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HomeMy WebLinkAboutGBA 2010-11-11 Minutes MINUTES OF THE MEETING OF THE GAS BOARD OF APPEALS OF THE CITY OF NORTH RICHLAND HILLS, TEXAS NOVEMBER 11, 2010 1. CALL TO ORDER The meeting was called to order by Chairman Tom Duer at 6:31 p.m. 2. ROLL CALL PRESENT Chairman Tom Duer Garry Cope Marty Kusmierski Randy Shiflet Kathy Luppy CITY STAFF Director of Planning & Dev. John Pitstick Asst Dir of Public Works Greg VanNeiuwenhuize Asst Chief Mike Rawson Fire Marshal Lt. Greg Lindsey Recording Secretary Gina Pastre 3. Approval of September 9, 2010 Gas Board of Appeals Meeting Minutes. APPROVED Randy Shiflet, seconded by Marty Kusmierski, motioned to approve the minutes from September 9, 2010. The motion carried unanimously (5 -0). 4. Update on Gas Drilling Projects in the City of North Richland Hills John Pitstick came forward and stated that we wanted to update you on the status of the gas wells. This information is on our website as well and we try to keep that updated. We now have 44 gas well permits on 6 different sites within the city. Some of these are pending and 3 of them you will be voting on tonight. We have 9 wells at Graham, 11 at Morrow Stevens, 10 at Birdville, 10 at Tarrant County College, 2 wells at Little Bear and 9 wells at Engler. We just received 6 permits this last week for the Engler Site. The Graham site is tied into a pipeline. That is the pipeline that runs through the old North Hills Mall property. There are 5 wells producing at that site. Morrow Stevens has 3 pending permits that you will be hearing today. Page 1 of 7; 09/09/10 GBA minutes The Birdville site has been doing active drilling and they are also building a pipeline connection adjacent to that. Tarrant County College has 3 wells that are active drilling. All of these are currently controlled by Chesapeake Energy. We will have a gas board meeting in December and Chesapeake will probably be bringing back a Power Point presentation on seismic. We will bring that back on December 9, 2010. There are seismic activities, Dawson Geophysical will be running thumper trucks throughout the city. We already have established well sites that are already drilling you may wonder why we would need to do seismic testing at this point. They tell us that by doing the seismic testing it gives a 3D picture of where the actual shale is so in future drilling at those sites they can be more efficient for getting in the middle of the shale. They can go longer and allows them to drill more wells. They drill several wells at each site but if they get an active seismic of where the Barnett shale is under North Richland Hills they can drill more efficiently. They can potentially drill 15 -18 wells at each site. They are actively putting in pipelines now and as you drive around town you may see survey stakes or you may see the crews. Marty Kusmierski asked if those were the pipes that are on Smithfield at Mid Cities? Greg VanNeiuwenhuize said yes. Randy Shiflet asked why they were doing the sound walls on those boring machines? Lt. Greg Lindsey said that those boring machines are somewhat like the rigs layed down flat and because of the Diesel motors that is their way of trying to mitigate any noise. You will see that some of the areas they won't have those if they are out in the open. Randy Shiflet said that they have one at Holiday and Mid Cities and then I saw one on Iron Horse also. John Pitstick said that this is the route so as you are driving around town you can see the route they are using. They are boring in a lot of areas and open cutting in some. There is a lot of crossings and we have already taken the agreements to Council. They are going through and under several of our park areas and Greg is handling the crossings and right of ways. Greg VanNeiuwenhuize said that across our rights of ways they are only boring they are not open cutting. Randy Shiflet asked if they had already put one pipe under the golf course? John Pitstick said yes. Greg VanNeiuwenhuize said that Enterprise Texas, TMGS which is Chesapeakes sister company is about to. They are 70 foot below the golf course. Page 2 of 7; 09/09/10 GBA minutes John Pitstick said that it is actually the same technology as drilling. It is a horizontal directional drill. It is not a bore it just a directional drill. Marty Kusmierski asked if all of these pipelines going to be this deep? Greg VanNeiuwenhuize said no. It is really expensive to go that deep but to go under the golf course and to go under Big Fossil Creek and the unknowns with the Loop 820 widening. TXDOT has some very strict requirements about how deep they should be and it is not something that you want to do twice. John Pitstick said that we are seeing a lot more activity and we had a meeting with DFW Midstream and it is sister company of Oncor. They use Oncor easements and there could be some potential for additional pipelines. We have tried to work hard to keep the pipelines away from sensitive neighborhoods and where they don't bisect major developable commercial areas. We have a good relationship with Texas Midstream and Chesapeake in doing