NC Senate passes bill that would lift fracking moratorium

jmurawski@newsobserver.comMay 22, 2014 

  • Duke study says fracking boosts government coffers

    A pair of Duke University researchers said Tuesday that fracking boosts public finances of local governments through local taxes and other fees.

    Daniel Raimi and Richard Newell compiled data from 10 states that have active shale gas exploration, including Arkansas, North Dakota, Texas and Pennsylvania.

    Their report concluded that most states end up ahead but some are set back financially by fracking-associated expenses, such as road repair, water service expansion and increased agency staffing.

    The two Duke researchers work at the university’s Energy Initiative. They said the leading costs are road repair and maintenance, and service demands such as law enforcement, emergency services and administrative staffing.

    They said negative fiscal impacts were experienced in western North Dakota and eastern Montana during fracking booms, but the economic stress faded as the drilling activity subsided.

  • N.C. fracking timeline

    2009: N.C. Geological Survey announces presence of shale gas in the state’s midsection.

    2011: Democratic Gov. Bev Perdue signs a law directing the N.C. Department of Environment and Natural Resources to study fracking and to hold public hearings on the subject.

    2012: DENR study says state’s geology poses extra risks because natural gas reserves here are much closer to groundwater than in other states and the rock in between is not watertight.

    U.S. Geological Survey estimates N.C. has 1.7 trillion cubic feet of natural gas in the Deep River Basin, which spans 150 miles from Durham to the South Carolina border.

    Overriding a Perdue veto, the legislature creates Mining and Energy Commission to create safety rules for gas drilling.

    “Landmen” snap up leases to drilling rights in Lee County.

    2013: N.C. Senate votes to lift fracking moratorium; N.C. House defeats the proposal.

    Wednesday: Senate votes again to lift the moratorium.

— The N.C. Senate passed a fracking bill Wednesday that would lift the state’s moratorium on shale gas drilling, setting up a replay of last year’s political showdown in the state House that prompted Republicans to join Democrats and keep the moratorium in place.

The bill, dubbed The Energy Modernization Act, includes a host of sweeteners to entice energy companies to start drilling here next year, including a trade secret provision that would make North Carolina the only state where it’s a felony to disclose confidential ingredients used in fracking chemicals.

The bill would lift a decades-old ban on horizontal drilling and hydraulic fracturing, allowing regulators to start issuing drilling permits on July 1, 2015.

The legislation passed 33-13 but under legislative rules returns to the Senate on Thursday for a final day of debate and one more vote. After that it’s headed to the House, where lawmakers would be asked to lift the moratorium they had promised to keep in place last year until all safety rules are approved by the legislature.

“The House is not on board with the date certain,” Republican Rep. Mike Hager of Rutherfordton, the House leader on energy issues, said of expiring the moratorium. “The major concern is we want to make sure the rules are what we want them to be before we go out and frack. It’s gotta be rules first and then moratorium. You don’t want to go flying blind.”

The rules are being handled by the N.C. Mining and Energy Commission, which was created by the legislature two years ago. The commission has formulated 120 rules to protect public safety and safeguard the environment. The rules will go through several rounds of public hearings this summer and will then be forwarded to the legislature as early as October for final approval.

Senate Republicans don’t want legislative debates over technical rules to keep pushing back the start date on fracking. They say state officials have been jawboning the concept of gas drilling going on four years now, as energy companies await a target date so they can lay out schedules and invest millions of dollars it will take to drill test wells here.

But every attempt to lift the moratorium has met opposition.

Governor’s concerns

Gov. Pat McCrory also has concerns about the legislation and is negotiating with lawmakers to change some provisions before the House debate, which could take place as early as next week. One sticking point that is not popular among local officials: The Energy Modernization Act would prohibit local governments from passing ordinances that are perceived by the energy industry as a hindrance to shale gas exploration.

“We are still considering the implications of several provisions regarding governance and the potential impact on city and county governments,” said Josh Ellis, a spokesman for the governor. “We will work with the Senate and the House to ensure that the final bill protects the environment and promotes responsible exploration of our energy and mineral resources.”

The bill also disbands the Mining and Energy Commission and creates successor boards, reducing the number of seats the governor can appoint on the Mining Commission from nine to one, and giving most seat assignments to the General Assembly.

Sending a signal

In Wednesday’s Senate debate, supporters of the bill urged colleagues to send a clear signal to energy companies that North Carolina encourages shale gas exploration. Otherwise, senators said, the state will continue standing by as other states reap the economic benefits of energy exploration.

“It’s certainly time for us to move beyond the lies, the made-up facts, the sky-is-going-to-fall mentality, the folks who want to turn off the lights,” said Republican Sen. E.S. “Buck” Newton of Wilson.

Republican Sen. Jerry Tillman of Randolph and Moore counties lambasted Durham Sen. Floyd McKissick and other Democrats for delaying tactics he said are intended to keep fracking illegal as long as possible.

“We are 10 years, make it 20 years, behind the rest of the country,” Tillman said. “If we left it to Sen. McKissick and his party, we’d get it on the 12th – the 12th of never.”

Democrats proposed five amendments, all of which failed except one proposed by Sen. Ben Clark, a Democrat representing Cumberland and Hoke counties. It requires that mandatory drinking water tests in fracking areas be conducted by independent labs rather than by the energy companies.

Democrats spoke out against the moratorium bill as a premature and reckless gamble with the state’s drinking water and environment.

“The sponsors are asking you to step on the gas when we only have three wheels on the car,” said Democratic Sen. Mike Woodard of Durham County.

Murawski: 919-829-8932

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