling. One of the authors of the ordinance was quoted as saying that drillers could revert to conventional drilling to get to the oil. However, it is my understanding that hydraulic fracturing is the only viable method of retrieving oil and natural gas from shale deposits, such as the Barnett Shale atop which Denton sits. So, I'm not entirely certain that is a true statement. That being said, it is also my understand that fracturing can be done several miles horizontally. Thus, in theory, new wells could be drilled outside city limits and then drilled horizontally into the city in order to get to deposits. I'm not entirely certain that's a possibility, but I would love to find out. I'm very interested in learning more about the mechanics of fracking and the future of the Denton fracking ban as it faces many legal challenges.