Drilling Through Peace and Property

Neighbors and activists fear gas wells are digging big holes in Fort Worth’s future.
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Posted November 29, 2006 by Gayle Reaves in News

Carl Fors wanted out. The noise and vibration from the gas well behind his house were enough to make the plates in his cupboard bounce.


The repeated loud screeches at night — like fingernails scraped down a chalkboard — sometimes made sleep impossible. A neighbor in the Chapel Creek area on Fort Worth’s western border described it as a piercing alarm clock that started going off in the middle of the night, but one that you couldn’t shut off. The worst noises stopped when the drilling was completed, but trucks and other heavy equipment operating on the well site continued to be a problem. Then they started building the gas compressor station several blocks away, which eventually added the powerful hum of its huge turbines to the noise. Before that was finished, the drillers were back again, punching another well that would shoot off in a different direction from the same site. And he had more of the same to look forward to, since drillers could come back again and again to drill in new directions.

So Fors called a real estate agent to put his house on the market. The person wasn’t interested. He called another one with the same result. The agents’ creed — location, location, location — explains why they weren’t interested in selling a house next to a noisy gas well. A third finally agreed to come out — and then told him they should wait until the drilling rig came down before they put the “for sale” sign up — “and don’t tell anybody about the well.” And, oh, by the way, he’d probably have to cut his asking price to 25 percent below the house’s appraised value.

Well, at least he’d get some relief on his property tax bill, he figured. Wrong. The Tarrant Appraisal District says houses are still selling in his neighborhood and that, in fact, developers are building more. There’s even a subdivision going in that’s closer to the well than Fors’ house is.

His neighbors were having similar problems. They’ve told Fors they had to turn on the radio or tv at low levels in their kids’ rooms at night, to provide a noise cushion so they could sleep. They worry about the fact that they see little security at the well site, and they worry about gas leaks or explosions. It makes Fors think about how the FBI tried to drive David Koresh out of his compound near Waco by blasting him with loud music.

“We have people in my neighborhood who have had it,” he said. “I’ve had people come to my door at night and say, ‘I’m going to take care of it myself.’”

In neighborhoods all over Fort Worth and in rural and suburban Tarrant County, the story is being repeated. People watch their quality of life being eroded by the same Barnett Shale gas boom that is filling city coffers and putting money in the pockets of developers, gas well drillers, the mayor, and plenty of regular citizens. And the worst part, perhaps, is that they feel powerless to do anything about it, especially when calls and pleas to city hall and the EPA and the Texas Railroad Commission produce no visible results.

Fort Worth’s drilling ordinance and what many see as a lack of enforcement of even its limited protections are not the only problems. Many homeowners feel betrayed by real estate developers and salespeople who they believe knew about planned gas wells and didn’t tell them, or who now tell them their homes have lost value. They see the value of their biggest investment, in some cases the place they had planned on living the rest of their lives, threatened, as well as their own safety and peace of mind.

And beyond that, they have been stunned to discover the jaw-dropping realities of Texas law, in which mineral rights trump the rights of surface property owners. Until a drilling crew arrives on their property or a royalty contract arrives in the mail, many don’t know whether they even own their minerals, much less what their rights are if someone else owns them. The “split estate,” as it is called, means that homeowners may have no recourse — and little hope of recouping much of their loss — if the owner of the mineral rights decides to sink a well on their land.

The situation is deeply confusing for the real estate industry, even for the majority of agents who act ethically in dealing with mineral rights and property near gas wells. (Is there any residential property left in Tarrant County that isn’t near a well or potential well?) Like their clients, many have never before had to deal with property where the surface rights are held by one person and the mineral rights by another.

Out around Eagle Mountain Lake, “You build a house and immediately behind it comes a gas well,” said one Realtor who asked not to be named. “If we know there’s one going in, we have to — morally, legally, ethically, we have to disclose that,” he said. “Needless to say, you wouldn’t find that real favorable, would you?” But real estate agents may have no clue as to who owns mineral rights on a piece of property being sold. And at the moment, standard contracts for single-family homes (as opposed to farm or ranch land) normally don’t even mention mineral rights. “It is absolutely confusing,” he said — and it’s something that the Texas Real Estate Commission is trying to address.

