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North Carolina Fracking Study Bills Nearing Passage

Two separate bills calling for a comprehensive study of hydraulic fracturing (hydrofracking) in North Carolina -- a state where the practice is currently illegal -- are expected to be sent to Democratic Gov. Bev Perdue this week.

The General Assembly bills, H242 and S709, direct the Department of Environment and Natural Resources to conduct a review of oil and gas exploration in the state and report its findings and recommendations by May 1, 2012.

Rep. Mitch Gillespie (R-Marion) -- who introduced H242 with Rep. Mike Stone (R-Sanford) on March 7 -- told NGI's Shale Daily that his bill was up for a 2 p.m. vote Monday in the Senate Committee on Agriculture, Environmental and Natural Resources. He said if the bill passes it would go to a Senate floor for a vote on Tuesday.

"It's just a matter of days," Gillespie said Monday. "[S709] is on the floor of the House of Representatives today and is almost law. After we pass it tonight it will go to the governor for her signature. We could be done with both of these bills this week."

S709, alternatively known as the Energy Jobs Act, also allows offshore natural gas drilling and creates an offshore energy compact with neighboring Virginia and South Carolina (see Shale Daily, April 28).

Mark Johnson, spokesman for Perdue, told NGI's Shale Daily on Monday that the governor's office wouldn't comment on legislation that had not yet been passed by the General Assembly.

If permitted to do so, drillers would use hydrofracking at wells in the Cumnock Formation, an 800-foot interval of organic-rich black shale under 25,000 acres in Lee and Chatham counties -- located in the central part of the state -- at depths of less than 3,000 feet. Researchers from the North Carolina Geological Survey and the U.S. Geological Survey are currently studying how much shale gas may be recoverable from the Cumnock (see Daily GPI, Aug. 27, 2010).

Gillespie cautioned that it could be four years before hydrofracking is legal in North Carolina. He said the General Assembly could begin work on a regulatory bill in 2013 but it would take up to two years to complete. Additional legislation would also be needed, he said.

"I would say 2015 is absolutely the earliest [hydrofracking] would be allowed," Gillespie said.

If enacted, North Carolina would join other entities currently studying hydrofracking, including the U.S. Environmental Protection Agency (EPA), New York, Maryland and Quebec (see Shale Daily, June 7; June 1; March 10; Feb. 22).

"A lot of people ask me why we are doing this," Gillespie said. "I tell them we have to. There are already 10,000 acres leased in the Triassic Basin, and with the way lobbying works there will soon be people pushing the legislature to go ahead and start allowing drilling before we're actually ready to. We're trying to have a very thoughtful process in order to have regulations in place so that when we do get to that point we'll have very little, if any, environmental damage.

"Whether North Carolina moves forward or not will depend on if we can do it safely. I believe we can have rules in place that will cut way down on the possibility of any environmental contamination problems."

Hope Taylor, executive director of Clean Water for North Carolina (CWFNC), blasted S709 as "dangerous in every aspect and said the hydrofracking study outlined in H242 was significantly more comprehensive.

"We felt like we had some impact in improving H242, including studying the potential adverse impacts to communities, the economy, air quality and infrastructure," Taylor told NGI's Shale Daily on Monday. "We think that would have been a better study. But we are concerned about the timeline of both bills, particularly the requirement that the report include recommendations for regulatory changes. The EPA won't even have its preliminary results for the fracking and drinking water study until the end of 2012."

Taylor said the CWFNC was "doing some advocacy to try and get some last-minute amendments to S709 on the House floor [Monday night], but we don't know if that will happen."

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