BY KATHY WILLIAMS

HERALD DEMOCRAT

SHERMAN -- City councilors walked a tightrope between competing property owner rights and gave neighbors of an oil and gas drilling company some protections on Monday. At issue was whether to allow hydraulic fracturing to drill a well in a residential neighborhood in the 7200-8300 blocks of U.S. Highway 75 and in the 500-600 block of Shepherd Road.

Because EOG Resources Inc., once Enron Oil and Gas Co., needed a specific use permit to drill in an area zoned residential, the Sherman City Council had the ability to add some conditions to state regulators' requirements. Neighbors, including their spokeswoman Penny Curtis, attended both Monday's meeting and the Feb. 15 meeting to request the Council either deny the request or attach conditions to protect their quality of life.

Oil and gas drilling in Texas is regulated by the Texas Railroad Commission and environmental issues that flow from such operations are regulated by the Texas Commission on Environmental Quality. The only control cities have over drilling operations is through their zoning ordinances. In this case, the area in which EOG Resources wants to drill is in a residential zone, so they need a specific use permit.

Sherman, like many cities, is looking at how to approach the issue. A new organization, the Texas Oil and Gas Accountability Project, was launched last week in a conference call with reporters. The most intense debates on the topic are coming from communities like Fort Worth that sit atop the Barnett Shale. According to Earthworks, sponsor of Texas OGAP, that region produced $12 billion in oil and gas in 2008. The so-called fracking or fracturing process for drilling wells has brought accusations of pollution leaking into the air, water and soil surrounding the wells and their operations.

The process involves forcing water, sand and chemicals under great pressure into the earth to force out pockets of oil and natural gas. Texas OGAP has released a set of "best practices" its representatives told reporters they hope to get the Texas Legislature to adopt to regulate this type of drilling.

The Sherman Council will require the drilling company to not locate a well closer than 500 feet to a resident's property line. EOG Resources Inc. must also maintain a 24-hour complaint and response line, and adjust lighting so that it stays on the site and not shine on surrounding property. This will include all lighting but that required to alert aircraft to the location of the well operations, David Fry, land manager for EOG Resources Inc., agreed Monday. EOG also must indemnify the city against any harm or liability that might arise from the drilling operations.

Fry said the company also would agree to move its trucks and other heavy equipment up U.S. Highway 75 rather than the smaller Shepherd Road. Curtis lives on Shepherd Road.

The result was a unanimous vote to allow the specific use permit, with some protections in place for the city and the affected residents. But the vote required much discussion.

Curtis and her husband Dan had asked for greater measures to be taken to protect their water well and their peace and quiet. Penny Curtis said the 24-hour a day light and sound pollution will be hard to live with for the 45 days or more the drilling will take. Also, another resident, Shirley Hill, said outside the meeting that EOG's similar drilling operation near Luella proved to be a longer process than 45 days. She said they did the initial drilling, packed up all the equipment and lights and now they are back again.

"Evidently, now they are extracting all the oil they freed up with the fracturing process," Hill said in a telephone interview Monday.

Curtis, talking to the Council, said she had had a productive conversation with Assistant City Manager Robby Hefton and she was convinced the city staff had done its due diligence in terms of investigating the matter.

"I just feel we are at an impasse here," Curtis told the Council. "We don't feel like you are going to deny it, but hope that you might be able to put some restriction on it. You're representing me, not the oil and gas company. And you are representing the people of Sherman ... You will be making some of these decisions for council for years to come. These oil and gas companies, they do not really live here."

Curtis said she understands that such operations might bring some economic development into the area. She said Hefton's call was welcome, prompt and informative.

"But with the Council, we would like to feel like we are part of a team and we are communicating," Curtis said.

Sherman Mayor Bill Magers responded that teamwork and communication were the reason the Council had slowed the process Feb. 15 by tabling it and had invited the neighbors once again to speak at the meeting.

"We understand that the only guy in the neighborhood who wants an oil well in his yard is the guy who owns the mineral rights," Magers said. He added that Sherman has more than 100 oil and gas wells within its limits and that its ordinances seemed to have worked well in the past. Other councilors asked staff members to explain what types of testing they would be able to conduct and how much regulation authority the city has.

Curtis asked if the city had the resources and personnel to ensure compliance with the regulations regarding oil and gas well drilling.

Magers said that because of the number of wells already operating within Sherman, and no reported accidents, the city staff must have that ability.

Curtis said she remains worried that the Railroad Commission and TCEQ will be too busy to monitor EOG's operations.

Councilor Willie Steele got confirmation from City Engineer Mark Gibson and City Attorney Brandon Shelby that the city's ordinances follow the regulations set by the Railroad Commission and TCEQ.

Councilor Chip Adami got assurance from City Manager George Olson that regulations include liability insurance for the project.

Magers, after ticking off all the additional requirements from the city, explained to Fry, "You understand that we are under the spotlight here."

Adami told Curtis, "It's not just a matter of economics, you've got to consider that people have property rights as well. It's very difficult to be in this position to tell people what they can and can't do with their property."

Magers added that of all the issues the Council was considering, economic development's nowhere near the top. "But one of the things we have to consider is that in Texas, mineral rights trump surface rights every time. But we are going to do our dead level best to follow the law and protect the residents of Sherman."

Adami ended the conversation with an admonition to Fry, "Obviously, this is a sensitive issue and I just encourage you to be good neighbors."