The push to legalize fracking in North Carolina could hit pay dirt this week.
The fracking bill that just days ago sailed through the state Senate could be approved by the N.C. House as early as Wednesday, clearing the way to a sweeping overhaul of the state’s energy policy.
The vote is playing out against a looming question: Does North Carolina have sufficient amounts of natural gas to attract the fracking industry?
The bill would roll back a decades-old ban on drilling laterally and flushing chemicals underground – the two main components of natural gas exploration in shale rock formations. Fracking is industry shorthand for hydraulic fracturing of underground rock with millions of gallons of water and chemicals pumped at high pressure.
Rep. Mike Hager, a Republican representing Rutherford and Cleveland counties, said the fracking legislation, known as the Clean Energy and Economic Security Act, could get a hearing before the House Environment Committee as early as Tuesday, with a full House vote on the following day, or possibly the following week.
Hager said the amount of natural gas the state contains in its Triassic Basins is not a big concern.
“That’s not a pertinent piece of information,” Hager said. “We’re there to set up a regulatory environment and environmental constraints as to what drilling companies can and can’t do. I don’t see that it’s our job to ascertain what the commercial viability is of the shale gas.”
Drilling is years away
The bill would task a Mining & Energy Commission with the creation of regulations to govern such practices as drilling, fracking, well-water testing, wastewater disposal and air emissions. It would also create safeguards for landowners whose properties become staging grounds for derricks, well pads, pipelines and compressor stations.
The emotional Senate debate last week pitted Democratic opponents, who cited potential risks to public safety and the environment, against the Republican majority, which lauded the potential economic and social benefits of an affordable, domestic energy resource to offset dirty coal and imported oil.
The regulations are expected to take two to three years to complete and will require separate approval from the state legislature before energy companies could begin drilling.
The U.S. Geological Survey said last week that this state’s estimated natural gas potential is nearly 1.7 trillion cubic feet of natural gas in the Deep River Basin. The basin spans about 1,250 square miles and extends from Durham to the South Carolina border.
This projection comes out to less than 2 million cubic feet of gas per acre. By contrast, an earlier state estimate by state geologists projected about 5.2 million cubic feet per acre – about 2-1/2 times more concentrated – but in a much smaller area.
State geologists had previously estimated about 309 billion cubic feet of natural gas in a 92-square-mile area in Lee, Chatham and Moore counties known as the Sanford sub-basin. This is a former coal-mining region that is thought to contain the most promising natural gas deposits.
Gas isn’t everywhere
But not every part of that area is gas-rich. Federal officials based their estimate on eight test wells drilled in that area between 1974 and 1998, some producing negligible results and one well in Lee County completely missing the shale formation.
State geologists, on the other hand, extrapolated from the two vertical wells that registered the strongest presence of gas. Those two wells, now capped, produced a high gas content even though operators in 1998 were unsuccessful in their attempts to fracture them with nitrogen foam, according to state records.
The U.S. geologists estimated for technically recoverable gas, but didn’t account for zones that could be off limits to drilling, such as the Shearon Harris nuclear plant in southwestern Wake County, high population centers such as downtown Durham, or state parks and environmentally sensitive areas.
And the federal agency didn’t say where North Carolina’s gas was concentrated. Substantial portions of the Deep River Basin are thought to contain no natural gas, according to state geologists.
Interest limited in N.C.
More wells would have to be drilled to ascertain where the gas is and how much there is, and that may not happen for years, if ever. North Carolina could prove to be richer in gas than has been anticipated, but the state is far down on the industry’s priority list, said Sam McNeil, managing director of River Capital Partners, a Weddington company 20 miles south of Charlotte that advises energy companies.
“Let’s be honest, how many large companies have been in North Carolina leasing acreage?” McNeil said. “There are many other plays that are economically more attractive.”
The limited area analyzed by state geologists is of greatest interest because it has the best gas resources, said Steve Heron, South Region Exploration Manager for Cabot Oil & Gas in Houston, Texas.
Heron said that area is so small that it’s not likely to attract major energy companies. Most likely the locally found natural gas could be used for brick-making plants, small industries or nearby power plants, he said. There would have to be a sufficient amount of gas to justify building a pipeline network to transport the fuel, he said.
Heron, a native of Durham whose father taught geology at Duke University, said that about five years ago his company analyzed the same eight test wells and corresponding logs that the U.S. Geological Survey reviewed. Cabot Oil & Gas decided at the time the gas supply was insufficient to justify investment.
“We didn’t think it was that big, and we walked from it,” he said. “You’ve got a bunch of scattered basins with small reserves, and no infrastructure.”