A small town on the outskirts of Dallas will leave a crucial decision to voters come November.
The city of Denton, in the heart of the Barnett Shale, will see an ordinance on the ballot banning hydraulic fracturing within city limits.
If it passes, it will thrust drillers into legal limbo, caught between local rules and state regulation. Still, this isn't the first time a city has banned hydraulic fracturing or oil drilling, and we're positive that more than a few legal challenges will follow this decision.
Unfortunately, some courts aren't very friendly to oil drillers either...
Just last month a jury in Dallas ruled in favor of a family in Wise County, Texas, also in the Barnett Shale, who claimed that local fracturing operations were causing a decline in health.
If an appeal by Aruba Petroleum endures the same fate, the company will be forced to pay the Parr family $3 million in damages.
And as for drilling in areas close to Denton, other companies will experience declines in production – even full stops in operation – as a result of future lawsuits and moratoriums against hydraulic fracturing.
Granted, larger players like Devon Energy won't feel the heat too much, but little guys like Aruba Petroleum, EnerVest Operating, and the Barnett subsidiary of Atlas Energy (NYSE: ATLS) will struggle against the “fractivists” fighting to stop them.
Luckily, there are plenty of other companies in Texas where the people have embraced the new technology and new wealth that comes with it – and this tiny Texas driller has been striking black gold all year.