The project was to be built on Page Avenue, two blocks east of Hemphill Street. The site is tucked between an industrial area and Ryan Place, one of the city’s most upscale neighborhoods.
The decision came on the eve of a City Council vote on the company’s application.
City Councilman Joel Burns said XTO was on the verge of agreeing to 24-hour environmental monitoring at the site before it withdrew its application late Monday.
"We could have had the opportunity to create some real environmental protections at this well site, and we're not going to get that opportunity now,” Burns said.
In place of a large-scale drill site, which would have included the monitoring, the company now could opt for a series of smaller, individual drill sites that don’t need council approval, Burns said.
An XTO spokesman did not return several calls Monday seeking comment.
Neighborhood leaders had been encouraging residents to pack Tuesday’s council meeting to oppose XTO’s waiver.
"We need to stop this,” said Fernando Florez, president of the South Hemphill Heights Neighborhood Association. “We need to look at this seriously. This could be a serious problem that could affect public health."
Just last week, the Texas Commission on Environmental Quality announced it had found elevated levels of benzene at one in five oil and gas sites it surveyed in the Barnett Shale. Benzene can cause cancer if people are exposed over many years.
Several residents near the Page Avenue site said the findings alarmed them.
"It's already proven that a lot of the wells are letting off benzene,” said Luis Chavez. “That's a major concern, I think, of most people."