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HomeMy WebLinkAboutMinutes City Council - 09/30/1965 - SpecialMINUTES CITY OF CORPUS CHRISTI, TEXAS SPECIAL COUNCIL MEETING September 30, 1965 915 A. M. PRESENT: Mayor McIver Furman Mayor Pro Tem Jack R. Blackmon Commissioners: Patrick J. Dunne Assistant City Manager Marvin Townsend Dr. P. Jimenez, Jr. City Attorney I. M. Singer Ken McDaniel City Secretary T. Ray Kring Ronnie Sizemore Wm. H. Wallace Mayor McIver Furman called the meeting to order, and announced the purpose of the special meeting to receive and take whatever action is warranted on the report of the Bay Drilling and Platform Committee and to transact any other busi- ness as may come before the Council for action. Mayor Furman called for the report of the Bay Drilling and Platform Committee. Mr. Edward H. Harte, Chairman of the Bay Drilling and Platform Committee read and filed with the City Secretary the following statements: That the Committee met in special session at 7:30 this date and unanimously recommends that British American Oil Producing Company not be granted a permit to drill, nor should it waive any of its rights to regulate the well and its operation; that the Committee takes no position on the question of whether legal action should be taken by the City, believing this to be properly in the province of the City Attorney and the City Council; further, the Committee recommends that all leaseholders within that por- tion of Corpus Christi Bay which is inside the City Limits be put on notice that they will be subject to revised ordinances dealing with oil and gas operations in the Bay; that in connection with the application of Cities Service Oil Company to drill State Tract No. 52 #1, Corpus Christi Bay, Nuecea County, Texas, the Committee recommends that no permits be granted for drilling of any more State Tracts prior to October 18, at which time the Committee hopes to have more specific recommenda- tions. (Council Exhibit #65-5) Mayor Furman recognized the presence of Mayor A. J. Crow of Portland, and City Commissioners, E. Edwin Barker, Joel M. Yowell and J. M. Fay. Mayor Crow read and filed with the City Secretary the following statements: That on September 30, 1965, a Special Meeting of the City Council of the City of Portland was held and a Resolution was passed to the effect that the City of Portland recognizes that it does not have jurisdiction concerning permits to drill City of Corpus Christi, Texas Special Council Meeting September 30, 1965 Page 2 wells in Corpus Christi Bay, but that the Council wishes to recommend that wells are not drilled within a stated distance of the coastline along the residential area of Portland; further, that the City of Portland is participating in the proposed trip to California by sending its Mayor, after which a recommendation of the exact distance that wells should be kept from the shore, will be made; and further, the City Council of Portland recommends that the Corpus Christi Ordinance be amended to provide that a Public Hearing be held on all requests for Bay drill- ing permits (Council Exhibit #65-6) Motion by Wallace, seconded by Blackmon and passed unanimously that the report and recommendation of the Bay Drilling and Platform Committee be, approved. The foregoing recommendation that no permits be granted on any more State Tracts prior to October 18, 1965, was inparticular reference to the application of Cities Service Oil Company to Drill State Tract 52 #1, Corpus Christi Bay, Nueces County, Texas. Mayor Furman brought up the matter of the application of British -American Oil Producing Company to Drill a Well within State Tract No. 12, Corpus Christi Bay, Nueces County, Texas, at a location 660 feet from the East line and 660 feat from the South line of said State Tract No. 12, now in the process of drilling, and called for discussion from the Council. Commissioner Wallace stated that to grant to British -American Oil Producing Company a permit to continue drilling in State Tract No. 12, is in violation of the City Ordinance subject to penalty of $200 a day for drilling without a permit even though in ignorance of the law. He recommended that the sense of Council action be as follows: That what Britian -American has done so far has been done at their own cost and risk, and that further operation is at their risk; that the Council is charged with enforcing the City's ordinances and that if they do not do so they become a party to the violation. The Council should attempt to take the practical approach, and at the same time stating clearly that whatever action is taken on this matter will not set a precedent for future applications. He suggested a plan that would allow British American to complete its well below the mud line of the Bay and later extending a line farther into the Bay where the"Christ- mas