Energy bill would end fracking moratorium

jmurawski@newsobserver.comFebruary 12, 2013 

— Senate Republicans are pushing to make North Carolina more welcoming to energy companies with a bill that requires environmental regulators to promote business opportunities for energy companies they oversee.

The legislation, introduced Monday, will get its first airing Wednesday before the Senate Finance Committee. Its sponsors say it will attract thousands of new jobs and generate billions of dollars for the state.

The legislation would eliminate some fracking safeguards that were adopted into law last year. The safeguards were key to getting enough Democrats on board to override then-Gov. Bev Perdue’s veto of a bill that allowed fracking to advance in the state. One of the key provisions was that fracking would not become legal until the N.C. Mining & Energy Commission wrote safety rules and the legislature took a separate vote on those rules.

But the bill proposed this week would set a date of March 1, 2015, to allow energy companies to start applying for permits for horizontal drilling and hydraulic fracturing. Skeptics have warned that the Mining & Energy Commission may not be able to complete its task of writing at least a 100 rules and three reports by that deadline, but the bill’s backers say the natural gas industry needs a stronger signal.

“The lifting of the moratorium provides certainty to companies looking to make an investment in North Carolina energy exploration, a process that takes years of planning and data gathering,” said bill co-sponsor Sen. E.S. “Buck” Newton of Johnston, Nash and Wilson counties. “Without this signal, companies will continue to defer judgment because there is, in essence, an infinite moratorium in place.”

Republican House Speaker Thom Tillis expressed unease about undoing last year’s delicate compromise, which resulted in a veto override by a single vote.

“If I felt like there was a burning platform, if I felt like we needed to compress the time that we anticipated, then I’d be open to it, but I’m not aware of anything,” Tillis said. “I thought it was a very thoughtful process last year. I’d like for it to play out.”

The bill also creates an Energy Jobs Council to promote job creation and expand industry opportunities. This economic development function would be located in the N.C. Department of Environment and Natural Resources, replacing the Energy Policy Council in the N.C. Department of Commerce.

The Energy Jobs Council would be staffed by the same DENR employees who support the Mining & Energy Commission in the writing of safety regulations and enforcement procedures.

Sen. Newton said the two functions are not adversarial and DENR staff is better equipped for the task.

Bill Holman, who was DENR secretary in 1999 and 2000, said other states have adopted such dual functions for their oil and gas commissions. The success of such arrangements largely depends on the people nominated to fill the positions, said Holman, who now directs the North Carolina office of The Conservation Fund, a land trust organization.

“The experience is mixed,” he said. “In some cases they strike a balance of competing interests. In other cases, they’re a captive of the oil and gas industry.”

Molly Diggins, director of the Sierra Club’s North Carolina office, said mixing regulating with business development is a bad idea.

“It appears to be turning the state environmental agency into a business promotion and marketing agency,” she said.

The Energy Jobs Council would have at least eight seats designated for representatives of utilities, business financing, energy exploration, transportation and industry; at least three seats would be set aside for those with familiarity or experience in alternative energy, environmental management and biofuels.

The bill language creating the Energy Jobs Council says state energy policy should promote the best use of such resources as coal, natural gas, nuclear, smart grids as well as solar, wind, biomass, hydroelectric and energy efficiency programs.

The bill also eliminates a registry created last year to keep track of industry sales reps who sign leases with property owners to allow energy developers to explore for natural gas. North Carolina was the first state in the nation to require such a registry, and to date four people have registered.

Newton said it was not fair to selectively require registrations for the oil and gas industry.

“We will make North Carolina more attractive for shale gas exploration to spur job growth sooner,” he said.

Murawski: 919-829-8932

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