In northwest Tarrant County, where Sharen Hyde and her housemate Jeff Green have seen five wells go up in their multiple-acre-lot subdivision on Peden Road, they’ve come to realize that, since they don’t own the rights to the minerals under their land, they have little say in what could happen to their home, much less their neighborhood. Split estate, Hyde said, “is like tyranny.”

Green put it differently. It may be worth about $300,000, he said, but “this is a mobile home.”

“There’s a house for sale across the street from me, but no one’s even looking at it,” Sandra Wood said. “They look at the house and at the things towering over the houses, and they just drive away.”

On Royal Crest and Arnold drives in southeast Fort Worth, the gas well symphony plays in stereo. The neighborhood of mostly smaller homes, full of kids and bikes, is bracketed by gas wells. Not everyone is bothered by them, but plenty are.

“Those things are driving me nuts,” said Eric Carroll, 33, who lives almost on the edge of the wooded tract from which one of the wells looms, sometimes belching black smoke, lit like a spaceship at night, and always, it seems, noisy. “You can hear it all over my house — scree, scree … the metal screeching goes on all night long, it shoots all over the house.” He hasn’t complained, he said, because he figures the company is “doing something important there.” A laser distance gun shows the well to be slightly closer than the 600-foot setback decreed by the city council ordinance.


Wood and her neighbors said no one has offered them any royalties; they just get the royal pain of living near gas wells. She said her mentally retarded foster son was awakened about 3 a.m. by the loud beeping noises from the rig and thought it was the bus coming to get him, so he started getting dressed. Heavy trucks tear up the roads, and the torn-up roads then sometimes damage cars that must drive down them, she said. Try calling the city and asking them to pay to repair tires and shock absorbers ruined by hitting crater-sized potholes created by the trucks hauling pipes, rigs, and water on streets that weren’t meant to bear such loads. You can call, but you’ll get zip for your trouble.

“The trucks are coming in and out all night. And the lights are so bright. … They give you a number to call if the noise keeps you up at night, but by the time somebody gets here, the trucks are gone. Then they act like, what the hell’s the matter with you,” she said. “It’s just phenomenal. They’re destroying your life, but … you’re not getting any money.”

When she called the drilling company to complain about the noise, Wood said, she got a homily on how the drilling was “supporting our boys in Iraq” and that she should feel proud that she was helping. “How dare he say that,” she said.

Fort Worth Development Director Bob Riley said noise isn’t high on the list of violations that his four gas well inspectors have found in recent months. Unfenced open pits and unlined pits, lightning arresters that hadn’t been installed, and missing fences and gates were among the repeat problems cited in a letter that went out in October to all gas drillers in the city, he said. About two dozen verbal and written notices of violations were issued in the last two months, he said, but inspectors recalled only two that actually got as far as official citations — including one for the storage of explosive materials at a well site.

As for noise, he said, his department does get a lot of complaints, but he didn’t remember any well operators being found in violation. A stricter noise regulation has been in effect only for a few months, he noted. “The industry has done a good job in trying to cut down as much as possible on [noise] complaints,” he said. “They don’t like ’em either.”

Wood and Carroll’s neighborhood, on the edge of Forest Hill, was one of those evacuated in April when a gas well in that suburb blew out and killed a worker. Gas drilling opponents say an expert had to be called all the way from Houston that time to shut the well down. It’s not a comforting thought for people who live between two of them, with only one narrow street leading out of the subdivision.

Real estate salespeople in Fort Worth don’t talk in terms of gas wells lowering property values, but they acknowledge that the wells can make it tougher to sell homes. “I don’t see [wells] as driving property values down” once the drilling process is completed, said Kay West, president of the Greater Fort Worth Association of Realtors. Nonetheless, she said, it’s important for agents to disclose to potential buyers anything they know about wells and plans to drill them.

