1. Ordinance No. 880-B, Revisions to Chapter 9.5 of the City of Southlake Code, Article V – Gas & Oil Well Drilling and Production. Work Session

2. Presentation Summary of Changes based on Work Session discussion held August 2, 2011 Comparison with the Town of Flower Mound’s Ordinance Setback Survey (next meeting) Proposed Schedule Council Direction

3. Outcomes Direct staff on additions to the ordinance Direct staff on materials/information needed Set next meeting date

4. Section 9.5-222. Definitions Section 9.5-223. Variance Procedure Page 1 1. Drill Site – clarified definition 2. Fresh Water Intermittent Stream – added term 3. Fresh Water Perennial Stream – revised definition 4. Fresh Water Pond or Lake – added term 5. Revised language regarding variance requests 6. Provided consistency throughout ordinance when referencing “drill sites”

5. Section 9.5-223. Variance Procedure Section 9.5-233. Seismic survey Section 9.5-234. Application and review of well permit Page 2 7. Revised language to provide consistency throughout the ordinance when referencing “gas and oil” 8. Clarify variance request procedure 9. Added language to provide insurance with seismic testing 10. Added requirement to provide more specific details to staff regarding scope of seismic survey 11. Added language to allow the City an option to engage third party in application review process 12. Revised requirements regarding the submission of MSDS materials

6. Section 9.5-234. Application and review of well permit Page 3 13. Added language to provide submission requirements for the noise plan 14. Revised language to clarify “site” 15. Revised language to clarify “site” 16. Added requirement for specific type of irrigation

7. Section 9.5-234. Application and review of well permit Page 4 17. Added “completion” phase to the required evaluation list regarding the submission of a leak detection and compliance plan 18. Added language to provide consistency between application requirements and on- site operation requirements. Also added a requirement for traffic impact analysis

8. Section 9.5-239. Periodic reports Section 9.5-242. On-site operation requirements Page 5 19. Included “completion” phase to requirement for quarterly extended gas analysis report 20. Added language to clarify standards regarding the masonry perimeter wall and what may be visible from adjacent property 21. Revised language for air testing requirements to provide more specific details

9. Section 9.5-242. On-site operation requirements Page 6 22. Added language to include blowout prevention equipment such as downhole preventer valve and a blind shear ram. Also added language to address loss of well control 23. Added language to provide consistency between the definition and the text

10. Section 9.5-242. On-site operation requirements Page 7 24. Revised language to require compliance with City established dust suppression regulations 25. Added language to address loss of well control in the emergency response plan requirements

11. Section 9.5-242. On-site operation requirements Page 8 26. Added language to encompass all possible nearby water ways 27. Revised language to be more specific regarding water sampling 28. Added “HAP” to list of compounds for testing 29. Added language to include downhole preventer valve when testing surface casing 30. Revised language regarding thermal oxidizer

12. Section 9.5-242. On-site operation requirements Section 9.5-244. Workover or re-working of well; notice Page 9 31. Pending discussion regarding 24/7 security guard requirement during production phase 32. Revised language requiring security cameras once temporary fencing is in place 33. Added requirement to include tracing or tagging additives into fracturing fluids

13. Flower Mound Ordinance Flower Mound’s changes focused on the following areas or issues: Notification Emergency Response Plans Insurance Landscaping Monitoring Noise Setbacks Variances Traffic Fracturing Hazardous Materials

14. Flower Mound - Notification Administrative Approval Public meetings and notice on possible pad sites that may qualify for administrative approvals Once oil & gas inspector determines application meets all ordinance requirements for administrative approval, within 30 days, notice of pending permit approval delivered to all property owners within 1,500 feet

15. Southlake – Notification Public Hearing – SUP 1,000 feet from the parcel surrounding the pad site, transportation route or pipeline route SPIN, Web Site (Gas 411)

16. Flower Mound - Emergency Response Plan Details submission requirements Details on all persons to be notified in the event of an evacuation, including, without limitation, all persons residing within one- half (1/2) mile of the edge of construction or surface disturbance. Within two (2) years of the effective date of the oil/gas permit and every two (2) years thereafter, the operator shall conduct an on- site emergency drill

