As I’ve mentioned in a previous post, one element of Catholic social justice theory that I find very instructive is subsidiarity. If you’re interested in reading more about subsidiarity, here is a good primer. On the other hand, for the more visually inclined, here is a good short video on the concept:
In Texas, with a relatively conservative government, you would think that a concept like subsidiarity would come naturally. Just as the State of Texas wants the federal government to stay out of matters that Texas can handle on its own, it would seem logical for the State of Texas to stay out of matters that counties and cities can and should handle on their own. Afterall, Texas Gov. Greg Abbott emphasized the importance of local control in education during his 2014 campaign.
Hydraulic Fracturing Bans
Unfortunately, it looks like the most recent legislature has veered well off the course of local control on a few recent matters. On Monday, Gov. Abbott signed into law a bill banning municipal governments from banning the practice of hydraulic fracturing, also known as “fracking”, in developing oil and gas wells. Setting aside the merits of fracturing, the real question here is whether local governments should be allowed to restrict the use of land in their boundaries for activities such a fracturing.
No one wants to live next to an oil well, for the same reason that no one wants to live next to an steel mill, landfill or pig farm. They smell, make noise and/or are unsightly. Many cities in Texas have land use regulations, such as zoning, for this very reason. So what makes fracturing different?
Rightly, there are concerns about property rights. Keep in mind that under Texas property law, surface rights can, and often are, separated from the mineral rights. Just because you own the surface of your land and have a right to build on it doesn’t necessarily mean you own the right to pull valuable resources out from underneath the surface. It’s quite possible that the mineral rights in towns that have banned fracturing are owned by non-citizens – people who don’t actually live in the city. So saying “the electorate can choose to restrict the use of their own land” isn’t necessarily on point here.
Moreover, regardless of whether the mineral rights are owned by citizens of a particular city, there’s also the question of whether regulations substantially affecting the value of those mineral rights constitutes a “taking” under the Fifth Amendment to the U.S. Constitution. Specifically, the taking clause of the Fifth Amendment prohibits federal, state or local governments from taking private property for public use without just compensation. The problem, however, is that under current case law, a taking by regulation only occurs when the total economic benefit of a property right is taken. While fracturing may increase the value of mineral rights of a property, it’s not the sole means to extract hydrocarbons from a reservoir. Furthermore, even if there was a case for a taking, property owners have the courts available to them to obtain just compensation for their property rights that have been taken.
Ultimately, however, the question is whether state government intervention was necessary for the common good. In reality, it probably was not necessary. There are plenty of opportunities for drilling and development of wells using fracturing throughout the state, and the few cities that would ban it would be a small percentage of such opportunities. Property owners within those cities likely have legal recourse and still have the right to drill oil wells in general.
So what happened here? Oil and gas interests in the State of Texas are very powerful, and I’m sure industry lobbyists were quite persuasive. They probably weren’t concerned with Denton, Texas specifically – they were worried about sweeping movements throughout cities and counties in the state to undertake similar measures, as unlikely as such a prospect may be.
Bill Limiting Local Government Recovery in Environmental Lawsuits
House Bill 1794, a bill that caps the total recovery in lawsuits by local governments against companies violating state environmental standards, was recently passed by the Texas Senate and is headed to Gov. Abbott’s desk. As the Texas Tribune notes, the problem with the legislation is the impact it will have on the ability of local governments to make economic sense out of pursuing companies who pollute in those communities:
Under HB 1794, local governments and the state would evenly split the first $4.3 million awarded in a suit, and the state would pocket any amount above that limit.
County officials say the cap on local government collections would make it difficult, if not impossible, to prosecute the most complex, egregious cases of pollution, because contingency fee lawyers would not sign on for such lower pay.
The counties, not the state, typically initiate such actions, said O’Rourke, who has been prosecuting environmental cases since 1973.
“It is only by contingent fee litigation that you can prosecute global corporations that are operating in Houston – Harris County, he said. “You can’t attract people to that if you’re going to kill them with contamination.”
While this doesn’t eliminate the ability of cities and counties to sue those who pollute, it does seriously undermine the economics of doing so. While $2.15 million (the maximum recovery a local government entity could realize under this bill) sounds like a lot of money, environmental litigation can be extraordinarily expensive due to the expertise needed to successfully prosecute them.
If local governments have been more successful at pursuing environmental claims, the State of Texas should encourage such action rather than deterring it.
For a state that has extolled the virtues of local control, these recent measures indicate that the State of Texas is willing to claw back local control to suit its own (special) interests.