Loretta DeHay, general counsel for the Texas Real Estate Commission, acknowledged that, “in most cases, a reasonable and prudent person would want to know” about the potential for gas well activity before buying a house and that a real estate agent’s failure to disclose the information could constitute a breach of ethical rules set out in state law. “Most people would want to know of drilling on the property or maybe next door,” she said. “But the farther away it gets, the less significant it is.”

The Tarrant Appraisal District, looking at examples in the Royal Crest area and Chapel Creek and in the northern part of the county where Hyde and Green live, didn’t find any patterns of property values decreasing.

“We don’t predict the market, we follow it,” said Vicki Willkie of TAD, who manages residential property appraisals in the northwest part of the county. TAD appraisers look at prices that nearby homes have sold for, she said — not at what is allegedly happening with properties that aren’t being sold. The general acknowledgement by agents and owners that a house is tougher to sell with a well next to it doesn’t translate automatically to changed values, she said.

In the Royal Crest area, she said, property values appear to have remained generally the same for the last three years, although she noted that the two wells there have been drilled since the last time TAD reassessed the neighborhood. “It’s not like the well is next door” to those homes she said, although it actually appears to be slightly closer than the ordinance allows. Values have also have remained generally the same or slightly increased in the Chapel Creek and Peden Road areas, she said.

“So far we have not seen any data to suggest that we need to treat property next to gas wells any differently,” she said.

Findings like that make people in the affected neighborhoods roll their eyes in frustration. Fors points to his own difficulties in trying to sell his house. Hyde said one lot next to a drilling site was formerly valued at $75,000 but is now listed as being worth $1. Another of her neighbors who wanted to sell was told to price the house “aggressively” — that is, to ask a less-than-top-dollar price for it from the beginning — because of the drilling and eventually sold it for $30,000 less than its appraised value.

“Your neighborhood is forever changed,” she said.

Robert West’s five acres and 3,200-square-foot brick house on Vista Ridge Circle were appraised by TAD at more than $300,000 until Chief Oil and Gas showed up. The drillers took about half of his property for their drill site, and West hired a lawyer to protest his property appraisal in 2004. TAD reduced his appraisal by almost half. However, the next year TAD jacked up the appraisal to $339,000. West realized he would have to hire a lawyer every year to battle the appraisals. “I pay taxes on the land that Chief Oil and Gas uses and has a big fence around it, and I can’t even use [it],” he said.

What would happen if every property owner affected by drilling began hiring lawyers to protest TAD appraisals and forcing similar reductions? The impact on local government budgets could be extraordinary.


Back in the Royal Crest area, Robert Brown, one street over from Wood and Carroll, has gotten an offer from a gas company to pay him royalties and a signing bonus on the well that he can see all too clearly in the field behind his house. “Those lights come right through my bedroom. Sometimes they have a bullhorn they’re talking on. … It wakes me up,” he said, even though this rig is more than 800 feet from his house. “You should see my living room at night when the lights come on, even when the blinds are closed. … They work late and early.”

He received the offered contract with the gas company only a few days ago. “I don’t know that I want to sign, to accept the money with all this going on,” he said. “I’m just afraid the gas is going to get out, and I might not wake up one morning. … My privacy and peace and quiet are more important than $300 a month.”

Don Young, the environmentalist and Eastside activist who has led the charge against gas drilling excesses, said that in the past couple of months, his phone has been ringing off the wall (and his e-mail filling up) with questions from people concerned about what drilling is doing to real estate values. “We raised the issue more than a year ago, but the city just blew it off,” he said.

Dorothy Milberger, a retired Realtor who lives in central Texas, came to Fort Worth to testify, during hearings held by the city’s gas drilling task force; she’s had her own bad experience with a gas processing plant near her home. She was concerned that she heard no local real estate salespeople talking about the potential for “property devaluation, homeowner rights without minerals,” and related problems.

“Realtors have always known that location greatly affects the price of a property. To think that the gas drilling in the city of Fort Worth will not affect residential home values is doing a disservice to themselves and their customers,” she said.

