Dallas Mayor Mike Rawlings says a $30 million lawsuit filed Thursday by Trinity East Energy is the latest in a “game of poker.” The gas drilling company is suing the city, claiming it breached a contract that would have allowed it to drill on city property.
In 2008, Trinity East Energy paid the city of Dallas $19 million for the right to drill for natural gas on 3,600 acres in northwest Dallas.
The Fort Worth company filed three zoning applications to drill but the city plan commission and the City Council rejected the sites because two were located in a park and floodplain and a third was near a new soccer complex.
Trinity East’s President Stephen Fort says city officials including former City Manager Mary Suhm assured his company it would be able to drill -- then they broke their promise.
“I guess the simple analogy would be if the city sold some farm land to a farmer and then denied him a right to farm on it, that just wouldn’t be right,” Fort said in an interview with KERA.
Fort says Trinity East spent several years and more than $30 million to design a drilling project it couldn’t get off the ground.
“We are seeking to recover some of those lost monies,” Fort said. “But we will never recover the amount of money we would have recovered if we were able to drill and develop the leases as we planned.”
On Thursday, Mayor Mike Rawlings repeated his belief that Trinity East may actually have wanted the city to deny its permits. Natural gas prices are depressed and the company may hope it will make more money by suing.
“I believe they were not going to drill because of the business situation and that a game of poker was being played," Rawlings said. "And the only way they could win is if we folded our hand."
In a statement, the city said Trinity East Energy chose not to apply for other permits on the leased property or use horizontal drilling. The city said it did what was necessary to protect public health and the environment and it will fight the lawsuit.