17. Southlake -Emergency Response Plan Detail submission requirements Annual testing of the emergency plan

18. Flower Mound - Insurance General liability policy: $25 million per occurrence Excess or umbrella liability: $50 million excess and if no environmental pollution liability policy, $75 million Environmental pollution liability policy: $25 million Well control coverage: $5 million per occurrence with no aggregate, if available, otherwise $10 million Workers’ compensation/employers liability: statutory limits, employers’ liability with a minimum of $1 Million per accident Automobile liability: $1 million per occurrence

19. Southlake – Insurance General liability policy: $20 million per occurrence Excess or umbrella liability: $10 million Environmental pollution liability policy: $20 million Well control coverage: $10 million per occurrence Workers’ compensation/employers liability: $1million Automobile liability: $20 million per occurrence

20. Flower Mound – Landscaping/Screening Landscaping and vegetation complete within 45 days of completion of drilling of first permitted well Tree list Screen wall installed within forty-five (45) days following the completion of drilling the first permitted well or the derrick being removed.

21. Southlake – Landscaping/Screening Determined by the SUP Color Renderings Landscape Plan Irrigation Plan Line of Site Plan

22. Flower Mound - Monitoring Establish baseline data for air, water and soil monitoring Continuous air, water and soil quality monitoring (Leak Detection Plan) Continuous soil sampling for pits Venting or open flame restrictions: 1,000 feet, 72 hours notice Emissions compliance plan required if 2 notices of violation by TCEQ or EPA within 12 months

23. Southlake - Monitoring Establish baseline data for air and water monitoring Continuous air and water monitoring required Continuous air and water quality plan required to be submitted Leak Detection Plan required Vapor Recovery Systems required Venting not permitted

24. Flower Mound-Noise Noise mitigation required for drilling, fracturingand production operations Require establishment of daytime and nighttime ambient noise levels for the noise management plan Compression/production operations shall not exceed 3 db over ambient level No drilling, production or other operations shall produce a low frequency sound level that exceeds the following decibel levels: 16 Hz octave band: 65 db; 32 Hz octave band: 65 db; 64 Hz octave band: 65db

25. Southlake - Noise Basically the same except Southlake’s ordinance addresses pure tones Noise mitigation plan Mitigation measures must be outlined in the plan 3 rd Party Noise Engineer to evaluate plan

26. Flower Mound - Setbacks and Variances Residence/Habitable Structure 1,500’ from any residence or habitable structure; maximum 25% reduction with variance Schools, Religious Institutions, Hospitals or Public Buildings 1,500’ from any property line with school, etc.; maximum 25% reduction with variance

27. Flower Mound - Setbacks and Variances ESAs, Floodplain 750’; maximum 25% reduction with variance Public Road or ROW 750’ with no variance Existing Storage Tank 500’ with no variance

28. Flower Mound - Setbacks and Variances Property Line 750’; maximum 25% reduction with variance Public Park 1,500’; maximum 25% reduction with variance

29. Flower Mound - Setbacks and Variances Fresh Water Wells 1,500’; maximum 25% reduction with variance New Construction All new construction shall comply with applicable operation site setbacks/variances (Exception: pad sites permitted prior to ordinance effective date )

30. Flower Mound - Setbacks and Variances No permit issued unless USACE verifies to Town that pad site is not located within 3,000 feet of any federal public work (written approval provided) Private roads/drive – 20’ from property line

31. Southlake - Setbacks and Variances 1,000 feet from any habitable structure, or from the property line of any occupied public or private school or hospital 50’ – Tanks Variances approved by City Council

32. Flower Mound – Traffic Traffic Impact Analysis required Road Repair Transportation Routes

33. Southlake - Traffic Similar to Flower Mound’s requirements

34. Flower Mound - Frac/Haz Mat Notice of fracturing 3 business days in advance; posting of sign with white letters on red background. Only light sand fracture technology or technologies approved by the oil and gas inspector shall be used to fracture stimulate a well. The operator shall submit to the town a notarized letter from a hazardous materials.

35. Southlake - Frac/Haz Mat 20 day notification Green fluids

36. Setback Survey (Next Meeting) Discuss results of setback survey performed with neighboring cities What changes may be applicable for the City of Southlake?

37. Proposed Schedule Potential City Council 1 st Reading –October 4 th City Council 2 nd Reading –October 18 th

38. Questions?

39. Summary Spread Sheet –p. 1

40. Summary Spread Sheet –p.2

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42. Summary Spread Sheet – p. 4

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44. Summary Spread Sheet p. 6

45. Summary Spread Sheet –p. 7

46. Summary Spread Sheet p. 8

47. Summary Spread Sheet p.9