Tree" or surface structure could be erected; that in his opinion the' City of Corpus Christi, Texas Special Council Meeting September 30, 1965 Page 3 Council should uphold its ordinances and that this application should be denied. Commissioner Blackmon said that before the Council acted on the application of British American, it should give consideration to what further action it would take, should the application be denied. He questioned the wisdom of an outright denial at this time, as the Council had not yet heard or considered the application, and reminded the Council that when the application was presented to it yesterday afternoon, it was immediately referred to the Bay Drilling and Platform Committee without allowing the applicant's attorney to speak or present evidence in its behalf, and that thus far all information received - other than the Committee's report - had not come during an official meeting of the Council. Commissioner Blackmon agreed that British American was drilling in violation of the City ordinance, and that to allow them to continue would be putting a premium on their violation, and would be penalizing Cities Service, Atlantic and the other lease holders who were obeying the ordinance and patiently waiting for the Council to act on their applications to drill. In fact, the other oil companies could then complain of our actions as being discriminatory, arbitrary and capricious. Commissioner Blackmon stated that he thought the Council had no choice., under the circumstances, but to enforce the law impartially and to take whatever steps were necessary to enforce it. He pointed out that the $200 per day fine provided under the ordinance was one of the remedies provided, but that this was penal or criminal in nature and would have to be enforced through the Corporation Court by the filing of approrpiate criminal complaints, but this would not stop the drilling. The other remedy would be civil in nature and would require the filing of an injunction suit, and the posting of a bond, if drilling were to be stopped. He further stated that the City might or could become liable for damages if it filed and lost such a suit; however, he believed the City should file such a suit and must file such a suit, regardless of the costs, in order to preserve its ordinances and find out if we really had an enforceable ordinance; that he didn't believe the suit would be lost as there was a question as to whether the City of Corpus Christi, Texas Special Council Meeting September 30, 1965 Page 4 applicant had "clean hands," and that information had been received that while the application may have staked the well location on the erroneous assumption that they were outside the City limits, their engineer had discovered the need for a permit before the drilling rig had been moved in or before drilling had actually begun. Since they had filed an application with the City Secretary Tuesday, September 28th, showing a willingness to now abide by the City's ordinances, it might be doubtful whether the Judge of the Corporation Court would hold them in violation of the penal provisions of the ordinance beyond such date. Commissioner Blackmon inquired as to whether the Cities Service case several years ago was analogous, and whether it could be or should be used as a precedent. Mr. Frank Priebe was asked to state what position the City took three years ago when his company (Cities Service Petroleum Company) had erroneously drilled in the prohibited area. He stated that the company drilled illegally by using a wrong map; that when it was brought to their attention they met with the representatives of the City Council and agreed that in the event the well was a "dry hole" it would be abandoned and the problem would resolve itself; that if production was found they could consent to do anything the Council asked including plugging the well. The well was a "dry hole" and was abandoned. Commissioner McDaniel suggested that the Council ascertain the attitude of British - American Oil Producing Company as to what they would be willing to do if they were allowed to proceed. Mr. John C. Brooke, local attorney for British -American Oil Producing Company, stated to the Council that he is not at this time authorized to make a statement, but perhaps a statement could be had within the next few hours. He stated that the well was begun through error, and because of the costs involved it would not be economically feasible to stop the drilling unless forced to do so, but that his Company is willing to work with the Council toward a reasonable agreement; that they are in an embarrassing situation and expect to make some concessions, but that if the well is shut down they will suffer considerable loss both in money spent and in certain lease privileges. He further stated that he had read last night