In the absence of County Judge Barbara Shaw, County Judge Pro Tem James Rosales presided over the July 31 meeting of Commissioners Court, at which the court approved a $9,500 road use agreement fee, a $1,500 per bore site oil and gas permit fee, a $500 fee for commercial driveway entrances connected to county roads and a $500 pipeline permit fee.
The fees were all implemented in an effort to raise funds for the repair or reconstruction of county roads and bridges that have been damaged as a result of heavy truck traffic involved with oil and gas well production.
At the Aug. 14 meeting of Commissioners Court, officials discussed rescinding two of the four items, but before the discussion began, two local residents weighed in on the topic during the public comments part of the meeting.
“I don’t understand, Barbara, considering rescinding the long sought after well permit and road agreements,” Shanna Hall said.
Hall said that other counties have approved similar permits and have set precedents to follow. She said that DeWitt County is receiving $8,000 per well, and have received $1.6 million in revenue so far through signed agreements with Pioneer and Petrohawk.
“Bee County has gotten Pioneer and Petrohawk to sign retroactively,” Hall said. “$9,500 per well. La Salle is following in the same format – $9,900 per well. It has inspired Dimmit and Atascosa Counties to follow the same models. District Engineer John Casey said it is amazing that something statewide hasn’t been done about this issue. The oil companies need to step up and make the playing field even for everybody. The companies should agree to pay because they need the good roads, too.”
“Some companies don’t like to be good citizens and they scream all the way to the bank,” Hall added.
Hall quoted state law that she said authorizes county governments to recover costs to repair damaged roads.
“Can you force them to sign it? No. But why on Earth would you want to rescind it? At least leave it there. You have companies like Pioneer and Petrohawk who want to be good corporations,” Hall said.
Maurice Yarter also commented on the same topic during public comments.
“It seems odd to me that Commissioners Court would rescind these permits after the first Commissioners Court meeting after they had approved them,” Yarter said. “It has come to light that apparently we have been threatened by an oil company – at least one. Another has said that what we are doing is illegal but apparently there is no court case, so apparently somebody is acting as an attorney and I don’t think they have that right if they haven’t been to law school.”
“I would ask that you table these items until those letters are made public and are referred to the Karnes County Attorney’s office, which has not seen them or talked to anybody about them,” Yarter said. “So somebody up here, probably the presiding officer and at least one commissioner, needs to talk to the county attorney and turn those documents over as soon as possible.”
Yarter then hand delivered an open records request to the county judge and county commissioners seeking copies of any documents from representatives of oil companies threatening the county or county officials with a lawsuit related to permit fees.
“Since this is such a hot item, let’s just skip to it,” County Judge Barbara Shaw said.
Shaw said that the reason the items were on the agenda was due to the fact that there were errors in the wording of the agreements and permit applications.
“We have not been threatened to be sued by anybody,” Shaw said. “We have had oil and gas companies come in and start calling after the permits were passed.”
Shaw said that state law allows counties to recover costs associated with damages to county roads and bridges, if the county can prove negligence.
“ConocoPhillips approached me first,” Shaw said. “ConocoPhillips says to date that they have donated $3.2 million to the county road and bridge department.”
Shaw asked Karnes County Road and Bridge Administrator Jeff Wiatrek to confirm whether or not the figure was accurate. Wiatrek said that the amount was correct and accurate.
“They said they fixed over 40 miles of road at $3.2 million,” Shaw said, “that’s without a permit fee or anything else. Is that correct?”
“Yes, ma’am,” Wiatrek responded. “They have fixed lots of roads in the county.”
Shaw said that Marathon Oil has also donated $1.5 million.
Wiatrek estimated that EOG has donated $2.5 million in material and labor.
Shaw said Pioneer has donated material and manpower, as well, but the exact amount is not known.
“A lot of stuff is being done for the county,” Wiatrek explained, “but the roads are also... in this type of weather... y’all need to realize that the roads are getting destroyed just as fast as they are being built.”
“But there seems to be some kind of belief that we have not gotten anything,” Shaw said. “I’m up to $6.7 million,” Shaw said, totaling the discussed list of contributions.
County Commissioner James Rosales said that the work is not just for the benefit of the county.
“All this help that we are getting is very much appreciated,” Rosales said. “It benefits the county, but it benefits their trucks, too... They put it in there, and it is very appreciated, but they tear it back up.”
