Shale Daily / NGI All News Access

North Carolina Frack Bill Passes, Bound for Governor

A bill to legalize and begin regulating hydraulic fracturing (fracking) passed the North Carolina House of Representatives on Thursday. It will return briefly to the state Senate before being sent to Gov. Bev Perdue for her signature.

SB 820, also known as the Clean Energy and Economic Security Act, passed its second and third reading along mostly party lines in the Republican-controlled chamber, 66-43. Two Democrats ultimately decided to join 64 Republicans in support of the bill, while two Republicans joined 41 of their Democratic counterparts in opposition.

Four amendments sought by Rep. Mitch Gillespie (R-McDowell) were approved, but seven subsequent amendments collectively proposed by Reps. Pricey Harrison (D-Guilford), Elmer Floyd (D-Cumberland), Kelly Alexander (D-Mecklenburg) and Bill Faison (D-Caswell) were defeated.

"It's an excellent bill," North Carolina Petroleum Council Executive Director William Weatherspoon told NGI's Shale Daily on Friday. "We're virgin territory when it comes to oil and gas exploration and production. This seems to be a sensible way for a new state to go about it."

SB 820 calls for creating a nine-member oil and gas board and would establish a moratorium on fracking until mid-2014 (see Shale Daily, June 7; May 18). The bill was submitted in mid-May by state Sens. Bob Rucho (R-Mecklenburg), Harris Blake (R-Pinehurst) and Michael Walters (D-Proctorville).

"The legislature said they would authorize and legalize the technology, but then take a pause to write a modern day oil and gas regulatory program," Weatherspoon said. "They reserved the right to take a second bite at the apple in two years, more or less. And then if everything that needs to be in place on day one seems to be ready, they would have a vote to either kill it or start authorizing permits."

Weatherspoon said the bill must return to the Senate for agreement on changes made by the House. SB 820 passed the Senate on June 6 by a 29-19 vote (see Shale Daily, June 11).

"It's my understanding that [Senate approval] will happen quickly -- probably Monday or Tuesday -- and then the bill will be off to the governor's office," Weatherspoon said. "Then we will see where she is on all of this. There's a lot of speculation in the press about her early position, when she said [fracking] could be done safely if there were protective measures in place on day one. This bill is attentive to that proposition.

"I think the general expectation is that this will wind up on the governor's desk very early in the week, and she is then expected to sign it. There will be a big push for her to consider a veto. She has enjoyed support from environmental groups for a long time in her career, and I'm sure that they're going to lean on her to consider a veto."

Elizabeth Ouzts, director of Environment North Carolina, agreed that all eyes will now be on the Democratic governor.

"We're disappointed that a majority of House lawmakers approved the rush to frack, but we applaud all those who stood up for our waters, our air and our rural landscapes today," Ouzts said Thursday. "Last month [the governor] called for a careful and responsible approach to fracking. This bill represents the opposite track: rushing the state into this dangerous new method of drilling and asking the questions later."

Last month Perdue issued an executive order calling on various state agencies to organize a work group to study fracking and make regulatory recommendations (see Shale Daily, May 23). Perdue's order followed separate reports by the state Department of Environment and Natural Resources and the State Review of Oil and Natural Gas Environmental Regulations Inc. (see Shale Daily, March 26; March 2). Respectively, those reports indicated that fracking could be done safely but that current state regulations were inadequate.

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