State Politics

August 17, 2014

A guide to NC’s proposed fracking rules

A sampling of the 100-plus proposed rules that will be up for discussion at the Energy and Mining Commission’s four public hearings.

Areas covered by the proposed rules: Geophysical surveys, drilling units, well spacing, permitting, financial assurance, well site construction, well construction, chemical disclosure, baseline water testing, water sourcing, waste disposal, site reclamation, and operation and production.

Areas not covered by the proposed rules: Compulsory pooling, air quality, regulatory fees, road use, stormwater control, waste disposal, fees and taxes.

Samples of the Mining and Energy Commission ’s Proposed Rules

Emergency response planning: Permit holder must identify types and amounts of chemicals, fluids and wastes present at a production facility. Permit holder must submit emergency plans for chemical spills, fires and explosions.

Setback distances: Gas wells, tanks and pits must be at least 650 feet from homes, buildings and drinking water wells; at least 200 feet from rivers, ponds and other waterways; at least 100 feet from roads, utility/rail rights-of-way and intermittent streams. Exceptions to setbacks require a variance granted from the Mining and Energy Commission.

Prohibited substances: The following substances are prohibited from being injected into the ground during fracking or disposal: diesel, fuel oil, kerosene and crude oil.

Well maintenance: Drilling sites must have a functioning blowout preventer on site during maintenance, remediation and fracking operations.

Well closure: Upon abandonment of wells, well bores will not be plugged with trash or other non-drillable material.

Chemical disclosure: Permit holder will disclose online any fracking additives and hazardous chemicals, including chemical formulas, quantities and concentrations, to local emergency responders and to the N.C. Department of Environment and Natural Resources.

Trade secrets: Additives and chemicals can be shielded from disclosure, but trade secret exemptions require approval from the N.C. Mining and Energy Commission. The confidential information must be provided upon request to health care providers, fire chiefs and state agencies if required to perform their functions.

Baseline water testing: All water supplies within half-mile of a proposed gas wellhead will be tested before drilling and up to five times after drilling. The test samples will be analyzed for arsenic, barium, radium, benzene and diesel, among other substances. The testing will be conducted by an independent lab, paid for by the permit holder, and made available to the public.

Water storage: Wastewater and flowback water can be stored in open air pits, open tanks or closed tanks. If an exposed pit is used, the pit must be double-layered with synthetic liners and equipped with leakage monitors between the liners. The permit holder must inspect pits and open tanks after half-inch of rain falls within a 24-hour period.

Water supply contamination: The permit holder will replace a property owner’s water supply if lab results show the water supply was contaminated by the permit holder’s activities.

Water sourcing: Permit holder will investigate alternatives to using fresh water, including flowback and produced water, and provide a reason for not using the alternatives if they are rejected.

Waste management: Permit holder must submit a management plan for storing and handling wastewater and solid wastes from the entire exploration process including final disposal.

Proposals and recommendations (from study groups, advocacy organizations and N.C. Attorney General)

Compulsory pooling: Should be allowed only when 90 percent of landowners have signed fracking leases. (Under current state law, forced pooling could happen if just one landowner in a drilling unit signed a fracking lease.)

Blowout mitigation: Permit holder should be required to have a hazard mitigation contract with a company specializing in well disaster mitigation.

Chemical disclosure: Everything should be disclosed, no trade secret exemptions.

Posting violations: All violations related to hydraulic fracturing in the state should be posted online.

Air emissions: North Carolina should require monitoring and control of air pollution emissions caused by hydraulic fracturing activities, including methane leaks and diesel fumes from wells, generators, trucks and heavy equipment used in fracking operations.

Provisions that already exist in North Carolina law

Presumptive liability: If water supplies are contaminated, it is presumed the gas operator is responsible for the water contamination within half-mile of a gas wellhead, unless the operator can prove otherwise.

Compensation for damages: A gas operator must compensate property owner for damages caused to water supply, personal property, livestock, crops or timber.

Site reclamation: A gas operator is required to restore all surface areas within two years of completing operations.

Bonding: The operator must provide a bond to cover $1 million in environmental damage.

Landmen: A landman is an agent who solicits leases for rights to drill and explore for natural resources from property owners. Landmen must register with the state before soliciting leases from landowners.

Leases: When fracking leases are offered, they must include a publication outlining landowner rights. The leases must include a conspicuous disclosure that landowners should obtain approval from mortgage lenders before signing a fracking lease. Either party can cancel a lease within seven business days of signing it.

Mineral rights: Sellers of real estate must disclose to potential buyers if oil and gas rights are “severed” and would not transfer to the buyer of the surface property when the land is bought or sold.

Local laws: Local governments will not pass ordinances that prohibit fracking or have the effect of preventing shale gas exploration.

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