that. Once we get some active drilling going then maybe we can get the board out there and let you see some of the sites. We want to keep the board informed of the whole process. Randy Shiflet asked if anyone has an estimate how long it would take to get the entire grid completed and connected? Lt. Greg Lindsey said no. Greg VanNeiuwenhuize said that he believes they would like to be completely done with our city by the end of next year. Garry Cope asked it that was 2011? Greg VanNeiuwenhuize said yes. Randy Shiflet said that what you see is so limited with just random spots here and there and didn't know that they had been under the golf course yet. John Pitstick said that it is kind of like the highway. Like Loop 820 you will see different pieces go at different times and then eventually they will tie everything in. Greg VanNeiuwenhuize asked if the TCC line was also on the map? John Pitstick said yes. The tying in of the TCC lines and you can see where they come together at Cardinal and Davis and that will be an above ground vaiving station. That will be pretty small, there won't be a compressor station. It will be a screened valve station where you see some above ground vaiving. There is another one in Watauga. Greg VanNeiuwenhuize said that we have one over by the old mall property. Page 3 of 7; 09/09/10 GBA minutes John Pitstick said that it is screened and you probably would never even know it is there. It backs up to the creek by the new medical office building. This information is all available on the website under planning and development for the gas well drilling. Tom Duer asked if we can get a copy of the updated wells every meeting. Is there a possibility of putting the day of permitting so that we can see the time lapse between when we approved it and now it is producing? John Pitstick said that we are giving you where it is in the process now. When they start producing is a critical date. If you recall in the regulations that once we issue a permit they have 180 days to drill. Tom Duer said that once they are permitted there isn't any leeway in that. John Pitstick said no. Once they are permitted the gas inspector can give them one 90 day extension after the 180 days. The masonry wall has to be up within 90 days of the first well being drilled. Garry Cope asked if this was the last of the planned ones for Graham? John Pitstick said no. I think they will continue to drill a little bit and after the seismic they may come back and reassess and as the gas prices go up there could be a lot of variables there. I think there could be 16 -20 wells at each of those sites potentially. Randy Shiflet said that with technology changing and now they are doing seismic so you can be more precise. John Pitstick said that another good thing about seismic is that right now they can drill 5,000 -6,000 feet out but with seismic and they know where the shell is they may be able to go further out like 7,000 -8,000 feet out and reach further areas. 5. GB 2010 -07 Public Hearing and consideration of a request from Chesapeake Energy Corporation for a deviation from distance requirements from existing structures to gas wellheads at the proposed Morrow - Stevens A 1 H, ASH, and B1 H gas wells located at 9201 Kirk Lane. Distance requirements are established in Section 104- 6 of the City of North Richland Hills Code of Ordinances. John Pitstick said that this is a variance request for 3 wells for Morrow - Stevens. We did notify everyone within 600 feet which is our community standard. If you are more than 600 feet from the well then there is no requirement for drilling. Any structure within 600 feet would require a variance from the Gas Board of Appeals. The only properties would be the Thornbridge South Addition. There are 3 homes and a barn that are affected. The distances are anywhere from 459 feet to 554 feet on those 3 residences. Matthew and Erin Burnett, Kelly and Robin Hancock, and a builder M & J Custom Design Homes were all notified. We have not received any letter and complaint from Page 4 of 7; 09/09/10 GBA minutes them. They have received variances before on similar wells. There is no requirement for formal letter of approval but as you get under 300 feet you would have to have a formal letter of approval. In this case there is no actual requirement if you recall the Morrow - Stevens well site did not have that 150 foot no build zone. Potentially a builder could come in and build and once that is there it would close that well site down. That is one of the issues that we have seen and we are encouraging them to try to finish drilling out this site because potentially we could have building there. Right now we haven't received any issues from that property but it has recently been platted and once we start to get buildings within that 300 feet then they would have to have formal approval from that property owner at that point. Staff has reviewed this and we have not received any complaints, issues or letters from any of the property owners and based on that we would recommend approval. Public Hearing Opened at 6:49 p.m. Scott Castaneda ,100 Energy Way, Fort Worth, TX 76102 came