Gary Hogan, who lives in the Chapel Creek area near Fors, served on the task force. It wasn’t an experience that made him feel good about where Fort Worth is headed in the clash between neighborhoods and the gas industry. He fought for a 1,000-foot minimum buffer zone between homes and wells, but the 300-foot minimum that the developer-oriented task force was considering got raised to 600 feet only after the fatal Forest Hill blowup. Exceptions in the ordinance left plenty of wiggle room for drillers to skirt around even that minimum distance.

Hogan, based on what he sees in his own neighborhood and what he learned while serving on the task force and since, believes the city, in allowing wells to be drilled as close as 600 feet to subdivisions — and in many cases much closer — is setting itself up for a widespread devaluation of properties in years to come.

Not only is it a myth that the effects of gas wells are gone after a couple of months when the drilling is complete, he said, but the city is also allowing homes to be built all over town that are much closer to wells than 600 feet.

Hogan said that when he was on the drilling task force, he wouldn’t agree to anything less than the 600-foot minimum separation between wells and homes because “nobody should live closer than me [to a well], and I live too close.”

But the well that’s close to 600 feet from his back fence, and that regularly sounded alarm-clock like noises in his house when the drilling rigs went up twice in the last two years, is a distant neighbor compared to the close-up-and-personal view of it that some of his future neighbors will have.

“We’re building homes all over Fort Worth … that will be within 200 feet of a gas well,” he said. Even though the ordinance sets 600 feet as the standard minimum clearance from a well, Hogan said, he was told that that wouldn’t affect plats that were already coming in near existing wells before the ordinance was adopted. Additionally, there is a mechanism by which home developers and builders can work out arrangements for homes to be closer than that.

“I asked, what do we do about all these plats that are already coming in to build at about 200 feet? I was told we can’t go back. So we’re already saying we’re devaluing their property and putting them in a hazardous situation.” As a comparison, he said, when the Forest Hill incident happened, the plume was blowing 300 feet from the wellhead.

Hogan worries a lot about the danger that residents of those houses will be in — not so much during the drilling of the wells as afterward. Considering what he learned on the task force, he said, “I believe this industry can drill a Barnett Shale well safely. My fear is that, according to all my research, 8 of 10 accidents happen after drilling — they are man-made accidents.”

Hogan said the developers themselves have acknowledged the undesirability of living next to the gas wells, in some cases, by plotting the smallest lots in their subdivisions in those locations.

At his house, he said, he’s called in noise complaints four times. “This one [well] had sound mitigation, but not enough,” he said. Based on the sound pollution he’s endured from about 600 feet away, he shudders to think what those who live closer could go through — and not just once but several times, potentially.

Fors, who teaches radar certification and sells training videos for police officers, is also knowledgeable in measuring sound levels. He monitored noise levels at his house when the wells were being drilled behind it and said it not only exceeded the city’s regulations, but sometimes exceeded federal standards for safety.

And, Hogan said, drillers “keep coming back.” They are allowed to drill numerous directional wells from roughly the same spot, he said. Beyond that, “the wells need routine maintenance. And every three to five years, they can bring in 12 to 24 diesel trucks” carrying water “to refrac that well to make it flow again. It takes about a week.” “Fraccing” is the process used in the Barnett Shale formation to free natural gas embedded in shale by hitting it with tons of water.


His wife, Brenda Hogan, added that long after each well is drilled, heavy trucks are still coming in and out.

“That site is never vacant,” she said. “Trucks are in and out of there all the time.”

Hogan said that, when he was lobbying for a bigger setback for wells, “I was told I was un-American. Who am I to tell people where they can live? … They said, let the market be the judge. I said, OK, we’re going to have an informed marketplace.”

Hogan said he tried to get the task force to recommend that real estate agents be required to tell prospective buyers, in writing, if a home was within 600 feet of a planned gas well. “I was told by our city attorney that to do that would require state legislation,” he said. So he settled for a requirement that drillers file a notice in the deed records of surrounding properties whenever a drilling permit is received — filed “where most people will never see it,” he said.

