Bill to lift NC fracking moratorium set for committee vote this week

jmurawski@newsobserver.comFebruary 19, 2013 

  • Key provisions of Senate Bill 76 • Lifts the state’s fracking moratorium and authorize the state to issue permits for hydraulic fracturing and horizontal drilling on March 1, 2015. • Requires the N.C. Mining & Energy Commission to study the creation of a single comprehensive environmental and operating permit. • Eliminates two voting positions from the commission, including that of the state geologist. • Repeals the Landman Registry the state created last year to track individuals who sign drilling leases with property owners. • Repeals the state’s prohibition on injecting waste, including used fracking fluids, into deep wells for permanent disposal. • Increases the state severance tax on natural gas, oil and condensates. • Appropriates $22,900 for the operations of the commission. • Prohibits local governments from imposing additional taxes on energy exploration in the state. • Requires any revenues or royalties from offshore energy development to be set aside for a $50 million emergency fund to deal with cleanup or mitigation of oil spills or other liquid releases. • Strongly encourages the governor to develop a compact with South Carolina and Virginia to develop a regional strategy for offshore energy exploration. • Creates an Energy Jobs Council within the N.C. Department of Environment and Natural Resources to promote economic development and business opportunities for energy companies regulated by DENR. • Directs the Medical Care Commission to require state-licensed hospitals to use emergency dual-fuel generators that run on liquid fuel and natural gas.

— The push to lift North Carolina’s fracking moratorium is gaining steam despite warnings that the effort exposes the state to a greater risk of environmental damage.

The state Senate Finance Committee is set to vote Thursday on a fracking bill designed to signal to the oil-and-gas industry that North Carolina is eager to host shale gas exploration activities.

“This country needs the energy and this state needs the jobs,” said bill co-sponsor Sen. E.S. “Buck” Newton, a Republican from Johnston, Nash and Wilson counties, on Tuesday. “North Carolina is ready to do business.”

The legislation includes a grab-bag of goodies that energy industry representatives have indicated they would like in place before they invest equipment and time to explore this state’s natural gas potential, Newton said. Newton and other bill supporters want to make North Carolina a priority for shale gas exploration companies.

The Senate finance committee held a hearing on the bill Tuesday, prompting critics to question the wisdom of dismantling public safeguards enacted less than a year ago. A key provision would end the state’s fracking moratorium and allow drilling operators to apply for permits in two years.

“It’s basically to tear down all barriers,” Democratic Sen. Floyd McKissick Jr., of Durham, said after the hearing. “You could see the carte blanche issuance of those permits without regulations in place.”

The bill would also require environmental regulators to promote business opportunities for energy companies they oversee, would ban local governments from taxing energy developers, and would eliminate the state’s landman registry for those who offer drilling leases to property owners.

Newton declared North Carolina has between 15 trillion and 30 trillion cubic feet of natural gas, ten times the amount of previous estimates. Last year the U.S. Geological Survey estimated this state has between 779 billion and 3 trillion cubic feet of natural gas. But Newton said that shale gas deposits in other parts of the country have significantly exceeded early government estimates for those regions.

Sen. Harry Brown, a Republican from Onslow and Jones counties, added that the fracking bonanza in North Dakota has turned outposts into boomtowns and created a thriving economy where a local McDonald’s is paying $15 an hour to compete for employees who have other options.

North Carolina’s legislature last year created the N.C. Mining & Energy Commission to write the rules to govern well casings, wastewater disposal and other aspects of fracking. The rules would not become final until the state legislature votes on them.

By lifting the state’s fracking moratorium as of March 1, 2015, the bill would assure that fracking becomes legal without delays. Supporters said North Carolina must avoid the situation in New York, where a moratorium has dragged on for three years.

Mitch Gillespie, assistant secretary at the N.C. Department of Environment and Natural Resources, told a Senate environmental committee in a separate meeting Tuesday that the commission plans to draft between 120 to 130 rules by the fall of 2014 to make it possible to begin exploring for natural gas.

“We see no problem with meeting that deadline,” Gillespie told the committee.

North Carolina’s natural gas deposit is trapped in prehistoric shale rock formations around Lee, Moore and Chatham counties. Releasing the gas would involve drilling horizontally through the shale and smashing the rock by means of water, chemicals and sand. Fracking is an industry shorthand for hydraulic fracturing.

Bill Weatherspoon, the executive director of the N.C. Petroleum Council, said North Carolina’s effort to legalize fracking began with bill writing in 2011 and would end in 2015 with the lifting of the moratorium, a sufficient amount of time to get the job done.

“My friends and colleagues in the environmental opposition have perfected the strategy of delay,” Weatherspoon said. “I don’t think a state can move slower and more carefully and more responsibly than North Carolina has done.”

Staff writer John Frank contributed.

Murawski: 919-829-8932

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service