More than two years into the task of writing the state’s fracking standards, all but two of the members of the N.C. Mining and Energy Commission have been flagged for a potential conflict of interest.
Chairman Vikram Rao received the 14 ethics evaluations from the State Ethics Commission last month and disclosed them Friday at the Mining and Energy Commission’s regular monthly meeting in Raleigh.
The potential conflicts for a dozen members of the Mining and Energy Commission – one of the state’s most polarizing government boards – include energy stock investments and energy consulting work. Also included: real estate ownership in Lee County, the epicenter of the state’s shale gas zone, where drilling could get underway as early as next year.
A potential conflict of interest does not disqualify a commissioner from sitting on a state board. It’s an alert issued to board members and the public of business interests and political ties that could compromise a commissioner’s judgment.
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However, the State Ethics Commission flagged the potential problems not at the outset of the Mining and Energy Commission’s work, but after the fracking board had finished its primary task of writing the state’s safety rules for shale gas exploration.
The 124 fracking rules are scheduled for review by the Rules Review Commission next week, to be forwarded by Jan. 1 to the state legislature for final approval.
The lifespan of the Mining and Energy Commission has almost run its course. Under a state law passed this summer, the board is scheduled to dissolve on July 31 and will be replaced by a new Oil and Gas Commission to handle fracking permit reviews, variances, trade secrets and other requests.
When asked about the belated evaluations, which were issued Oct. 23, the State Ethics Commission’s executive director, Perry Newson, said the ethics commission is working on thousands of evaluations with limited staff.
“Frankly, I did not know that the MEC was going out of business soon,” Newson said. “That was a surprise to me.”
Members of the Mining and Energy Commission said key details of their ethics evaluations are dated and obsolete. For example, Commissioner James Womack is described as a member of the Lee County Commission and an IT consultant for Netsmart Technologies, descriptions that are no longer current.
“I haven’t worked for Netsmart now for almost three years and received my last commission check from them in early 2012,” Womack said.
Commissioner Amy Pickle said she’s been off the Environment Management Commission more than a year. Chairman Vikram Rao said he’s no longer on the board of Intelligent Well Services. Still, Rao said he expected all the fracking commissioners to be flagged for potential conflicts, given their industry experience and professional backgrounds.
“In a sense, it’s a nice story because nothing is smoking there and no one got nailed,” Rao said. “But the fact that so many got potential conflicts looks interesting.”
Rao’s potential conflicts include running the Research Triangle Energy Consortium and owning stock options in energy giant Halliburton and technology company BioLargo.
“My new ethics disclosure will include the fact that I serve on the Science Council of Royal Dutch Shell,” Rao said. “They may find that interesting enough to cite the next time.”
Commissioner Charles Taylor, a member of the Sanford City Council who owns less than an acre of land in a subdivision, said he’s not sure why he was even flagged.
“It’s weird – I don’t see any conflict,” Taylor said. “I’m not in a position to gain anything, especially land-wise.”
The largest real estate owner in the group is Ray Covington, who owns a one-sixth family share of about 1,000 acres in Lee County. “In the grand scheme of things, it’s not that much,” Covington said.
Two commissioners cleared of any potential conflict were Kenneth Taylor, the state geologist, and Marva Price, a registered nurse who teaches at Duke University and UNC Chapel Hill.