By Jack Douglas and Jason Allen | CBS11

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TARRANT COUNTY (CBS11 I-TEAM) – An Oklahoma company wants to drill a disposal well for oil and gas waste next to Lake Arlington in Tarrant County.

The CBS11 I-Team found BlueStone Natural Resources II filed an application for the well in December.

However, disposal wells are currently banned in Arlington and Fort Worth, and both cities have submitted a letter of protest to the state.

The lake is a major source of water for Arlington residents and the city’s water director cited concern over protecting water quality and dam safety as reasons for the opposition.

The Tulsa-based company wants to drill the disposal well just off the western shore of the lake.

Tuesday afternoon, workers were building a fence, topped with barbed wire across the front of the proposed location.

It would be near well pads where the company operates dozens of gas wells that stretch under the lake to its eastern side. Technical staff from the Railroad Commission of Texas have already determined the well meets commission rule requirements for protecting public safety and natural resources, including water.

Disposal wells are used to get rid of salt water and other waste produced during gas production, injecting it thousands of feet underground. When there are no disposal wells nearby, operators have to truck the waste to wells out of the area. The application from BlueStone indicates it would inject as much as 25,000 barrels per day at the site.

The wells have been the focus of scrutiny in North Texas for several years, with geologists tying some of them to an increase in earthquakes locally and around the country. A 2.4 magnitude quake was centered in Arlington in 2014.

Ranjana Bhandari, who has been actively involved with drilling issues with the group Livable Arlington, told the I-Team she’s concerned locating the well next to the lake is a risk to the water supply.

“Arlington has good water,” she said. “We’re lucky to have that. And we should protect it.”

Arlington’s City Council met in a closed door executive session Tuesday for a legal discussion about the application. While a spokesperson would not offer any background on the discussion, Bhandari and other residents the I-Team spoke with believe it’s possible BlueStone may turn to legislation passed in Texas in 2015 that cracked down on local control over oil and gas production.

In response to the City of Denton banning fracking, House Bill 40 was written to “explicitly confirm the authority” of the state over oil and gas operations. It limited local municipalities to controlling above ground related activity, like traffic and noise, and the rules are required to be “commercially reasonable.”

The law does allow for any rule in effect for five years, while allowing energy operations to continue, to be considered commercially reasonable.

However, BlueStone’s application places the disposal well in Fort Worth city limits. Though the city had a long moratorium on disposal wells, Fort Worth didn’t officially ban them until April of 2012, leaving the rule just short of five years old.

In a statement provided by email, BlueStone wrote the company was not aware of the Arlington City Council meeting Tuesday.

The statement said the company “is committed to fostering and maintaining good relationships with all local governments and stakeholders in areas where we operate, and we look forward to future discussions with all relevant parties regarding this matter.”

Because of the protested application, an administrative law hearing is now scheduled for May in Austin.

After a proposed decision from an administrative law judge and time for replies, Railroad Commissioners will rule on the proposal in a public meeting.