forward representing Chesapeake Energy. This evening I would like to discuss with you the Morrow - Stevens well site overview. I will give you a view of the transportation route, the economic benefits and our economic participation and outreach. This is a map of the City of North Richland Hills and it is showing the 5 active pad sites that we have currently. We have drilled 21 wells in the city and 7 of those wells are producing and 14 are waiting on pipeline. The Morrow - Stevens pad site is located on private property at 9201 Kirk Lane just west of Precinct Line Rd. We are seeking 3 well variances for the Al H, ASH, B1 H. We have a map of the units that we will be drilling for these wells that we have requested variance. In the Morrow - Stevens A unit we have drilled 3 wells and we have 2 more planned at this time for that unit. The Morrow Stevens B unit we have drilled 2 wells to date and we have 4 more wells planned for that unit. Now for the total pad site there are a total of 5 units but they just aren't shown here since we aren't asking for variances for those areas. Those units go down to the south and to the southeast and there is one on the outside of the Morrow - Stevens B toward the west. We are using the previously approved commercial route with the entrance and exit onto Kirk Ln. It brings us from 820 N onto Precinct Line Rd. and to Kirk Ln and then onto the pad site. Here are the setback radiuses from the wellsite, 150 ft, 300 ft, 600 ft. There are no protected structures within 300 feet. There are 4 protected use structures within the 600 ft radius. We have not received any objections at this point. Randy Shiflet asked if Amundson was a transportation route or if he was just identifying the road on the map? Scott Castaneda said that they are just identifying the road. Tom Duer asked if the yellow area is that the fenced area of the pad site. Scott Castaneda said yes. For the 3 well variances that we are requesting the key beneficiaries are The City of North Richland Hills, 470 residents and businesses and Birdville Independent School District. The potential economic benefit for these 3 wells include close to 5.3 million in local royalties, approximately 2.3 million increased tax revenue for the City of North Richland Hills and the State of Texas. More than 5.8 Page 5 of 7; 09/09/10 GBA minutes million to the local workforce and businesses. Right now we have proposed 20 wells for this pad site reaching all 5 units from 360 degrees around the pad site. We have 7 wells already drilled and and the 3 variances that we are requesting tonight put us about halfway there to complete the pad site as proposed. All units can access more than 1400 acres across the 5 units and the potential economic benefit of the entire pad site is close to 35 million in local royalties and approximately 15.6 million in increased tax revenue for the City of North Richland Hills and the State of Texas and more than 38 million to local workforce and businesses. Drilling in the city has allowed us to become active in the community that we work in. This allowed us to participate in the 4 of July Family Fireworks show and I am very happy to say that we are going to be a key sponsor in the Night of Holiday Magic this year. It has also allowed us to provide educational grants and scholarships to the schools in the area. We also pride ourselves in maintaining open lines of communication with neighborhoods by providing letters on activities and online updates at our website at Chesapeake.com. Once you go into the website and click on the Barnett Shale and go under the neighborhood page to North Richland Hills and choose the well. All up to date information will be on that page. We respectfully ask the North Richland Hills Gas Board of Appeals to unanimously approve the variances for the Morrow Stevens Al H, ASH, B1 H. At this time I would be happy to answer any questions. Tom Duer asked what is the actual tax base that the city receives? Scott Castaneda said that this is broke up into different areas. It would go into schools and into the city. John Pitstick said that it is difficult to determine. I have talked to the Tarrant Appraisal District manager. It is really complicated and an amortization schedule that over a 15 year period where they get taxed. In fact if you are receiving royalties you will be taxed on some of that. It is kind of a depreciating value over time. Tom Duer asked if it was taxed on the production of the well or the value of the well? John Pitstick said that it was taxed on the production of the well. Tom Duer said that he wasn't sure how the city received the tax other than in the instances like Little Bear Creek where the city owns the property. John Pitstick said yes but we also get property taxes for those as well. Public Hearing Closed at 6:57 p.m. APPROVED Garry Cope, seconded by Kathy Luppy, motioned to approve GB 2010 -07. The motion carried unanimously (5 -0). 6. Page 6 of 7; 09/09/10 GBA minutes Adjournment There being no further business, the meeting was adjourned at 6:59 p.m. Chairman Secretary 1 44 fr fr e Tom Duer Ka y Lup: Page 7 of 7; 09/09/10 GBA minutes