Beyond the wells themselves are the problems caused for residential areas by other gas industry projects, like compressor stations and pipelines. Compressor stations include huge box fans that pump pressure into the gas well lines. “It’s like having two diesel trucks” operating, plus the whir of the fans, he said.

Hogan, like Green and Hyde north of town and Wood and others in the Arnold Drive area, fear the long-term implications of perhaps as many as several thousand wells (there are already more than 500) being drilled and redrilled and maintained near Fort Worth neighborhoods in coming years — especially ones where the houses are as close as 200 feet.

“I might be a preacher of doom,” Hogan said, “but I think these neighborhoods are going to be a blight on the city.”

Go in any direction out of central Fort Worth, and it won’t take long to sight a gas well — and that’s just the ones where the drilling rigs are still up. Head up Boat Club Road, or down toward Joshua, or out to Azle, and the towers are up everywhere. Nowhere else in the country is drilling affecting a major metropolitan area the way it is in Tarrant County.

Unfortunately, the learning curve — for homeowners, real estate agents, lenders, public officials — is about as steep as the angle of those drilling rigs. Homeowners are finding out, sometimes too late, that there’s a gas well going in just over the rise and what that really means. Landowners are finding out that a drilling company surely can come onto their property and drill without their permission. Real estate sellers are wading through murky territory about what sales contracts should say and what information should be included. And even the drillers are still refining their “frac” methods.

Fraccing “is brand new technology,” said Judon Fambrough, senior lecturer and general counsel at the Real Estate Center at Texas A&M University. “This is the first time we’ve ever had [gas production from] shale in this magnitude.”

Finding out about the limited rights that surface property owners have compared to mineral rights owners is perhaps the biggest shock for many people. In Texas, “the law is clear,” Fambrough said. “The mineral estate is dominant over the surface [owners] when it comes to mineral exploration and production. That precedent was set probably over 100 years ago.”

Even considering the question of mineral rights at all, when dealing in single-family home sales, is new for the real estate industry. One local agent said such rights aren’t even covered by the standard home sales contract. DeHay, the Texas Real Estate Commission general counsel, said a committee of the board is looking into the possibility of changes to address the question.

Generally, Fambrough and others said, if sale documents don’t otherwise specify, the rule is that a sale of property includes the mineral rights — so you might own them even though your deed says nothing about them. But did the guy who sold you the property own them in the first place, so he could pass them on to you? In many cases, answering that question requires hiring a “landman” to go down to the courthouse and research the records.

Fambrough also said that, although Texas case law gives mineral rights owners the right to do what is needed to get access to the minerals, cities can indeed limit drilling by ordinances.

As for drillers coming back over and over to a single site to drill new directional wells and then to refrac, he said, homeowners may have a legitimate concern. “I suppose only time will tell” whether their concerns are valid, he said. “There are more questions than answers here.”

That’s why Hyde and Green have made repeated trips to Fort Worth City Council and to the Texas Railroad Commission in Austin: They want to educate citizens and officials about the realities of gas drilling. They’re appalled by the ignorance of even state officials about what really goes on around wells during and after drilling. For instance, Green said, Railroad Commission officials said they didn’t know and couldn’t find out what was in the sludge left over from drilling operations because it was “proprietary information” to the drillers. So how could the people testing their water — which in their neighborhood is now so brown and nasty-smelling that most people have started drinking bottled water — know what chemicals to test for?

A local title company manager didn’t want to be interviewed for this story, she said, because there’s “too much confusion” on every front. Everyone involved in gas drilling and real estate matters, she said, is getting an education.

For his part, Fors is disgusted with what Fort Worth and the state are letting happen here. “The purpose of government is to protect the people who employ them,” he said. “It’s very clear to me that the priority of the majority [of people on the city council] is not the citizens who employ them but the developers and gas well operators.”

Staff writer Jeff Prince contributed to this story.

You can reach Gayle Reaves at gayle.reaves@fwweekly.com.

 

 


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