N.C. regulators tell lawmakers not to meddle over fracking

jmurawski@newsobserver.comJune 29, 2013 

The emotional debate over fracking spilled over to the N.C. Mining & Energy Commission as the board voted Friday to tell the legislature to stop meddling in its business.

Commissioners voted unanimously to protest the state legislature’s move to wrest a controversial fracking rule out of the commission’s hands. The rule – specifying which chemicals pumped underground must be publicly disclosed – is the most contentious issue in every state that allows shale gas drilling.

The commission had vowed to write the nation’s strictest rule for chemical disclosure, one of some 120 rules it will write to safely govern shale gas exploration in the state. But this week a Senate committee intervened, approving a bill with a provision that allows energy companies to deem some chemicals “trade secrets,” and thus not reveal them except in an emergency situation.

On Friday commissioners called the Senate move an insult and an affront to the residents of North Carolina. For more than an hour they debated writing a letter of protest, at times interrupting and talking over each other. During a lunch break, two commissioners exchanged sharp words outside.

Friday’s debate underscores the controversy surrounding shale gas exploration, which involves the use of water mixed with chemicals to break up deep shale rock formations and release natural gas trapped underground. The dozens of chemicals used in fracking range from benign household solvents to potent industrial additives that have been blamed on crop damage and fish kills resulting from surface spills and well blowouts in other states.

Chairman James Womack plans to send the commission’s letter this weekend to the Republican leaders of both chambers, House Speaker Thom Tillis and Senate President Pro Tempore Phil Berger.

“We were chartered to write these rules and not to have them back-doored through the legislature,” Womack said during the debate. “This is the most controversial thing we’re going to do in this commission. And the public is not going to approve any attempt to withhold that information.”

‘Gross injustice’

At issue is a provision in House Bill 94 that would give the state legislature authority over the state’s chemical disclosure standard. Senators rewrote the House bill saying they were responding to a request by the N.C. Department of Environment and Natural Resources, the environmental agency that will issue drilling permits and regulate shale gas exploration.

DENR officials didn’t want to get stuck holding corporate trade secrets, which can be subject to costly court challenges. House Bill 94 would let private citizens challenge trade secrets in N.C. Business Court. To become law it would need to pass the full Senate and House. It could be heard next week in the Senate.

Members of the Mining & Energy Commission, who had been deliberating a chemical disclosure standard for several months, were blindsided by the legislators’ move.

“It’s a gross injustice, not only to this commission and to the staff, but to the citizens of the state,” Commissioner Charles Taylor said during the debate.

Commissioner George Howard dismissed his fellow commissioners’ protestations as “grandstanding.” He said they asked for trouble when they came up with a preliminary proposal last month that would require DENR to hold the trade secrets.

“We picked a fight we shouldn’t have picked, and that is, who holds the trade secret,” Howard said. “They communicated they didn’t want to hold the trade secret and we stiffed them.”

Howard said that energy companies, instead of state agencies, should be allowed to withhold secrets, as is the common practice in many other states. House Bill 94 would require companies to release the proprietary information within two hours in case of public health emergency.

‘I’m still talking’

The debate Friday was a highly unusual departure from staid commission deliberations, which tend to focus on the technical minutiae of legal language and the parsing of regulations from other states.

At one point, as Womack spoke, Howard interjected with “Let me ...” only to be rebuffed by Womack’s stern “I have the floor still.” Minutes later, when Howard chimed in again, Womack retorted: “Excuse me, I’m still talking.” During one boisterous exchange Commissioner Charles Holbrook admonished his colleagues to talk one at a time.

As the commissioners got ready to adjourn, Womack assured those in the audience that the emotional intensity of the day’s arguments does not mean the commissioners dislike each other. But the tensions were hard to hide.

During a lunch break, Taylor, a Sanford councilman, confronted Howard and told him his remark about “grandstanding” was out of bounds and suggested that Howard was involved in the behind-the-scenes machinations that led to the legislative vote this week.

Howard is CEO of Restoration Systems, a Raleigh company whose previous CEO, John Skvarla, was selected this year by Gov. Pat McCrory to run DENR, the agency that will oversee fracking in the state. Howard said he had nothing to do with the Senate vote this week.

Commissioners also expressed dismay that the energy industry was privately negotiating fracking safety standards with legislators, rather than bringing concerns and suggestions to the Mining & Energy Commission. One of the companies involved in private discussions is Halliburton, an energy conglomerate that invented the fracking process in the 1940s and develops fracking fluid formulations for the industry.

Womack, an Army veteran who is also a Lee County commissioner, said that leaving it up to energy companies to unilaterally decide what is and isn’t a trade secret could be abused by the industry to withhold data that’s controversial but not proprietary.

“When you leave that temptation there, industry has carte blanche,” Womack said. “They can withhold it, doesn’t matter what was in the chemical.”

Murawski: 919-829-8932

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