the Cities Service agreement referred to by Mr. Priebe, and that they had not agreed to go so far as to plug the well. • City of Corpus Christi, Texas Special Council Meeting September 30, 1965 Page 5 Mr. Crow, Mayor of Portland, stated that his City does not want to do anything detrimental toward the development of minerals in the Bay, yet he did not want to jeopardize Portland's residential area. He suggested other alternatives such as slant wells and decorated structures. Commissioner Jiminez departed from the meeting. Mayor Furman asked if the attorney for British -American were ready to speak in behalf of the application. Mr. Brooke stated he was not ready at this time, but would be ready later this afternoon, or thereafter. Commissioner Blackmon stated he thought the applicant must be given reasonable opportunity to present its application, and that either a hearing should be called for the application, or, since this required specific notice, that a special meeting of the Council should be called to consider this particulariapplication. In response to a question as_to when he thought such a special meeting should be called, Commissioner Blackmon said as soon as possible, either this afternoon, tonight or tomorrow, depending on the convenience of the Council and the parties. Motion by Blackmon, seconded by Dunne that a special Council Meeting be held to consider this particular application. On vote Commissioners Blackmon and Dunne voted "Aye," Commissioners Wallace, Sizemore and McDaniel voted "Nay." The motion failed to pass. Commissioner Wallace stated his reason for voting against the motion was that the Council had been considering this application for several days; that the Bay Drilling and Platform Committee's report has been approved by the Council and that they could not hold a public hearing now without having already made up their minds as to the action they will take. Motion by Wallace, seconded.by Sizemore and passed that the application of British -American Oil Producing Company to drill within State Tract No. 12, be denied. Commissioner Blackmon stated that he now was put in the position of having to vote against something he might otherwise favor; that based on what he had heard up until now, City of Corpus Christi, Texas Special Council Meeting September30, 1965 Page 6 he would be in favor of denying a drilling permit to British -American, but he felt that this action should not be taken until the Council had "considered" the application within the meaning of the ordinance. As he viewed the situation, the Council was now about to take action without giving the applicant an opportunity to be heard, that his mind was not made up at this time, and that he would like to hear the evidence which applicant had in favor of the application, give opportunity for others to speak pro and con on the matter, and then vote. On vote, McDaniel, Wallace and Sizemore voted "Aye," Blackmon and Dunne voted "Nay." Motion by Blackmon, seconded by McDaniel and passed that a resolution be drafted requesting Mr. Jerry Sadler, Commissioner of the General Land Office, if it could consistently be done, to delay awarding any new leases until after October 18, 1965. On vote, Blackmon, Sizemore, McDaniel and Dunne voted "Aye;" Wallace voted "Nay." Mayor Furman designated Commissioner Blackmon to approve the resolution before it is dispatched to him. Motion by Blackmon, seconded by Wallace and passed that a member of the Council be appointed to attend the Special Technical Briefing Meeting on the matter of Bay Dri (ling, to be held Thursday and Friday of next week in Los Angeles. Council members who are members of the Bay Drilling and Platform Committee will decide who among them will attend. Mayor Furman instructed City Attorney Singer to notify all lease holders that no permits to drill in the Bay will be issued until after October 18, 1965, when the Bay Drilling and Platform Committee hopes to have more specific recommendations. Mayor Furman stated that applications received prior to October 18, 1965, will be referred to the Bay Drilling and Platform Committee. City of Corpus Christi, Texas Special Council Meeting September 30, 1965 Page Assistant City Manager Marvin Townsend was instructed to see that the City Ordinances are enforced in connection with drilling in the Bay to the point of filing an injunction suit if necessary against the offending Oil Company. There being no further business to come before the Council, the Special meeting was adjourned. i, McIVER BURMAN, Mayor of the City of Corpus Christi, Texas, certify that the foregoing Minutes:, same being for the period of September 1, 1965, through.September 30, 1965, inclusive, and having been previously approved by Council action, are by me•hereby approved.. ffl1L4A144-441AA McIVER FURMAN, Mayor City of Corpus Christi, Texas