“We’re at $7.2 million, and that’s not everybody,” Shaw said, continuing her tally.
Shaw said she called DeWitt County Judge Daryl Fowler and Fowler said that in DeWitt County, BHP and Pioneer gives a $800 voluntary contribution and there is a $500 pipeline fee.
Shaw said that Fowler said that counties have no authority to enforce the fees. The Bee County judge, Shaw said, reported a total of $38,000 in fees collected from Pioneer, but Petrohawk and Talisman have refused to enter into any agreements.
A letter was then read by Shaw, which she said was the only letter received in regard to permit fees and road use agreements. The letter was dated April 3, 2012 and was sent from the Texas Oil and Gas Association. The letter said Texas counties do not have the statutory or other legal authority to require oil and gas operators to enter into road use agreements.
According to Shaw, several county judges plan to address the issue with the Texas Legislature in an effort to change the law so that counties receive a share of the severance tax currently paid to the state for us in road and bridge repairs and reconstruction.
“When you bring up negligence?” Shaw asked. “When you say the county judge has that authority? You better prove to me that we actually have some kind of negligence to file with. Because I am not going to file against somebody or do something to somebody – I will not sue somebody just to sue them. That’s not going to happen. The term is “negligence.” Because your car is heavier than mine, are you negligent?”
Commissioner Rosales said that it is negligence when oil and gas operators intentionally travel county roads and cross county bridges carrying loads in excess of the capacity of the roads and bridges.
Rosales then read the section of state law that provides counties with the authority to recover damages under such circumstances.
Commissioner Carl Hummel said to keep in mind that the amounts donated for road repairs are from the oil companies themselves, and may not necessarily reflect the true cost of work done.
“I don’t have a good handle on this because I haven’t measured the depth of the material or the width and the length,” Hummel said. “If you have collected $7 million in material, maybe you have $14 million worth of damage. I just really don’t know.”
“If it is voluntary,” Shaw said regarding the permits and fees, “and we can not enforce someone to sign a permit, we need not walk in saying we can enforce it – we need to let them know that it is voluntary.”
“It’s a voluntary thing,” Commissioner Tracey Schendel said. “We can have a permit, and leave it in play, but we can’t enforce it. We can only go by what they want to do.”
Schendel said the items were placed on the agenda in an effort to correct numbers that were backwards in the agenda items approved by the court on July 31.
Commissioner Hummel questioned whether the county judge’s financial interest in a business related to the oil and gas industry is influencing her position on the issue.
“I know you are in the trucking business – you and your husband are in the trucking business and in the oilfield business, and you siding totally and solely with them.... It doesn’t look proper,” Hummel said.
“That has nothing to do with anything,” Shaw said. “You are very concerned about my personal life and it has nothing to do with the court and has nothing to do with roads.”
Commissioner Rosales said he would not vote to rescind the fees approved by the court on July 31.
“We are the leaders of this community and I respect the oil companies, but if we show weakness... then we are showing that the whole county is weak,” Rosales said. “I will not rescind this but I will come back and amend it to redefine the terms to have some kind of mutual understanding with these oil companies that they can not just come in and fix the road one time, because it benefits them, too.”
“We need our roads fixed,” Rosales said.
Commissioner Pete Jauer said he knew when he voted for the agreements that Marathon and Pioneer would not sign them.
“If the language in these things is not correct, I think they need to be examined, they need to be rewritten in proper language so that it does state that it is voluntary,” Jauer said. “I think we should rescind them, rewrite them and repass them.”
When asked how long it may take to revise the agreements, Jauer responded by saying that it should be done as soon as the county can get competent legal advice.
Assistant County Attorney Betty Yarter said that the permits, as written, will not become effective until Sept. 1, so there is time for them to be amended or revised before they go into effect.
After an extended discussion on the topic, county officials agreed to take no action on either of the agenda items at this time.
A press release sent to The Karnes Countywide by the Texas Oil and Gas Association (TXOGA) on Aug. 17 stated that a television news report inaccurately stated that TXOGA had threatened a lawsuit against Karnes County after the permit fees were approved by Commissioners Court.
“In April 2012, the Texas Oil & Gas Association prepared a reference memo describing current law with regard to counties’ authority to assess fees or require agreements with oil and gas operators,” said Deb Hastings, executive vice president of TXOGA. “The Texas Oil & Gas Association has not threatened to sue any county regarding transportation fees.”