What is a Variance?

Communities have the right to order their structure and development. But that right is balanced against property owners’ rights to utilize and enjoy their property. Some of the United States Supreme Court’s most vexing, controversial, and determinative decisions have dealt with this balancing, in particular in zoning.

In oil and gas it works like this. Governmental authorities, through law, can reasonably restrict drilling activities, but they cannot absolutely turn them away. Reasonable restrictions are things such as set-back requirements, i.e. drilling must be some distance, say 500 feet, from any structure. Perhaps more from a church or school. But when such type requirements becomes very restrictive, they run the risk of being invalidated in court for going too far; for depriving a property owner of his right of utilization.

The restricting body can give itself wiggle room in strict ordinances. It does so by building into its most hand-cuffing rules provisions for variances. Variances grant exemptions to, and loosening of, restrictions when conditions are shown to warrant it. If there is only one building within 500 feet, and its owner stores ping pong balls in it, the drilling company will ask for and probably receive a variance allowing drilling within the 500 feet. And the ordinance avoids a trip to court where it would be challenged, and probably struck down, as an unconstitutional taking of property.

This enters into gas lease terminology in the following manner. If property owners in an area want a restriction relaxed, they themselves cannot do it. But they can agree with a gas company not to oppose the company’s request for a variance; to in fact support it. It becomes a kind of a “no harm, no foul” thing. If the affected property owners don’t care, and it doesn’t hurt anyone else, should the municipality?